Sandbox

[Niko 10]

The last couple of weeks have been all about means and midpoints and hinges and reversals. There have been no trend channels nor have there been many well-defined trading ranges.

 

Yes, I have noticed the change in environment. According to your experience, when the environment changes, what are the clues in the context that allow one to expect a day like yesterday, compared to the trend days of last month.

 

AMT has become more important than SLA, particularly with regard to retracements since they tend to come late, if they come at all. The SLA still works, but only if one is willing to tolerate substantial recoils. There also seems to be a general short bias among you, and this has been inappropriate.

 

I am working in understanding where it is appropriate to risk a REV in order to take advantage of this.

 

Regarding the short bias you are right, I will approach the market without any bias next week, thanks.

 

It is necessary to map out in advance potential areas and islands at which price may reverse, as it did off 45 this morning. If you get this posted by 0900, you may better be able to help each other.

 

I usually ignore swing highs and lows, but I will acknowledge them in the future.

 

As for the retracements, it is important to remember that price is continuous. Note the arrows I posted to Dave's chart. This is a perfectly good retracement and can be played just like any other.

 

Yes, this is other thing I need to overcome, I have mistakenly get used to wait for a "bar" with a LH in order to "admit" it as a RET, but looking at the 20 tick chart for weeks had made me realize I am missing a the reality when I frame it like that. I think is inertia and I will deal with that.

 

It may also be necessary to hang around longer. 60 was obvious, but one had to wait for it. Whether or not the 16pts was worth it is up to the trader.

 

Yep, that is another thing I have noticed, will have to make some schedule changes in order to be able to accomplish this.

[Bern 10]

...

I usually ignore swing highs and lows, but I will acknowledge them in the future.

 

.

 

 

Although I prefer to take my entry-management-exits decisions from time based bar charts, I allways keep an eye on tick based charts because I find them easier to spot some areas as the one in question.

 

Have a look at this 1500t chart and how the level-area marked by the yellow line was more than a prior swing high: it was a previous swing high-resistance that had shifted to support that was tested at least 3 times before the yellow circle area discused in your msg.

 

It does not take too much screen to have one chart as the one attached. Just my two cents

[DbPhoenix 42]

According to your experience, when the environment changes, what are the clues in the context that allow one to expect a day like yesterday, compared to the trend days of last month.

 

Tons of scratches, trades that don't go anywhere, lots of overlap, multiple hinges and even hinges within hinges. The pattern of making a quick opening high and low and settling into the midpoint for an hour or so was characteristic of the top of the internet bubble. This is not to say that we're topping. On the contrary, we have been moving upward fairly consistently for a while. But we are clearly grinding.

 

I am working in understanding where it is appropriate to risk a REV in order to take advantage of this.

 

You're going to have to back up a little in your preps. If, for example, you left out the aftermarket consolidation on the 21st, you would have no reason to think that 34 had any importance on the morning of the 22nd. You might therefore see that plunge as a cascade rather than a climactic low and wait for a continuation rather than take the VREV. If you recognized it too late but recognized it nonetheless, then you'd be prepared to wait for the test, which you got at 1025. Otherwise you might see it as another leg down and short it. Same thing yesterday when price bounced off the midpoint of the previous day's range. Not that bouncing off the midpoint of the previous day's range is a lock, but the trader should at least be aware of the fact that it is there so that the reversal does not appear to be coming out of nowhere.

 

Trading reversals is more nerve-wracking than trading the extremes of TCs and TRs with retracements. And there's always the option of waiting until the market begins to form these again before re-entering the market. But learning how to trade them is worth the doing if only in sim.

[DbPhoenix 42]

Although I prefer to take my entry-management-exits decisions from time based bar charts, I allways keep an eye on tick based charts because I find them easier to spot some areas as the one in question.

 

Have a look at this 1500t chart and how the level-area marked by the yellow line was more than a prior swing high: it was a previous swing high-resistance that had shifted to support that was tested at least 3 times before the yellow circle area discused in your msg.

 

Unfortunately, by using bundled tick charts you miss out entirely on, in this case, the lengthy congestion, which is fine if you don't find that informative.

