Sandbox

[Bern 10]

The landscape before RTH open:

[Niko 10]

After finding buyers in Friday afternoon at the apex of the daily hinge they ran out of steam at 90 on sunday and fell below the 50% of the downmove from 624. (82). In the morning sellers also decided the 50% of the upswing from 43 was cheap enough and just an hour ago buyers also gave up on the 50% of the last downwave.

 

Is like a 50% fair.

 

So far they don't like it above 78 nor below 65, but we seem to be breaking out of a small TR between 75 and 78 with an MP at 76.5.

[SIUYA 11]

Yes.. for sure progress as opposed to perfection is a great frame of mind. But it should be simple enough to go over last week at least to see how often price goes against me by more than 2 or 3 points and yet continues in the intended direction, and how often scratching early is in fact best, and then of course re-entering. It will just come down to good old backtesting. Great that you had such a good weekend, I was busy as well so couldn't get my homework done, but I'm sure that if I knew by way of enough statistics where the sweet spot of either getting out early and re-entering vs. holding on longer is, then I would feel more comfortable going forward.

 

As it is now, getting in early it just best from many perspectives, so I am focusing on that, even if it means I have to enter in a range perhaps, before a break out of that range.

 

(Sorry if this clutters up the Ghost thread Db... feel free to move it to the off-topic thread if necessary)

 

what you suggest is a good idea - however - all I mean to say is the risks of doing this in terms of getting a number that is a best fit from some back testing as a stop is searching for perfection.

I dont think this is too much clutter in the thread as it does get to the core of some systems such as the SLA that are discretionary but with rules. Its not about a fixed number, its dynamic. These systems require zen focus and not automation. (Mods feel free to move this if you feel this is better suited elsewhere, but this is all I mean to say.)

 

eg; what if one week you see the best fit number is 4 tics, the next week its 5 or 6 because volatility has expanded?

What happens if you set it at 4 tics and have 3 losses in scenario A, whereas if you set it at 5 tics you had 0 losses in scenario B, - In scenario A how will you feel on the 4th trade - will you take it, will you let it run or be happy to get out at BE?

In scenario B - after watching it wing around a few times and nearly stop you out, will you run it thinking you were lucky not to be stopped and hence better take some profit while you can, in case you actually get stopped out next time?

Often setting a fixed level - or 'expected norm' / the sweet spot causes more problems than not.....just understand the trades offs that go with it.

 

However - dont let me dissuade you from doing what works for you, just understand there are more issues when backtesting v reality of application v reviewing occurs. Which i think DBP is saying - there is more to simply having 1D reviewing postmortem.

[k p 10]

Often setting a fixed level - or 'expected norm' / the sweet spot causes more problems than not.....just understand the trades offs that go with it.

 

This is the million dollar question. You never know if you will get the week where 4 ticks works, or the week where you need at least 6 ticks, so a more universal number is I think necessary, and then of course evaluating the context at the moment to tell you if you should hold on a bit more or get out right away. With loads of screen time, I think seeing how much the right tick moves up and down, the pace, the jittery action, the extent of the quick move up or down, that is all you need to develop a feel for either patience or a quick exit. This is of course lost on the one minute chart when you look at it post.

 

But for me, what is most important, is that first best entry which makes all of this unnecessary. I know we can't predict when price is just about to take off, but I see it all over the chart, where an entry is just right, barely moves against you by a tick, and within 30 seconds you are already in the clear. Then you have the option of scratching at BE because if price does ever come back to your entry you know the move is weak, and that is your only worry.

 

I tend to think Db is this good after so many years of practice. Because his scratches are in the order of ticks and not points, he can fish out these amazing entries within the one minute bars so thinking about universal 6 tick stop loss or 8 ticks is never his concern.

[Niko 10]

Ok, so far so good, I managed to sit on my hands, and trade as required, I also spotted levels where I could have traded but did not.

 

1. After the open Buyers tried to break above 78 but were rapidly rejected, then sellers tried down but were also rejected around the MP at 71. The blue dot marks the place to take a REV, this is just for future reference.

