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[Niko 10]

Niko,

 

To discuss your question in regards to fear:

 

Here's the way I see yesterday's action (granted I was trading the ES, so keep that in mind). The market was digesting a strong down move from the prior sessions. Via SLA of the 60min chart, the bias had shifted (at least momentarily) to the bulls side [sL was broken and RET triggered after rejection of the mean of the daily chart upward trend channel). In fact, a hinge formed right at a prior swing point in the prior session's down move [which broke out to the upside].

 

So here's the start of the morning session. What do we know?

 

Anyone with half a brain probably thinks there will be follow through after that strong sell off. BUT! The bias is currently bullish. The chart tells me so. [hypothetically] I'm a fearful trader and refuse to follow SLA. Even though the market is moving up I'm staying out of the long trade because I'm worried the market will fall and screw me [it's a trap!]. After all, that's what always happens. So instead, I look for a place to get short. Unfortunately, there is no clearly defined, major resistance level until higher up near the initial breakdown, so for the entire session, I have to sit and wait for a sign from the market gods to enter a short. And guess what, because there is nothing obvious to make me enter a short, I never do. For the entire session.

 

Now think of me as a composite operator for the market. How would the market behave?

 

It would float up, arguably very one-sidedly, AGAINST the directional bias of the market on low activity / low volume. You should also expect little to no downward overlap throughout the upmove since I [the composite operator] am unimpressed by your price rise and refuse to begin shorting, no matter how high your bull wave thrusts. At the open, there was some decent resistance, and so the only opportunity to short presented itself there. After the violation of that resistance, it was clear sailing up to a better shorting opportunity.

 

That, to me, is the market's manifestation of fear in the form of timing - no one wants to be too early or too late. That market has already shown its hand with the strong selling spike, but now everyone that isn't already short is trying to jump in at the best possible price. Since the market opens well below any logical place for a good short, price just relentlessly rises.

 

I am not sure I understand how fear fits into what you are presenting here. Who is afraid of what? Perhaps I am just too much of a newbie to understand what you are presenting.

[DbPhoenix 42]

 

There were some moments where bulls manned up and kept prices from falling further, but as soon as they realized there were no followers they started to exit again. Was that fear?

 

Or just an acute business sense.

[Niko 10]

Or just an acute business sense.

 

Well, that is a good way to put it.

[DbPhoenix 42]

Well, that is a good way to put it.

 

Meaning that if one can't find a buyer for what one has, he either lowers his price or looks for another buyer. Fear is not an issue unless he just bought the goods himself and is now having trouble unloading them. If he put everything he had into them, then, yes, there might be some fear entering into it, particularly if he has a big payment on his cart coming up. But, otherwise, it's just business. Discount the winter coats in the spring, discount the tanktops in the fall.

[DbPhoenix 42]

From the mean to the LL back to the mean all in one day. 100pts each way. When's the last time you saw that?

[Fluke 10]

What I'm looking at...

[DbPhoenix 42]

What I'm looking at...

 

You may also want to look at the NDX 10.

[Fluke 10]

You may also want to look at the NDX 10.

 

Do you have a data feed that provides that? Is there a free, interactive chart similar to Investing.com?

[DbPhoenix 42]

Do you have a data feed that provides that? Is there a free, interactive chart similar to Investing.com?

 

I use StockCharts, but anybody will do: AAPL, MSFT, GOOGL, AMZN, QCOM, INTC, FB, CMCSA, CSCO, GILD

[Fluke 10]

I use StockCharts, but anybody will do: AAPL, MSFT, GOOGL, AMZN, QCOM, INTC, FB, CMCSA, CSCO, GILD

 

Thanks DB. Do you mind if I ask how often you reference these individual securities? Is it a daily occurrence, or similar to the weekly NQ chart, perhaps once a week? Or rather, perhaps driven more by a specific occurrence (i.e. today's massive range)?

[Fluke 10]

Apple - Macro, Weekly, Daily, 5H

[DbPhoenix 42]

Thanks DB. Do you mind if I ask how often you reference these individual securities? Is it a daily occurrence, or similar to the weekly NQ chart, perhaps once a week? Or rather, perhaps driven more by a specific occurrence (i.e. today's massive range)?

 

StockCharts enables you to create "candle glance" groups of up to 10 tickers. So it takes less than a minute if you set it up and bookmark the page.

 

I check them primarily when the NQ is nearing an upper or lower limit or a mean, primarily for confirmation. I don't enter with a bias of any sort.

[Fluke 10]

Microsoft - Macro, Weekly, Daily, 60M

[Fluke 10]

StockCharts enables you to create "candle glance" groups of up to 10 tickers. So it takes less than a minute if you set it up and bookmark the page.

 

I check them primarily when the NQ is nearing an upper or lower limit or a mean, primarily for confirmation. I don't enter with a bias of any sort.

 

Excellent - I'll look into that. I suppose this is one of the benefits of having a more "full service" brokerage like TD Ameritrade can be of use. I'd prefer not to pay $7/RT for it though.

[DbPhoenix 42]

Excellent - I'll look into that. I suppose this is one of the benefits of having a more "full service" brokerage like TD Ameritrade can be of use. I'd prefer not to pay $7/RT for it though.

 

Actually, it's free. Just go to the SC homepage. You'll get candles and indicators, but by this time, my brain automatically filters them out.

[Niko 10]

From the mean to the LL back to the mean all in one day. 100pts each way. When's the last time you saw that?

 

Impresive, did you stay the whole day?

[Niko 10]

Meaning that if one can't find a buyer for what one has, he either lowers his price or looks for another buyer. Fear is not an issue unless he just bought the goods himself and is now having trouble unloading them. If he put everything he had into them, then, yes, there might be some fear entering into it, particularly if he has a big payment on his cart coming up. But, otherwise, it's just business. Discount the winter coats in the spring, discount the tanktops in the fall.