[Bern 10]

Unfortunately, by using bundled tick charts you miss out entirely on, in this case, the lengthy congestion, which is fine if you don't find that informative.

 

Yes, it is true. I also look and use for preparation time based charts as 15, 60 or 240 min. And yes, I find congestion informative. Maybe then the issue or question is if I look too many charts and it is redundant and unnecessary to do it. Thanks.

[Wolfhound 10]

Having reviewed the last week, and the posts by others I can see that to get this to the next level, I need to strike a balance between respecting the continuous nature of price, to allow for better entries on smaller timeframes, and to avoid overtrading by limiting the trades to the areas with higher probability of sucess, such as the areas identified in the market preview, and also whatever new highs, lows, congestion etc. that are determined by price in real time. Good luck to all you traders this week.

[DbPhoenix 42]

Looking forward:

 

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[Wolfhound 10]

We have really taken off in our uptrend over the last week. We may even get parabolic this week. For sure, a further increase towards the March highs will get the talking heads discussing the rise in the media. A fast rise like this also leaves little congestion to slow down any fall in price.

 

Overnight, we made a low of 677 and high of 688. After a test and fail to reach 88 again, we have settled into the higher end of our overnight range around 86.

 

A break downwards has congestion begining at 660, with 50% of our rise from Friday's lows at 667. Because of the rapid rise in price the main congestion with volume below only starts in the 620's.

 

If we go above 688, our next big swing high is at 712, but we usually have action around the round numbers like 700, because people like round numbers, unless its their age.

[Wolfhound 10]

Okay, markets closed for Memorial Day.

I was unaware of this before the open.

Peace to all, and see you tomorrow.

[Wolfhound 10]

Not much to add this morning. We have made it as far as 96 in the early morning and are

coming closer to the next swing highs. The points that I will watch for are the same as yesterday.

[eminiman414 10]

The trend still remains up. I will be looking for trades above 95 and below 85. If short 78/80 has been a busy price area in the past. Frankly we've spent two months btw roughly 3630 and 3730 so SLA might be more informative as to what's going on with price over AMT. 3 particular previous ranges of price I am looking at are btw 3700 and 3680, 3695 and 3663 and 3678 and 3634.

 

If we break above 95ish the trend would continue up and would be watching 00, 13-15, and then up towards 30.

 

A break below 85 would break a swing low and would also break a fanned DL. Breaking this 78/80 could be interesting if continuing lower possibly 57/60 and so on down.

[DbPhoenix 42]

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[Niko 10]

Had some complications this morning and couldnt trade live. I managed to run a "blind" replay before leaving.

 

Here it is.

 

Will post comments later. Not the best of mornings anyway.

[eminiman414 10]

2 Entries and 1 considered trade today.

 

First the one considered trade marked by the green square. Reasons for the trade was to me this was a typical SLA long entry. Price made a higher high trading up to 97 then on the way down made a higher low. Reasons against was I was waiting for movement above 95/96 to continue upward to enter. We also did reject 96 and began to trade back towards 90.

 

Trade 1 was a short. Tested 00 once broke the DL no short entry triggered. Tested 00 again and did not trade higher. Took the double top short which felt like a dog type of trade but I guess it's all the same. We didn't go higher. Exit was on the break of the SL. Played it tight due to the structure of the previous waves up vs. down. We had trouble at 94.25 took some attempts to break and did not break very far. Price again made a higher high and a higher low.

 

Trade 2 was a long trade. Was waiting for a long signal above 95/96 and this was the one. We traded back up to the double top and originally we pushed quickly off of 00 but came right back up. My entry if triggered would have put us trading over 00 so I said if we trigger and it goes great if we struggle I'll scratch it and look for the short. This trade also had a dog like feel to it. The first DL broke and I did not exit right away although I considered it again given the "waviness" of the day thus far. Fanned the DL and since we did not have much movement away from the new DL and then broke it I exited the trade.

 

from there we moved sideways and I was not too focused after that.

 

Today I was more focused than I ever have been prior and I tell ya I'm pretty tired lol. I suppose however today wasn't too hard of a day to read what was going on although it did not offer huge gains. Doing the prep work, giving myself a road map, and then also keeping focused on the real time context being the current 1m waves and swings etc had absolutely shifted my focus more to the ticker and less on the bars. Not a bad day I suppose.