 

2. Buyers proved they wanted it, but they rapidly gave up.

 

3. I marked this level because in RT I noticed how prices not only stalled at that level, but there was a very fast rejection to the downside.

 

4. As the uptrend faded and a LH was the RET after the break of DL a short was in place, but given that my rules call for patience and to wait for a break of LSL I held and only took the RET after that break. It was SCR after sellers failed to go below 88.

 

5. After trying higher and failing and pushing lower with strength I decided to take my chances around 50%, but that proved to be a mistake. We had a LH and a HL above 50% therefore a hinge. In hindsight looks like the way to go was to SAR this one, but in RT It just seemed like jumping inside a hinge apex, so...

 

6. The SL was broken, and a new RET formed then a long was called for, but at (7) 600 we had a climactic high and prices fell rapidly to take the LSL triggering my exit, It is very unfortunate that I sold 1 tick from the low, but I followed my rules and that is far more important for me.

 

Given the dull action of the market so far I decided to call it a day and watch.

 

At the time of the post I thing they will reach 612, so I will get back in a couple of hours (gotta leave now) to do replay of the session and write again how could I improve my trading today.

 

Edit: I added a 20 tick chart that I currently keep in my private records, but I am gonna start posting now for my future reference. It is huge, so please don't get mad at me.

Edited May 19, 2014 by Niko

[DbPhoenix 42]

what you suggest is a good idea - however - all I mean to say is the risks of doing this in terms of getting a number that is a best fit from some back testing as a stop is searching for perfection.

 

I dont think this is too much clutter in the thread as it does get to the core of some systems such as the SLA that are discretionary but with rules. Its not about a fixed number, its dynamic. These systems require zen focus and not automation. (Mods feel free to move this if you feel this is better suited elsewhere, but this is all I mean to say.)

 

I'm the moderator and I think it's just fine where it is.

 

There is much that I don't say because it will have little effect. For one thing, this business of backtesting MAEs and stops. The trader has to find these things out for himself, like learning not to touch a hot stove.

 

While one may detect what appears to be a pattern in the extent of MAEs, it is more likely going to be bunnies. And even if it isn't, so what? Each situation is unique, and if one doesn't follow the drill, he will end up making trade after trade after trade, each one being stopped out just at or past that level that he has determined via backtesting to be the MAE. The backtesting has to be done, but not to determine the MAE. The backtesting has to be done in order to convince the trader that the backtesting is a waste of time and effort (although one could argue, as I do, that learning that it's a waste of time and effort makes the time and effort worth taking and doing).

 

Each AE has to be evaluated in real time according to the context and to what traders are doing in the moment. Otherwise, all these efforts to determine the MAE are essentially little more than striving to insulate oneself against fear, or at least to avoid having to make RT decisions.

[Niko 10]

if you are to enter at the first retracement after the DL is broken, why not enter at the arrowed bar?

 

I did not enter because I am not touching the market before the open and specially around the open.

 

If you do, what is your response when price immediately moves against you?

 

In this case, had I taken that trade given how far it went against the "trade" I would have scratched the trade.

 

If you exit, how likely is it that you will see the rejection of 70 and re-enter?

 

If it had happened I don't think I would have taken the next entry given the HH that ended up being the rejection of 70. But this is not the first time I have seen this occurring so something to consider for future trades.

 

If you don't re-enter for whatever reason, what will be your emotional response if the trade moves on without you?

 

Given that I would "classify" the REJ at 70 as a REV I don't think I would have beat myself too hard about not taking it.

 

If you don't enter before the bell, will you notice the rejection at 70 and enter below that? If not, why not?

 

Same as above.

 

What will be your response if you short there and the trade moves against you? How far will you allow it to move if it does so?

 

Last week one of the lessons I learned is that I was giving price too little room, most of my good entries ended up being bad trades because of the way I was scratching, what I am going to do this week is to give price more breathing room (no more than 2 points anyway) in order to observe PA in calm.