 

How did you learn to read fear in price action, what can I read to get a deeper knowledge of that?

[Fluke 10]

Google - Macro, Daily, 5M from today. Looks an awful lot like....

[DbPhoenix 42]

How did you learn to read fear in price action, what can I read to get a deeper knowledge of that?

 

"Trading psychologists" love this sort of thing because it enables endless gurubabble which can and often does seem profound but is of no use whatsoever. Perhaps the best way to understand it is to examine the self. This provides a double-whammy since it helps the trader to understand the behavioral dynamics of others as well as fix whatever problems he himself may have.

 

We are more alike than we are different. If a trader panics whenever price moves against him by a single tick, he can bet that their are millions of other traders out there who are experiencing the same emotion. If he understands how supply and demand work, and if he can view the situation without emotion, the emotions of others become more clear, particularly as they influence the balance between supply and demand and thus the movement of price.

 

As to trading without emotion, that's where the Zen comes in.

[Bern 10]

This is how I see where we are one hour and a half prior to RTH open:

[DbPhoenix 42]

This is how I see where we are one hour and a half prior to RTH open:

 

Don't overlook the significance of 04: where are the levels beyond which traders can't find trades? This will be particularly important at the opening bell. If you want to wait that long.

[Fluke 10]

Where we are currently...

 

Daily - back above the mean of the down channel, having bounced hard from the previuos lows, down channel demand line, and longer term up channel mean. Perhaps a trip to the down channel supply line is in the making.

 

5000T - all of the action down at the lows of the down channel has created a lateral range, of sorts. The boundaries are rough, but the image is there. Potential areas of interest are marked on the chart.

 

10M - as is often the case, the ON session formed a fairly clean and definable lateral range. Just before I got to my desk, a DL break, RET, and entry occurred at the lower extreme of this range. It is now testing the MP, and I believe will likely test the other side. Unless it can't make it there before the open, in which case I would see a move back to test the lower extreme as a likely scenario.

Edited April 16, 2014 by Fluke

[Fluke 10]

As noted price has made it from the low of the ON range to just shy of the high pre-open.

Failure at the top of the range and back to the MP.

Reversal of the MP and back up to the highs.

Bouncing around at the MP, my least favorite place to trade. Will be waiting for a test of the extremes and a REV, or a B&RET.

Break out the downside, no chance of a REV.

Bouncing from YHIGH.

Strong bounce, LRH breached, trading the next RET long.

-in

-up to the range MP

-testing the range low

- failure, out

LRL breached, trading next RET short.

-in

-expecting low to break immediately, it does

-down through the top of the range I had marked on the 5000t

-some potential congestion near yesterday's close

-exit partial

-exit remainder on failed continuation, out

Back up to the range low and bounce back down

HL, trading long

-in

-violent response buy sellers to the first impulse by the buyers, out

Sitting tight for the time being. Hinge/micro range.

Break up and out of the range/hinge, B&RET planned

Back up into the ON range.

And back down to the micro range

And back up to the ON range.

Will pass on the short RET back into the micro range

And another hinge.

Break out to the downside back into the former micro-range.

 

I have other things to be doing rather than watching this market coil.

Edited April 16, 2014 by Fluke

[Bern 10]

This is what I saw today.

 

There are two charts: a 20 sec. chart with entries and exits marked and a 1 min chart with only entries marked and some of the sl/dl drawn in real time. Arrows are entries and squares are exits. Sorry for the time scale: there is a -6h difference to ET and -7h to CT.

 

My comments are in blue if were written in real time and if otherwise they are in black.

 

-1526 market close to rth open and has been in a overnight tight range between 3513 and 3504-02

-1532 took a long at 1 but I think this is an error since upper boundary of overnight range could reject (As it did, not even reaching 3513 ovh)

I hesitated about reversing the position and taking a short at the reversal, 1st yellow circle and red square, but I did not.

-1534 waiting till range is broken

-1539 took a short at 2 after the ov range broke and buyer were not capable to go back inside again in the mini pullback reject marked

-1541 I exited the previous short (blue square and 2nd yellow circle) and hesitated about taking a long there

-1543 long at 3 although unsure since market is entering back again into the range, maybe it will test upper limit...

-1548 short at 4

-1557 buyers stepped in after the lod and a higher low and it went straight to 3503ish (lower boundary of ov tr again) without giving any pullback. Perhaps after the higher low where I exited...?

-1601 it went back more than 50% of the previous swing from lows, broke the dl and I entered short at 5

-1603 after the upswing from lows and now this downswing that does not look like it will go further down (TDTDB?), I foresee a hinge or a trading range forming ...

-1607 yes, a tr

-1619 breakout of the hinge, waiting for a pullback

-1624 long at 6

(at 1628 should had been clear that this was not going up, forming a hinge and maybe exit before at break even and not waiting more)

-1634 took the short at 7. Hesitated since market was at the level of the midline-apex of the previous tr-hinge

-1638 exited at blue square

-1640 re entered short again at 7b. Doubts about it...

-1647 I added a short at 8, after the previous lod was broken and it pullback-rejected.

-1648 exits

-1653 logn at 9

-1659 exit and done from the day

(and maybe this last long should had been scratched earlier when it was not going above 3491ish and not waiting. TDTDB?)

[bobcollett 10]

Don't overlook the significance of 04: where are the levels beyond which traders can't find trades? This will be particularly important at the opening bell. If you want to wait that long.

 

Hi Db

Whats 04?

What do you mean by "the levels where traders can't find trades"?

regards

bobc