 

I am not sure I could have done anything else better except maybe take that first considered long trade but it was not part of what I had in mind so I skipped it. Waiting for trades to jump out at me had also helped. I have also come to the conclusion that I do not need to be a market wizard and try to catch every twist and turn. I don't need to be in a Jack Schwager book. I just need to make the good decisions and make money. If I miss a trade that may have worked out so be it. If I take what looks to be a perfect trade given the context and it doesn't work out so be it. All I need to do is prepare and make smart decisions and if I have no clue what's going on or am not comfortable with the price movement do nothing.

[DbPhoenix 42]

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[Wolfhound 10]

Today the general direction was up, but we didn't have many SLA entries. Overall it was fine, with no crazy chop. A day spent mostly watching rather than trading.

 

 

1. Opened with a test of the overnight high at 96 which failed above 97. This is a possible point for a short when it passess back into the range. Need to keep watching for these, but currently wouldn't take them.

 

2. After a higher low we had another fail at the highs, but it didn't turn down this time, and kept going up.

 

3. We hit 701 and the then the demand line is broken, with a retracement back to 701 for a short on the double top. Need to be fast to get these trades, there is a retracement later on for an entry, but it would be stopped out very quickly.

 

4. We turned at 94 and made a retracement to give a long opportunity above 701. After that was stopped out, I didn't see any clear opportunities, and we were getting closer to 11am, so I stopped for the day.

[Niko 10]

I woke up sick today. Will not be able to trade.

 

Good trading everyone.

[Wolfhound 10]

At this stage we are so close to the highs that I feel we should test them today. This is where it will be interesting to see if we get a fall at the highs, or if the news of new highs pulls in the crowd to buy at any price. Parabolic rhymes with alcoholic, and these highs can be addictive.

 

Overnight we made it as far as 30, and have fallen off by 10 points since then to the overnight lows as I post this. A breakout below pulls us back into congestion soon enough. On the other hand a break above has a high at 40 and clear skies above that.

[Bern 10]

I woke up sick today. Will not be able to trade.

 

Good trading everyone.

 

I wish you get well soon.

 

Regards.

[Wolfhound 10]

Get well soon Niko. The market can wait for another day

[eminiman414 10]

Was waiting for a break above 30 or below 20. We have just broke below 20. The goal now would be to look for an entry into the down move heading towards 04/05 which is the mean of the congestion for a good part of yesterday and is also 50% btw yesterdays high and low. I have a sharply drawn TC on the hourly but I don't know how relevant it is or will be. If there is nothing going on below 20 we'll see what happens back up at 30 if we get there. The other price ranges are still on my radar below where we are now. If the bottom of the TC I have drawn holds around 09 i'd look for a long as well.

[Wolfhound 10]

No big breakout today. We moved below the overnight lows in the morning and then into a downward channel. I took a few trades, and 1 out of 4 worked. As I write, we haven't moved far away from the open, so we may have to wait until later for any strong directional movement.

 

 

1. I took a short here after the rejection of 50% at 23. Trying the right tick retracment on this one knowing that it may turn quickly and stop me out. This made it to above 12 before turning. I let it run until we made a higher low, and then moved the stop to break even. Not a perfect trade. Could have got on earlier, but I prefered to enter on the break of the lows.

 

2. After the stop there is a retracement for a long here above 17, which I didn't take. This made it to the previous highs where it turned. Exiting and re-entering quickly is something that I need to work on.

 

3. Retracement for a long again here, which was instantly stopped out. The entry is just below the opening low, but I wasn't concerned with that at the time.

 

4. Demand line break with retracment for a short. We halted at the opening lows and when the price started moving horizontally I moved the stop to 17, just above the high of the 9:58 bar. After the price reached 12 it turned quickly and was exited above 15. This one was a nice clean SLA trade.

 

5. Turned at 50% of the rise since yesterday's low. Back up into the congested area. No descisive breakout today. Since the open we have barely moved 10 points.

 

6. This counts as a demand line break with retracement, but I was looking back at previous trades to see where I could have improved, and I missed it until it had already got onto the next bar. I had my demand line drawn for reference, so I shouldn't have missed it.