 

As for the SL, it might be more acute than you have drawn in hindsight (the dotted line).

 

The SL that I drew was the one I had drawn in RT, with the first "visible" RET in the 1 min, from where I fanned it in, but I did not act on the accelerated fanned line

 

Either way, are you going to notice the hinge?

 

I did notice the hinge, but It was too late I was already in the trade and on my way to be SCR.

 

Are you going to exit? Are you going to wait? For what? Are you going to notice the rejection of 57?

 

As I said, I SCR, but I did not pay much attention to 57 at the time to be honest.

 

What will you make of it? Will you view that as a Dog and enter a new short (if you exited)?

As I said, I did not pay attention to it, and that was a mistake, as it was the negation of the long, perhaps I am still waiting like a deer in the headlights, and instead of acting fast and closing the trades on the failure to do what they are expected (in this case, break through 57) I just wait for price to go against me.

 

What will you make of the subsequent rejection of 51? Will you be prepared to exit your short, if taken, and enter a long at 53?

 

No way, I am not ready for that yet.

 

Are you going to wait that long before drawing a DL?

 

I did not draw a DL until I got a HH above 58.

 

If you take the long, are you going to allow price to fall all the way from 61 to 53?

 

No, I would only allow price to go against me 2 points.

 

Is there something not plotted, such as the 50% level?

 

At the time I knew I was at 50% and decided to act with the intention of SCR fast, but it moved faster than I expected it and I ended up with a full 2 point loss. Regarding things to do I will avoid trading 50%s after a trend Reverses, have not shown to be good places to enter.

 

When you see price reject 53, do you have a rationale for re-entering a long?

 

This has happened before, the failure to break the stride of the trend and a new "deep" RET above LSL, I am not really very comfortable around these entries but given that sellers were not interested even at LSL or below it buyers are still in control so a long is the way to go.

 

If you take it, do you see any particular reason why price might not be able to get past 67? If so, are you going to exit there or wait for a break of the DL or look for something else? What are your criteria for action?

 

I did not pay attention to 67 at the time, but it was the LSL before the open and the first swing high after it, it was the place where sellers decided it was too expensive after the open, so it seems to be important.

 

Looking at it from a DL/SL perspective, would you not draw a DL beginning with 51 as shown?

No

 

If not, why not?

 

Well, there was no HH, therefore no trend just yet, we had congestion and trend as alternatives, and it ended up being congestion.

 

Would you exit at a break? What constitutes a "break"?

 

I am exiting after the break but not at the break, I an giving price more room, at least to form a HL, LH, DT, DB or to break a LSL, LSH (the latter only occurs before the first on VREVs that are not that common according to my experience). I am trying to stay on the trades, but perhaps there is something important I am missing.

 

There is no subsequent retracement for a short, but then there's no subsequent retracement for a long after the SL is broken. Is the rejection of 53 enough to take the long, particularly since price bounces off the DL you've by then drawn?

 

Yes, I noted that in Hindsight, but in RT I had just hit my daily loss limit with my last SCR and was already out of the game for the day.

 

If not, are you satisfied to allow price to rise until it runs out of steam?

 

If I miss an entry, and I realize that about 10 seconds after I miss it, I try to avoid feeling bad for missing out, sometimes it works sometimes it doesn't, anyway I look for a new opportunity above the range that has been forming, if that doesn't occur then I think no more trading is the way to go.

 

What will you look for to determine whether or not and where that is occurring (see previous paragraph)?

As I said before I did not pay attention to 67 at the moment, I think that is something I will include in my RT checklist from now on as it is definitely important.

 

And so on . . .

 

If one has developed a robust structure, it doesn't matter what the market does; the trader is confident that he will be able to deal with it. The focus is meeting the challenge. There's no time or space for fear. On the other hand, if the trader has not developed a robust structure, he will be kicked around like a soccer ball and play an interminable game of catch-up.

