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In realtime, I think it comes down to, in this case anyway, when the market breaks through a near reference point high or low then breaks back, alert levels should be elevated to amber. If it's a good breakout, then why has it come back? In this example from Friday, we moved to 81.50 then actually attempted to retest once (@82.75) before selling to 80.50. Then there are the subsequent rotations I mentioned in my chart before. If the selloff was to continue, it would really need to reverse from not too far from whatever the reference rotation magnitude projects. Actually, if you think about it even the extra 1 tick was a bit of an early warning. Why should it rotate by a larger number of ticks upwards than before the subsequent move had taken place if there was much further down to go?

 

When you are looking for reversals from inside either the prior day's or recent balance range, it's not so different. The only thing is that you won't have that nice break-line as a delineation. But, often you have longer to think things through aswell, as what tends to create the greatest amount of competition(and so swift moves away) is a greater change in price. Like an elastic band if you will.

 

I know it is hard to use this logic in realtime especially when you make a mistake then bias yourself. But for me, this is the best way to identify probable reversals. Put together with the profiles and delta, I think it's all you really need.

 

The comment about products is just that the ES is not necessarily the kindest to traders who like to go with it when the market is potentially turning. Obvious others are products like 6E or even TF/YM/NQ. Perhaps even ZB. But ES is very nice too, so I don't want to sway you needlessly. It was just a thought :):2c:

Edited by TheNegotiator

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Yes, there were signs there Friday. I did recognize the velocity of the bars - rejection of the bottom..it did register "unconscious competence" but my "conscious incompetence" was still focused on the 77.00 in spite of what I observed... it was obscured by a more structured approach - for the sake of discipline.

 

That is what generated the thread I started "Unconscious vs Conscious Competence."

 

I am going to see what I can do to allow for these varibles to come in OR potentially try to allow these scenarios and let go of the original idea if the market "might" be in transition..

 

Easier said then done, but I am going to see what I can do about it...

 

Thanks for your comments here and on the "unconscious" thread..

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Looks like our levels for today have been stolen in the GBX session... Looks like the high is going to be taken out/tested/etc...

 

So Now:

 

Will we blow through and build higher value, and accept this new area?

Will we form an extreme up here and put in a excess either today or tomorrow?

 

How to trade this? Initially buy breaks for a test upside then? The market could also test early then be hit by profit taking...

 

Many possibilities, imho.

 

Key: We know the high up here is not a good high. Also the rejection off Fridays break was strong with really no rotation against it... This is a strong market with a strong upward bias...

 

:2c:

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Well we've popped up on Bernanke comments pre-RTH after a move higher on momentum from Friday and its close. Opening here @1402.75 would be in the "naked" part of 3/19 range which wasn't a structurally nice day. Question is whether we'll just blast through it, fail to hold at nearby support and retest 94/95 or 92/92.50 before next decision, or hold support and auction higher.

 

Here's a chart anyway:-

 

attachment.php?attachmentid=28164&stc=1&d=1332767221

2012-03-26.thumb.jpg.35736a6dbd264bfbc743c7f3d13c53ef.jpg

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Well we've popped up on Bernanke comments pre-RTH after a move higher on momentum from Friday and its close. Opening here @1402.75 would be in the "naked" part of 3/19 range which wasn't a structurally nice day. Question is whether we'll just blast through it, fail to hold at nearby support and retest 94/95 or 92/92.50 before next decision, or hold support and auction higher.

 

Here's a chart anyway:-

 

attachment.php?attachmentid=28164&stc=1&d=1332767221

 

Looks like we have similar views. We both posted at the same time.. :rofl:

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I like to watch just these four markets (NQ/TF/ES/YM) side-by-side. Often one or more of these markets will turn prior to ES, giving at least a heads up that a trend reversal in ES may be close at hand.

