We bounced on the 50% retracment of the Oct 27 -> Oct 28 swing, but I'm out from the market at the moment, due to the three lower highs as well as the proximity to the Sept high. I'm traveling right now so I haven't been paying as much attention last couple of days, but I guess we'll see tomorrow in which direction it breaks.
Whales and Elephants make the tops and bottoms They also leave tracks Surf and Turf...., anyone ============== Your point is a good one Alpha crawl / walk / run - and never form an opinion / think you're smarter than the mkt RN
Big picture going into the open is this. a - As Roffe pointed out, here is the rise from 27th-28th, complete with the 50% level. b - Price stopped falling after the news at exactly this 50%. c - Here is a lower high on the hourly chart. d - And yet another LH. This one here made me draw in my SL yesterday, but it broke. I kept this line on here though to use as the upper line of a hinge. e - We could say price broke up above the hinge, but the high here is yet another lower high on the hourly (tiny lower high, but still a failure to go above the previous high). f - We went through the apex of that hinge and dropped below that 50% at b to make a LL. g - As we go into the open, we are climbing, but I'd be curious if we can make it past about 74 here which is the apex of that hinge. On a 1 minute chart, price coming back up to the apex to test it after falling out of a hinge would be no problem at all, so there is no reason why this can't happen on the hourly chart. So although going into the open price is rising, we have a series of LH's and LL's on the hourly chart. If we widen our view even further, over two months ago before our big plunge, price spent quite a bit of time between 4050 and 4100 just going sideways. So it makes sense that it takes quite a bit of time now as well to work our way through all these trades.
A - So overnight, I note thing hinge, complete with the apex. B - This apex is certainly providing quite a bit of resistance, and a short below here obviously worked quite well. (but I'm sleeping) C - My SL breaks here. (that red line is a level I got off an hourly chart a while ago. Kept it on here but not sure of its significance now) D - Some definate resistance here now. E - Marked this long in real time since I got up early to see if there would be any action from the jobs report. Not only do we have this level of support forming here now, but we also have a poke down below which comes up, and this poke is the previous level of resistance. So much going on here to be confident in a long. We also broke the SL earlier, and have a series of HH's and HL's. F - Price coming down to here breaks the tighter DL, and just before here is a LH and LL, but in the whole grand scheme of things, price is still going up which is further confirmed before the open. So what does this mean for my long earlier? Who knows... this shit is easy to mark on a chart, but its of course different if in a real trade. I suspect that it would have been exited for just a few points at the break of the first DL. (onto the next chart) G - So here is that apex from overnight brought forward, and price does initially respect this level of resistance again. H - By this second swing low, we can show this tiny range before the open. (this wasn't drawn in real time though... noticed how nicely it fits in with everything way too late. I - This long here is also drawn in after the fact. Its a break above the resistance, and also a fair RET with the two bars of the same height. We would be getting filled just before the open. I have mixed feelings about this. On the one hand, I think its easier to think about just getting out of a trade, rather than to think about getting in. You're either already in the money, or price is going against you and you bail. But if you're not in yet, there is more to think about it seems to me, since you have to wonder first if you should even get in, and then how to manage it. The downside of course is you need wide stops because often we try in both directions a few times before an ultimate direction is picked, so the frenzy at the open might chop you up needlessly. O - So its just straight up at the open. Each of these bars overlap so much, but there isn't a single RET, and each low on the bars is always a higher low. This of course goes for 15 points in less than 10 minutes. Of all the trades where I just jumped on in the past, at the worst possible place mind you, I wonder why I can never manage to do this right away before price goes too far. I tell myself that I want to follow rules, and then after an extended move I have that feeling of missing out so I jump on far too late. Chasing price is never good, but when its obvious what is happening, you might as well do it sooner than later. J - Here is that hourly apex I pointed out in prep... we go right through it. K - Here is our first top. This dashed SL is from the hourly... so its interesting that we stop here. L - We retrace down to here... 5 points lower, very much a typical RET. M - A long should go here, its our first RET after all, but I am