 

Yes, my structure is by no means robust, but I am working on it, I think I have to make more questions to myself in RT in order to join the dots and see the whole picture.

 

The market will tell you what it's going to do by what it's doing. There is no "just kidding". You may not be able to understand what message the market is sending, but, in that case, you simply stand aside until the message becomes clear. This has nothing to do with fear. It is rather a matter of waiting for clarity. If that clarity never comes, then doing nothing but observing for the rest of the session may be in order

 

Yes, this is very valuable advice, I tried it today as I just lost grasp of clarity of understanding. So I just avoided new trades.

Edited May 19, 2014 by Niko

[k p 10]

(although one could argue, as I do, that learning that it's a waste of time and effort makes the time and effort worth taking and doing).

 

This stands out for me as very wise words indeed. When you learn something for yourself, when you prove it to yourself, what is gained from this is just that much more valuable.

Edited May 19, 2014 by k p

[Wolfhound 10]

Monday 19th May 2014 NQ100 1 min chart review

 

This week I will try to improve the review to include what I am doing right and wrong in each trade, and where I can improve for the next days.

 

Today we had a move from 570 up to 600 in the morning, but I could not capture much of it. Reasonably happy with my trading today. Scratches saved me from mistakes and trades that didn't work out.

 

 

1. Just before the open we had a rejection of our morning highs at 78. I would not normally enter a trade just before the open, but it is possible to short of the rejection. I would be wary of a sudden fast move on the open moving way beyond any stop loss that I would set. But these valid trades before the open are something that I should watch for in future, even if I don't take them.

 

2. We had a retracement for a long here. I put a long on even though we were approaching the overnight highs above 590, and could have a quick failure. As always support and resistance is only there when it happens, and not because we draw a line on the chart.

 

3. The demand line from the lows was very steep and tight. I realised then that I was undecided in where to exit. It seemed to hasty to exit directly on such a steep break, because I have been trying to avoid exiting too quickly since last week. I waited until we had a lower high along with the line break, which really is the place to go short, but I was thinking about my exit first of all. Exit descisions need to be made in advance.

 

4. There was no big drop, instead price started making a tight range for a number of minutes below the overnight highs, before attempting to break above the overnight highs again, and failing.

 

5. After we broke below the congestion we had a retracement for a short which is stopped out quickly. Better to be stopped out quickly than stopped out for a large amount. Should I take that trade, when we are moving back to the mean of the opening range? Maybe not.

 

6. Supply line break with retracement that held above the overnight highs. Entered long here. The 600 mark proves difficult to get past again. I left my stop just below the supply line from the open, and it eventually triggered at 96.

 

7. We got a retracement after the demand line break, but traders put the price into a very tight 2 point range for 8 minutes, so I would not go short from a break down of this until we have another retracement.

 

8. Entered a long at 604, which was stopped out in a few minutes. I think this trade was an error even if it had worked. The retracement was a right tick one, which I have not used much. When I stand back from it, it looks like an attempt to get a trade on when none is available. I need to remove these, even on the occasions that they workout by accident.

 

Re 7 & 8. You'll note that price did not fall in spite of the ret after the DL brk. This is a Dog. Therefore, you could have gone long at 98.5 off that little ret just below your "7".

Thanks Db. I really have to spot these Dogs quicker. Another thing for my improvement list. ( Dave )

 

9. We have held above 600 for more than 15 minutes. This looks like potential strength for a move upwards.

 

10. Long at 605.25 on the retracement from the breakout of our congestion. Not expecting anything of this trade, given that we are now after 11am. This one moved up straight away. As always we can never tell which trade is going to work, just have to take them as they appear.

Edited May 20, 2014 by Wolfhound

[Bern 10]

These were the trades today:

[eminiman414 10]

Another day of thinking too much vs. just acting.

 

Start it out with a rapid rejection of 70 and nothing do about that as it wasn't what I had planned. Next, (green box) did not take long given I was looking for 90 to break first before I entered a trade. Given how quickly we moved up and what I have experienced in the past I can't lie, I was thinking about a reversal at 90 given the sharpness of the move as opposed to just watching what was really going on.