 

7. Supply line break with retracement. Time for a long. This on reached the 50% point and turned instantly. A stop below the recent low would have kept me in the trade. Another test of my risk tolerance, but given the fast turn in price it seemed acceptable to close the trade at the time.

[eminiman414 10]

1. Short. SLA trade under 20. Every bone in my body did not want to take this trade. We fired off into 12 and immediately bounced. Got as high as 17 and did not come but a tick more than halfway back to 12. The next bar makes a HH however rejects a tick above 17. The trade was placed but given the bounce I was skeptical. Lost 3 points which I suppose the trade could have been scratched sooner. Would have saved maybe a point to a point and a half so I guess it's not that big of a deal. I had an areas of 13/15 as an area of interest not necessarily as a reversal point but just something to watch. Again bouncing from there made me skeptical. So i'd either be wrong and the trade would have maybe worked out or not been a loss or I'd be right and it would lose lol.

 

2. Long. This was not part of my original plan but since we did bounce and the short did not work I decided to take the long and see what happened as we approached 23. 23 was rejected so I exited the trade.

 

3. Short. Another trade not apart of the plan but sort of went into straight SLA mode. Again no trades above 23. Price makes another LH and again like yesterday had a doggy feel to it. Exited based on 12 holding again and began anticipating a range like day.

 

Note: Trades 2 and 3 were not necessarily part of my plan going into the day but I think it was good to be a little flexible within reason. Trade 3 I don't mind as much as trade 2 since it was counter to the continuing downward move. Seeing this trade not go very far however gave me a bit more confidence in taking trade 3. I have been starting to get a sense of how everything builds off each other. Or using SLA to build "trade ideas" based off the information it provides.

 

4. Long. We got to within a tick of 09 and bounced. Took the RET long. Again this was I suppose a counter move so I was playing it tight. With the context of the waves this trade did not go much more than the previous long trade.

 

From here we started to channel and I suppose two shorts could have been attempted there given what the behavior was like. One short would have been scratched and the other would have worked out nicely considering the type of day at that point.

 

5 & 6. Both longs considered and in fact the exact opposite of the shorts that could have been attempted after trade 4. 5 would have been scratched and 6 re-entered. I would have re-entered trade 6 due to price rejecting 50%/the minor swing low and staying above 09. The idea behind this was that again we barely traded below 09 which is what I had prepared for. In terms of exits knowing how I was trading prior to these considered trades I probably would have exited around 17. Given the nature of the day I stayed away. Had I taken these trades and hung on once the shorter term 1min channel broke trade 6 would have turned out to be a nice trade, again considering the type of day.

 

Moving forward I am wondering again if more emphasis should be on SLA than AMT or if that is almost how it should always be. The plan was longs above 30 or at 09 and shorts below 20. The short below 20 was planned for and although it didn't work, that's just the way it goes. The longs near 09 would have worked out to be profitable overall. I suppose planning for some type of action of price holding below the PDH could have and probably should have been planned for since we broke below it before the open.

 

Feeling halfway decent about how I have been doing. I'd really like to see a choppy day and a trend day and see how I do with those. Recently I am thinking things are looking a lot more clearer however most of the days recently have had somewhat of a similarity to them. We shall see.

[DbPhoenix 42]

8-9pt range. Tons of overlap.

[k p 10]

Question about your chart with the SLA traders from yesterday.

 

On this attached chart Db, would you consider this last trade legit that you didn't mark in? I would have first started with a steeper SL, but it would have broken a couple of times, and any short placed below each crest would not trigger thankfully, but it sure looks like it was setting up for a short though at least 2 time prior to what I drew in. The short that I did add would trigger, does follow the SL down, and also, this bar just above the possible short opens and closes on the low, hence a rejection of traders wanting to trade higher, which would make the short seem even better.

 

Since you didn't mark this in though, is this a legitimate short? Or can you perhaps see that its too much sideways action by now to risk it? The short would of course have to be scratched for a loss, but no way to know that at the time. Thanks.

 

By that time, you're in a range, so it's not a short that I would take.

Edited May 29, 2014 by DbPhoenix