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  wjrusnak said:
So as Db mentioned, we're getting to some key levels in the overall market. This could give us some significant movement.... or not. Anyway, I'm looking at 1740 tomorrow for a possible break-up or a serious rejection back to the lows (this would probably be horrible for the buyers). We're just about at 1740 right now, so I would think that price could move toward 1731-32 overnight and possibly catch some momentum to get to the upside.

 

 

33 is good enough :)

 

 

14560d1256580838-support-resistance-trading-foresight-hat2.gif

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  DbPhoenix said:
33 is good enough :)

 

Yes, seems like I hit the nail on the head. Price did come back to the 1740 area as well, but I was stopped twice before it took off. Then because I missed the long, I was trying to short 1750 area. Took a beating today. O well. Better luck tomorrow.

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  wjrusnak said:
Yes, seems like I hit the nail on the head. Price did come back to the 1740 area as well, but I was stopped twice before it took off. Then because I missed the long, I was trying to short 1750 area. Took a beating today. O well. Better luck tomorrow.

 

This was one of those occasions when the TQ sent the wrong message, or at least was misdirective. There was a clear double bottom at 41 on the tick chart, and though confirmation is always a plus, sometimes you have to forego a divergence which may never come and go with the price behavior itself.

 

As for shorting 50, that was legit, but after refusing twice to drop, that was pretty much that.

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For posterity:

 

Here price finds resistance at 37, breaks away from it, then retraces to 37. Later it pulls away from 40, then retraces to 41, where it makes a double bottom. The only question remaining is how to enter.

 

 

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attachment.php?attachmentid=15005&stc=1&d=1257783931

 

 

 

 

Image1a.gif.0cb8687e63011ed244f0fc1d549f161a.gif

Image1b.gif.de9ad82ef6923a5f0dc755ab411a2f27.gif

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Steelers :) Anyway, buyers easily stair stepped up some former R levels today, which gives us a mess of levels below us now (could be good for longs). Since 1760 looks to be about the mid point of this range the last time we were here, I would look to long there, assuming buyers don't want to lose it. The only problem is that it is a mid point and it's going to be messy. On the other hand, we might not even have to wait long to take a nice clean (hopefully) short at around 1777-1780. If we do lose momentum overnight, I would think that buyers would at least hold 1753... we'll see.

 

dailysrlevelsnqu.jpg

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Hi, thanks for this thread, really enjoying it, I've learned a lot. I have a question fo DB and others. It's just an observation that occurred to me yesterday as I was watching a trend day develope. When price is moving up and hits resistance, is it a rule of thumb that the bigger the reaction the the bigger the resistance from sellers? What I mean is yesterday on SPY price moved quite easily through some resistance without much of a bounce, is this a clue to the strength of the buying and a possible hint to it becoming a trend day?

I've illustrated this with yesterdays action, as you can see, not much of a bounce through resistance, just looks like hesitation on the part of the buyers, sellers no where to be seen. Yet in the second example from the previous day when price hits resistance there is a bigger reaction.

resistance1.JPG.d7f2f4df955149486d696c308c4230a7.JPG

resistance2.JPG.b9f2d57340ad71dcbeecd7b4c13a59ad.JPG

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We had a steep ascent since bouncing from 1650, with price already hovering above midpoint of that long congestion zone between 1740 to 1780. Just wait & watch mode for me.

091110_064818_CQG_Screen.thumb.png.6abd309e56b4404feaeb3dcb433ae5e2.png

Edited by NAVEEVIa
grammatical error

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  Placebo said:
Hi, thanks for this thread, really enjoying it, I've learned a lot. I have a question fo DB and others. It's just an observation that occurred to me yesterday as I was watching a trend day develope. When price is moving up and hits resistance, is it a rule of thumb that the bigger the reaction the the bigger the resistance from sellers? What I mean is yesterday on SPY price moved quite easily through some resistance without much of a bounce, is this a clue to the strength of the buying and a possible hint to it becoming a trend day?