 

First trade entered was a short that I scratched quickly. Price just didn't seem to want to move at that moment and given how strong we moved up I did not think price would move very far so I exited. Could have been +1 on that so not too big of a deal. Noticed what could be a dog? Did not enter given we were trading above 90 and the first short did not amount to much also I find dogs going with the trend to be more effective thus far. We move relatively quickly from where that dog (if it even was a dog) could have been entered. Price stops right at the minor swing in the up move and goes no further and stops above 50%. Another doglike move? This time a short was entered and again as I do this in my mind I'm saying why this one and not the previous short? I take it anyway "just in case." The trade gets stopped out leaving me wondering whether this type of action warrants a SAR?

 

Next trade is a long trade which I am ok with. The exit was ok, price seemed to hesitate at the swing high and although the exit was early price did not go much after my exit before the would be exit.

 

I am finding it very interesting that what's in me says to act and I do not and then what's in me says not to act and I act. I really wonder why that is. Is it fear? If it is fear why do I act when I know I shouldn't? Or is that a separate fear of it's own? Fear to be wrong or lose so no action, then fear of missing out so act when you shouldn't. It's actually not even a matter of not acting but if I would act correctly first those next actions don't even exist.

 

Not taking the first long was silly but in my mind I was saying can we really maintain this move? If I took it and the move could not be maintained even less than what it was so be it just exit.

 

Things to improve on. Just act. Stop being a baby and just do it because more times than not given what I am seeing it's not an incorrect action. The trade may not go far or even be a winner but it is not incorrect according to the plan. How I do act or have been acting lately is more incorrect according to the plan. I have been trying to get into the first entry into the waves and avoiding the subsequent ones since I should already be in the wave. My first short I do not mind the second based on my experiences thus far is unacceptable. My hesitation on what should have been the first long was because we rejected 70 and to me that was the first entry into this new up wave and the hesitation btw 88 and 84 was the second best place to enter/the parabolic rise that has gotten me many times before.

 

After the first short was scratched to me a dog entry is a beginning of a new wave within a given move (just my terminology) so that would be the first entry and the second short I did take would be the second entry which again as I have said in previous posts me and second entries just haven't worked out overall, some yes, most no. This leads me to after the second short and whether that is a DTDB. Since we got to the last minor swing in the up move and did further and was above 50% could the fact that on the second trip back towards 50% we don't go anywhere could that be taken long? Is that the first entry into the next up wave? The fact that we shot sorta straight down for 2 mins and just didn't go very far is that doglike action? Then we have the hesitation. Now what's more important the fact that 50%ish held or that we are currently moving down and getting another retracement. Is a short like that really warranted is we fire off into 50% with no follow through? Even more so this is the third time price has retraced and we only made it halfway back down from the original up move. What does that tell you?

 

All of this kind of stuff is going on in my head all at once which I guess is why I act the ways I do sometimes. Moving forward the plan must be followed and I think I need to i'll say be a little more lenient with the context. Just because you have an area of interest does not mean anything interesting is going to happen there. Price clearly was going up then you clearly had a hesitation. That's what happened and when that happens what do you do? What should be done according to the plan? With all these silly things I am still on the positive side of the coin. Main thing is just working on the initial action.

[DbPhoenix 42]

Context is important. The market isn't after all going to sit at its opening price all day. However, when it comes to the opening itself, the macro context isn't as important as what traders are doing just before.

 

Here, the macro (left) matters in more ways than one. However, if one is looking for clues as to how to trade at the open, an extremely tight range that lasts for 90m (right) is a big one.

 

The trades are suggestions.

[Niko 10]

Context is important. The market isn't after all going to sit at its opening price all day. However, when it comes to the opening itself, the macro context isn't as important as what traders are doing just before.

 

Here, the macro (left) matters in more ways than one. However, if one is looking for clues as to how to trade at the open, an extremely tight range that lasts for 90m (right) is a big one.