5aa710e196daf_snapshot2012_03_2309_20_02.thumb.jpg.94b02e9d2d0dba2105589fedd8c2065f.jpg

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Hmm, I'm starting to think that we might need a flush before higher prices are tested- even taking into account PHS at 10.

 

Clearly feeling was wrong this time, but then again you don't have to be right to profit.

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Well: I got positioned @ 1403.25 & scaled one just before NVPOC @ 1405.00,

 

next target 1407.25 before HOM and CHVN 1407.75..then punt for runner... risk to test of OS High, 1 tik above open...

 

That's all I know... :missy:

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Here's a question for you guys, just relative to rotations..

 

1. Do any of you add on a rotation, assuming structure is still in place, eventhough it might increase your risk?

 

2. Do any of you scalp against you position? Ex. Assuming you can "see" rotation coming Do you take partial off & put it back on to improve your average Price & reduce risk? (You also risk losing trade location)

 

3. Exit/Stop..Do you use technical indicators to get you out or market structure?

 

Curious... since we are all different.. Have any of you tested these various strategies and come up with any conclusions? TX

 

BTW: I have a CLVN @ 1410.25... If we get going here that "might" be my target for my runner.. it is going to depend on how skinney the profile is when/if we get there. Also if I do take it there and we rotate and form an upper balance area I may scalp or take continuation trade for a test of whatever high is in if there is enough range to make it worthwhile...

 

Just sharing some thoughts... trying to keep from falling asleep.. :confused:

Edited by roztom

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risk to test of OS High, 1 tik above open...

 

Nice job tom -- I held a long at 02.75 but bailed just after news for a tick.

 

ON high is 03.75, and open is 01.75 -- is that not what you have?

 

I am also long from the 04s here, but we are 62% relative volume, hmm...

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Just a passing comment here on a fundamental..the HOme SAles Fell, this IMHO is Bullish News... I don't know if it will manifest itself today or not..

 

If the Economy is still "Punch Drunk" then the prospects of further Fed easing stay on the table... :2c:

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Nice job tom -- I held a long at 02.75 but bailed just after news for a tick.

 

ON high is 03.75, and open is 01.75 -- is that not what you have?

 

I am also long from the 04s here, but we are 62% relative volume, hmm...

 

Thanks Josh.. BTW, I wrote a bunch here about my experience Friday. It also was the same issue on the Shorts late in the session Thursday with that move off the low

 

..I also started a thread on "Unconscious Competence" which I think is an element to all this.. Anyway I hope you get a chance to check them out and throw your :2c: in..

 

Yep. 01.75 open.. I am trying to focus more on market structure.. so eventhough things got testy before the news and I knew I could get wiped off the map..there was no reason to bail..other than my fear of loss..

 

Now my Delta, etc.. dropped like a stone and I almost pulled the trigger but price was not behaving as I expected with the Delta dropping like that... My short-term indicators went into sell but the structure didn't... I got confused and almost bailed myself but the structure hadn't been violated and my risk was based on the structure..so I stuck it out..

 

I also see another buy set up against the 1404.25..but there is not enough room otherwise it would be a spot to either add or initiate a continuation but the risk is still to that structure..IMHO... IF it kicks in...

 

 

Edit..since we have 2 15m bars with 1404.25 I "suspect" that will get ticked and the mid-point 1404.00 will be the area to be tested... :confused:

 

We could also lift out of this range.. The 15m bars are overlapping so it will come out one way or the other... Path of least resistance typically is for the easy stops right below at mid-pont and then others may be buyers there..always is possibilites/probabilities :confused:

Edited by roztom

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Just a passing comment here on a fundamental..the HOme SAles Fell, this IMHO is Bullish News... I don't know if it will manifest itself today or not..

 

If the Economy is still "Punch Drunk" then the prospects of further Fed easing stay on the table... :2c:

 

Tom, there's often more to the econ number than what you see on an econ calendar--pending home sales are down half a percent from January to February, yes. But if you read the whole report, year over year it's up -- 9.2% seasonally adjusted (13.9% not adjusted). So the macro picture is quite bullish, 9% higher than last February, despite a small slip from Jan to Feb.