 

I've illustrated this with yesterdays action, as you can see, not much of a bounce through resistance, just looks like hesitation on the part of the buyers, sellers no where to be seen. Yet in the second example from the previous day when price hits resistance there is a bigger reaction.

 

I don't see any particular resistance yesterday, so price moving easily through what was thought to be resistance may mean simply that what was thought to be resistance wasn't. In any case, what matters more is whether or not you see a setup and, if so, how you play it. The "trend day" part is just a bonus, something that is determined in hindsight. At the time, you're focused on demand lines and swings.

 

If a reaction at anticipated resistance is dramatic, that suggests first that you were right about the location of resistance. But that doesn't mean that it's all over and that you aren't going to continue the upmove. All it means is that you've encountered resistance. You may yet have a trend day or you may not. Your immediate concern is how to manage what's happening in real time.

 

If volume is low and price is rising, then buyers are facing little resistance toward the move in its entirety. If volume is higher, sellers are more active and buyers are required to contribute more effort to move price upward. If they can't, this is only partly due to sellers' activities; it is also due to buyers' lack of strength. In your example from yesterday, sellers are far more active before price makes a top. Price falls because buyers are exhausted, and they don't come back in force until 1030.

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  wjrusnak said:
Steelers :) Anyway, buyers easily stair stepped up some former R levels today, which gives us a mess of levels below us now (could be good for longs). Since 1760 looks to be about the mid point of this range the last time we were here, I would look to long there, assuming buyers don't want to lose it. The only problem is that it is a mid point and it's going to be messy. On the other hand, we might not even have to wait long to take a nice clean (hopefully) short at around 1777-1780. If we do lose momentum overnight, I would think that buyers would at least hold 1753... we'll see.

 

Given the behavior of price in the 50 area yesterday, that may instead be your midpoint. And it's more recent. Something to watch.

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There wasn't much of an entry for 1763 long and definitely not an entry for 1776 short. Still waiting.

 

I did get stopped on that beautiful double top on lower volume at 74.25 though.

Edited by wjrusnak
I did get stopped on that beautiful double top on lower volume at 74.25 though.

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I got short at 10:12am at 1775.25 then exited at 11:02am at 1767. Talk about way too long for a trade. Also it's breaking down now, but I got what 1 contract could offer. Better day than yesterday :)

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Tomorrow seems like it's going to be a bit tricky. As we speak, we're playing around 1776, which is just four points away from our new highs on the NQ. I think 1777-1780 is a very, very obvious level that should be our primary factor in our decision in a direction tomorrow (big breakout or big reversal). Anyway, we have a mess of levels under us again, which leaves us a flexible long entry (or short cover). What if we break up though? Where do we exit or attempt to short?

 

dailysrlevelsnq.jpg

 

Below is a 30Min chart with an idea of a trend drawn, but this could be skewed with the overnight session and may need to be redrawn before the open. Point being: we may have to rely on swing points and trend lines above 1780 until we get another range developed. No big deal though, right...?

 

dailysrlevelsnq2.jpg

 

And last, but not least: The current channel for the actual index. According to it, we should break up (at least to 1810).

 

dailysrlevelsnq.jpg

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  wjrusnak said:
Tomorrow seems like it's going to be a bit tricky. As we speak, we're playing around 1776, which is just four points away from our new highs on the NQ. I think 1777-1780 is a very, very obvious level that should be our primary factor in our decision in a direction tomorrow (big breakout or big reversal). Anyway, we have a mess of levels under us again, which leaves us a flexible long entry (or short cover). What if we break up though? Where do we exit or attempt to short?

 

Don't forget that tomorrow is Veterans' Day. You may just want to take the day off.

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  DbPhoenix said:
Don't forget that tomorrow is Veterans' Day. You may just want to take the day off.