 

The trades are suggestions.

 

Thanks, I am puzzled by long no 2.

 

The first three longs are all options, the first being the best. They represent a reversal, a breakout, and a retracement, in that order. One could also scale-in in this manner.

 

Thanks

Edited May 19, 2014 by Niko

[k p 10]

 

The first three longs are all options, the first being the best. They represent a reversal, a breakout, and a retracement, in that order. One could also scale-in in this manner.

 

The first two, the reversal and breakout occur without a defined retracement in the one minute chart. So is the rationale, for a reversal trade, simply that a price level is strongly rejected and then a buy stop is placed one point above the rejection bar, sufficient enough? Similarly, with the BO here, because the context of a tight trading range is so strong, is it sufficient to place a buy stop one point above the top of the range? Or are you also looking for a tiny retracement in the right tick once the BO occurs?

 

Reversals, breakouts and retracements are separate strategies.

Edited May 19, 2014 by DbPhoenix

[Niko 10]

Ok, I replayed the day, and this is what I found:

 

1. In days like today not taking the REV makes all the difference, so I need to become competent in REVs, I will go into researching opening range REVs, when I have tried them in the past I might have been very demanding on cascading losing good opportunities and worst losing the records and therefore the knowledge. As I was performing an exercise on REVs that got no replies, I will turn into this REV research during this week.

 

2.Is the same entry I took in RT, no difference.

 

3. Here is a question, I am supposed to look for reasons to stay, according to my AMT analysis I was in a up TC the top of which was 10-12, that is why I avoided the short and awaited for a break of LSL before entering. What am I missing, I see that db pointed that short in his chart, so I am not sure when I need to sit on my hands and when I need to take the SLA entry.

 

We were entering a very busy area at 85 from the 14th/15th (see the hourly chart). If price had moved sideways, I would have left it alone. But it instead made a swing high, and that continuation effort failed. Since the swing high also enabled me to draw a supply line, I shorted below that bar. As it turned out, price moved sideways anyway only at a level several points lower. But then it continued and the short was a wash anyway.

 

Generally speaking, I favor getting out when the line is broken and price reverses. If it goes sideways, I stay in unless and until it drops out of the range it's creating. But getting out doesn't mean staying out. There are, for example, Dogs to be aware of.

 

It's almost a mantra: DL breaks, look for the first retracement op for a short; SL breaks, look for the first retracement op for a long. If no such ops present themselves, trade the Dog. If that doesn't present itself either, then see how the sideways movement resolves itself, whether a range or a hinge and trade accordingly.

 

Here I changed the exit, I just closed the trade as it failed to make a new LL below 88.

 

4. We were discussing a Dog in last Friday chart in the "if you ...." thread, is this not the same case that occurred there, the SL was broken but LSH held and price fell rapidly.

 

5. In RT I avoided this one as I saw it as inside a hinge (LH + HL), I still don't think I would have taken this one in RT.

 

6. This one I took, but I think I screwed up at the exit, and given that I was a BE for the day I just decided to stop pushing it as I saw it as dull. But a reentry and patience would have saved the day.

 

7. Reentry and patience is what this entry is all about, the market didn't go against my trade even 2 points and even if scratched the next RET (8) provided a "clean" entry.

 

Lessons learned, not all days are runaway days where you can get your way before 10:30, some days require more patience but still provide good trades. It was a day of HLs and HHs and except for the giant RET around 10 (the one that was stopped at 50%) it was a very good trend day.

 

I have to ditch the "deer in the headlight" mentality and start thinking about scratching out of inability to go higher or lower, not only because it went against my trade and hit my "exit".

 

I need to learn to exit with the exit button, I guess exit A (red diamond) would have been different if I did not have a stop order parked in there.