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BTW: As you know I like the 15m bars to kind of see the lay of the land... currently it is a bullish configuration but it needs to make a new high to get going... currently the 1410.00 area is a potential target if we assume this might be a developing Flag... you know I see them in my sleep...The projected target also aligns with the CLVN @ 1410.25 at this time... :2c:

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I have dumped my long here, and reversed short.. I could be trying to out-think myself and the market, but there's a lot of effort here, without much headway in the 05s.

 

Hey!!: Hit the Green button, Not the Red one.... :(

 

Edit: BTW: I can see the rationale for the short... I have a number of things saying we will rotate down... how far, of course is the question.. I posted my potential downside earlier... but I am trying to stick with a longer (?) term timeframe and tolerate these rotations against me...

 

I am trying to stay with the trend and not play counter-trend...this is absolutely no judgement on your timeframe... All counter-trend trades have the potential to be the beginning of meaningful reversals...

 

Personally I do not have the agility to "dance" with the market like that... :rofl:

 

Edit: That Mid-Point looks very attractive to me but a bunch of my technicals are now suggesting to me to exit... I am going to lean on the structure...might be wrong ... Only one way to find out.... :missy:

Edited by roztom

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I have dumped my long here, and reversed short.. I could be trying to out-think myself and the market, but there's a lot of effort here, without much headway in the 05s.

 

I was only short 1 unit so due to what I perceived as the relatively high risk of a short, and thus no scales, so I closed it here at 03.50, for a couple of points. Would like to hold and see if she can make it to 02, but I'll take the sure thing due to small size on this one.

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Have about a half hour before I have to get back to the markets

 

the main concept that I wanted to touch on was the idea of using standard deviation as a tool for identifying prices where the trader might find favorable entry

 

Today I saw that the markets were going to be operating at the boundaries of my time based pivots.....so I look to my volatility bands (my way of expressing standard deviation) in order to obtain some anchor for a reversal. Today for example my upside bands were (taking friday's close as my point of origin)

 

!st standard deviation at 1400.50

2nd standard deviation at 1407

3rd standard deviation at 1414.50

 

Notice that price moved up to test the 2nd standard deviation, then failed (up to this point in time)....

 

Also in the attached chart I show what I call an algorithmic reversal pattern (on the 3 minute time frame)

 

The red arrows show multiple points of entry for this trade.

 

Edit

 

Important to note how risk management plays into this...for the reversal itself I look for price to display characteristics of failure....one of which is the wick at the top near 1407, followed by retracement into the supply node...all the while I am monitoring market breadth, the NYSE Tick and time & sales....time of day also plays into this as happening in the time period from 7:18am PST into 8:30 which is near to NY lunch hour....for this trade to work the ideal entry is as close to lunch as possible...If I am wrong, price would reverse on me at 1403.75 (approx) and so that is the primary scale out point....

5aa710e1a9ceb_Testof2ndSD.thumb.PNG.1dfb6718a6b1100ae5c108cbfb3383b7.PNG

Edited by steve46

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I was only short 1 unit so due to what I perceived as the relatively high risk of a short, and thus no scales, so I closed it here at 03.50, for a couple of points. Would like to hold and see if she can make it to 02, but I'll take the sure thing due to small size on this one.

 

Good exit, IMHO... I got a buy signal 03.75... for a potential continuation & upside rotation... I did not take it since I only have one scale out and it would basically just put my full boat back on with the same initial risk and no price advantage..

 

This is still in park but until it violates the open I am still with it...

 

If we can get past the midpoint then this will look better than a dung heap...

Edited by roztom

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What are you measuring volatility FROM, with respect to? VWAP? TWAP? Moving average? ...

 

As mentioned in the post, from the previous close ("taking friday's close as my point of origin")

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