 

Hm. But I have nothing else to do :) I'll let the volume at open allow me to decide what I should do. Who knows, maybe I'll stare at the screen for an hour.

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  DbPhoenix said:
For posterity:

 

Here price finds resistance at 37, breaks away from it, then retraces to 37. Later it pulls away from 40, then retraces to 41, where it makes a double bottom. The only question remaining is how to enter.

 

 

I'm struggling a bit with entries. I know it comes down to how agressive your style is, but how should one go about developing an entry that one feels comfortable with? If price reach a level that I've observed as potential support I need to be looking for something and not just enter because price is there. I.e entering at support, entering on a breach of a bar high, entering when price have risen a certain distance etc etc?

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  pinetree said:
I'm struggling a bit with entries. I know it comes down to how agressive your style is, but how should one go about developing an entry that one feels comfortable with? If price reach a level that I've observed as potential support I need to be looking for something and not just enter because price is there. I.e entering at support, entering on a breach of a bar high, entering when price have risen a certain distance etc etc?

 

I fully agree with what you are saying, buying/selling because price is at potential S/R does not appeal to me though one can do that with a tight stop. I am watching a 10 tick chart & price bars to see rejection or confirmation of price.

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  pinetree said:
I'm struggling a bit with entries. I know it comes down to how agressive your style is, but how should one go about developing an entry that one feels comfortable with? If price reach a level that I've observed as potential support I need to be looking for something and not just enter because price is there. I.e entering at support, entering on a breach of a bar high, entering when price have risen a certain distance etc etc?

 

Sometimes a signal might be a simple double top or double bottom on a 1m chart (or smaller). A lot of times, I allow price to zig zag on a 1 tick chart and place a stop above or below it (usually about a point and a half), preceding a reversal, then allowing it to tell me what to do. Combining all of this with the TICKQ divergences just allows for more confirmation. Anyway, just keep it simple. Stick to double tops and bottoms at first if you want.... or lower highs/higher lows. Find something that occurs often, repeats itself, and is profitable.

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Well, I waited very patiently and got what I could out of this very slow day. :)

 

dailysrlevelsnq.jpg

 

  • 80 was my level of support
  • lower volume on the test
  • put my stop at 1781.75 to precede the reversal with a safe distance
  • even though it was a V bottom on 1 tick, I was ready with the long stop to catch it

 

This is a prime example of what I mentioned to pinetree above. Did it meet all of my criteria? No. There was no struggle (zig zag) on the 1 tick and there was not too much of a TICKQ divergence. But there were other, and what I feel just as important signals, that I mentioned above, which compelled me to take the long.

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  wjrusnak said:

This is a prime example of what I mentioned to pinetree above. Did it meet all of my criteria? No. There was no struggle (zig zag) on the 1 tick and there was not too much of a TICKQ divergence. But there were other, and what I feel just as important signals, that I mentioned above, which compelled me to take the long.

 

Great stuff. Thanks. I think part of my problem is that I want to trade all potential setups (rejections of support/resistance etc). However, defining an entry I'm comfortable with that catches them all will probably not be possible. Better to keep it simple and accept that I will miss a few trades.

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  pinetree said:
Great stuff. Thanks. I think part of my problem is that I want to trade all potential setups (rejections of support/resistance etc). However, defining an entry I'm comfortable with that catches them all will probably not be possible. Better to keep it simple and accept that I will miss a few trades.

 

I had issues with this at first as well. Just accept that you aren't going to catch all the moves, but make sure you trade the ones you know to be good set ups. One step at a time. Otherwise you'll take way too many trades and lose any confidence you would have in any of one of the setups.

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  wjrusnak said:
I had issues with this at first as well. Just accept that you aren't going to catch all the moves, but make sure you trade the ones you know to be good set ups. One step at a time. Otherwise you'll take way too many trades and lose any confidence you would have in any of one of the setups.

 

 

This is very very good advice.

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