Edited May 19, 2014 by DbPhoenix

[Niko 10]

We were entering a very busy area at 85 from the 14th/15th (see the hourly chart). If price had moved sideways, I would have left it alone. But it instead made a swing high, and that continuation effort failed. Since the swing high also enabled me to draw a supply line, I shorted below that bar. As it turned out, price moved sideways anyway only at a level several points lower. But then it continued and the short was a wash anyway.

 

Generally speaking, I favor getting out when the line is broken and price reverses. If it goes sideways, I stay in unless and until it drops out of the range it's creating. But getting out doesn't mean staying out. There are, for example, Dogs to be aware of.

 

It's almost a mantra: DL breaks, look for the first retracement op for a short; SL breaks, look for the first retracement op for a long. If no such ops present themselves, trade the Dog. If that doesn't present itself either, then see how the sideways movement resolves itself, whether a range or a hinge and trade accordingly.

 

Thanks

[Niko 10]

Prepwork for today 052014

 

Looking at the larger picture we seem to be actually in the RET that comes with the test of the hinge apex (textbook stuff ) but in order for this to become a trend we need to break decisively above 24 or else we could end up in a TR in the daily.

 

Zooming in to the hourly I see a TC in the making but not confirmed (it could just be bunnies) but the interesting part is that the UL of this TC pointed towards the congestion area of last week between 03-24 with a mean around 13 and that is where we are now.

 

If we can exit the influence of 13 and break above 24, 57 and 700 seem important.

 

If in the other hand they decide that this is way too expensive and start selling below 07, we will have to deal with 600, 580, and 65, and don't forget the 50%s.

 

Now, focusing on the now, after yesterday morning traders have been feeling comfortable settling around 14, so far they have not been able to take prices below 07 and during the early morning buyers seem to have decided that 18 was too expensive turning this movement into a LH in the hourly

[eminiman414 10]

Waiting for price to exit the area btw 21 and 07. I will watch to see how/if price breaks out and trade the SLA according. SLA tactics are break/RETs or dogs nothing else/nothing "fancy." If we move out of the range up or down and the first entry taken is unsuccessful at what price did we turn? How far out did we travel? Does a dog show up or do we get a new signal in the other direction? If the next signal is taken we will be trading back toward the range so keep an eye on 21, 12-14, and 07 and watch the reactions or lack thereof at those prices. If we do not travel "too far" out and it is not decisive wait to see if we exit the opposite end first before making another decision.

[Wolfhound 10]

Tuesday 20th May 2014 NQ100 1 min chart review

 

Long term we are well above the big daily hinge midpoint, and are close to testing recent swing highs.

 

Price rose yesterday, but couldn't quite break the previous highs at 624. We did make it to 621 overnight, but we could not hold that level for more than a than 20 minutes or so. Since then we have tested the low mark of 607, which has held as a low since yesterday afternoon.

 

A breakout below 607 may see a large fall, because we have held above that level for many hours which will be noted by traders.

A break above the overnight highs may test the recent swing high of 624. If we pass this we have a good distance to travel to the next big highs.

[Niko 10]

Well, a new week and new goals, the goal of this week is simple, let go of my trades and focus on price action, forget about your P&L even if you cant see it doesn't mean you cant do the math in your head, so just don't.

 

Instead focus all your attention to read price action, to determine what traders are doing and thinking and trade accordingly, if you have problem with focus just draw a damn line and follow it, but don't get tangled on the line, but instead use it as a mean of focusing your attention to what is happening above or below the line.

 

Remember that detecting chop is not that hard, they are either gonna try up or down at the start, once they fail in one direction they are gonna try the other, if they fail in that as well you have an opening range, and an opening range is a RANGE so remember you don't trade inside ranges, you are not ready for that and the last two weeks proved that, so just don't.

 

Once they define where they want to go, join them and remember that some of them will make a couple of points and quit triggering a RET, that is not the moment to panic, but the moment to hold your guns, that is the market telling you if they want the movement or not so wait for the RET to resolve before acting, that will put you in a position to deal with any nonsense that you end up making if you do it, but if you can avoid doing stupidities, just do.

 

I just re-read my weekly objectives so I dont lose track of them, today my focus on PA will increase, I will try to keep my cool all the way to 11:00, just breathe and exhale .

 

Other thing I will avoid today is to trail the stop, it will remain wherever I place it and I will exit the trade with the close button, so as to retain control of the trade at all time.

[Niko 10]

Seems like we got a crappy day with mean around 7.

[Wolfhound 10]

Yes, no fun today. Just watching price revolve around the mean

[Niko 10]

Well, is 10:52 and I don't think anything of importance is gonna happen during the next 8 minutes so I will call it a day.

 

My great call of the day was staying out, had I taken any trade it would have been scratched. The whole morning turned into a hinge that by the time of this post hasn't been broken. Perhaps the break will occur in the afternoon, but I wont be available by then, so good luck afternoon shift traders.

 

I am attaching what I drew during the morning.

Edited May 20, 2014 by Niko

[eminiman414 10]

For anyone following along or would like to shed some insight on this...I have a few questions regarding the supply/demand dynamic.

 

With regards to today. The first 30 minutes would it be fair to say that there was a decent amount of interest by buyers at these prices given the nature of the overlapping bars and how the buying waves cut pretty deep into the selling waves? In my head that is what I was thinking but also saying that overall supply is greater than the demand due to the lower highs and lower lows.

 

Also is the inability for traders to find a trade what creates the pressure. As in if a seller can't find a buyer at a higher price the pressure is for him to lower his price? I feel like I grasp that dynamic in the creation of a swing high but at a swing low it changes for me. At a swing high it's a seller unable to find a buyer but at a swing low is it a buyer unable to find a seller or is it that enough buyers stepped in to halt the selling? Thinking about it on one side of the coin as either just demand/lack of or just on the selling side it makes more sense to me. Seller can't find a buyer (lack of demand) price is lowered now buyers come in (demand) price rises. Flipping that on its head gets slightly confusing to me.

 

Another example is a downtrend. It's not necessarily a seller unable to find a buyer is it so they continue lowering their price? That way it makes it seem wording it that way is those that are selling are the ones losing out so to speak or taking less but in a downtrend money is made by selling. Or are short sellers in control (which they are) then what is the dynamic in that regard?

 

Trying to think more in terms of traders but for me to do that I need to have a better handle on the actual dynamic/mindset of the traders. Today thinking more in terms of supply/demand, buyers/sellers, buying pressure/selling pressure kept me out of a day that would not have been all that successful so I would like to get deeper into that mindset. Any comments are welcomed.

[eminiman414 10]

No trades today. Considered two shorts and one long however given the behavior I did not want to take the risk.

 

Most of my thoughts are posted above as well.

 

First considered trade (short). Price broke below 07 a second time and made a LL. Price traveled back above 07 however it was quickly rejected. Given the structure of the waves at that moment in time, if that behavior continued that trade would not have gone very far so I passed.

 

Second considered trade (short). Here I was also seeing if a long op presented itself. There was a change in behavior. We had a DB then the supply line broke. A long was thought about however we got back to 07 with no RET (sort of doglike action) and then 07 was rejected so I considered short. Again given the nature of the behavior I passed. The fact that we had a DB or tested the area btw 00-98 a few times with no follow through and we broke a swing high contained within the SL caused me to pass on it.

 

Third considered trade (long). Following along from the 2nd considered trade I don't know if this is considered a DB but we tested a point below the 50% area of the up wave twice with no follow through and as explained with the 2nd considered trade we had no FT at 00-98, SL broke, minor swing broke etc. This long would have put us back into the range which I did have in my written plan prior but again given the nature of the day as whole at this point it just didn't seem worth it. Where would be go, to the mean of the ON range? The opening high? The other side of the range? Taking an entry at 06 would mean 6-9 points if we get to the mean of the ON range or to the opening high. Is that worth it given how the waves were forming? If we happened to get to 18-21 wouldn't have been so bad but again how likely was that at that moment in time? As I say this we are up to 17 now but look at all the action before that point.