very much in a short bias today. There are a few points here to test that previous high, so this is always good that the RET is deep enough to allow for a quick exit if we can't go higher. This is also why ND uses an entry of just 1 tick above the bar. The extra 3 ticks of potential profit, versus the 1 point away entry, plus an extra 3 ticks of room for an exit is compensation enough in the long term for the few times you get sucked into a trade that turns instantly on you. N - We do make a HH, but we also have that ON high at 85, and this is also another LH on the hourly chart, so I'm watching it closely. P - So now a LL. I think ND said before that if a LL happens off a HH, it isn't nearly as good.. or something like this. Yes.. I think this is it.. you want the LL to come off a LH not a HH. Q - So here we do make it up again and we essentially double top. Before we even know its a double top, we still have to place a trade below this bar. If the short fills, it might be a double top, unless of course price comes back up. This is the funny thing about trading. You can only say what happened after it happened, but by then its too late to profit from it. This trade works beautifully though. The fact that this happens below the OH is great, and also that it happens below the hourly SL is also good. But the up move was strong, so although this trade was placed in real time, I'd have trouble perhaps placing it with real money. In sim, or even just the way I mark these trades, its so easy to put them where they should go. Following rules is a piece of cake! But when placing live trades, its like everything changes. Of course it shouldn't, and of course my testing should give me the confidence that I need, but I'm just not there psychologically. I don't mark exits on my chart, that is one thing, which is of course major. My results from the past are getting out at places that are just as bad as where I got in. The entries weren't placed where they should be.. I often chased price. And exits were based on price just moving too far away from my entry, just before price started to turn in my direction. So knowing what to do but doing it with real money is night and day. R - Hmm... not sure where the 50% of the up move would be. Do I draw it from the open... or from H where price left that little support shelf. Doesn't matter, we go right through it. S - Its an easy ride down and we come to the SL drawn from the low overnight, so our 5 min SL essentially. (its the one I fanned earlier at F). We drop below, with barely a retrace back up, maybe 3 ticks, but nothing like a clear RET with a higher low printing on a one minute bar. T - Finally some congestion, but we break to the up side. U - I'm expecting to test the level of the break below the SL right around here, but we do poke a bit higher. No problem, a short below these bars to the right is called for. V - So that short works great, until of course we form a higher low. By now, we have tried to go down two times and couldn't. So have I exited my short yet? Who knows. Can a long we placed here? Hmmm... the bar to the left of here does print a LL, and the last thing you want to do is go long after such an extended down move. But since that short at U didn't break the previous lows below the congestion at T, this is a problem. Of course this will more than likely just be a wider congestion area, so going long is tricky, but there is certainly a problem with going lower. As it turn out, the trade would fill, and the next bar prints even a LL, but then price does shoot up. W - Here we have 50% of that down move. In real time, given the higher lows and the few pokes above, it does certainly seem like we are going higher. We make it 2-3 points above the 50% before coming down again. I hate to micro manage this though, but its true that if I have a rule of getting out of a trade at 50%, then this right here sure looks like getting out is called for, just before price goes down again unfortunately. X - As this was forming, I drew in this hinge. It really is quite pretty, but given the congestion to the left, I know that as more bars print, this hinge might get lost in some sideways action. Sure enough, it does get lost, and turns into a downslopping channel. Y - So we make it to the previous lows again, but do bounce off. Its only been 1 1/2 hours mind you, so perhaps by the end of the day, this will turn into a significant down move. Of course being able to hold a short is only wise if one was to get in at the very top, around 4080, but even then, the 50% level of the downmove was breached. Lets see where we end up though.
Oh man... you what just hit me? I compressed my chart in like this, and noticed that the apex I have drawn at 64 ends up being exactly the 50% level of the down move overnight. I'm not saying that this apex in any way affected this, but seeing that price move above the 50% level of the down move, it meant that the downmove was no longer a dominant force and another reason to start looking for longs. So although that long at the open was completely missed, looking back, I guess there was enough reason to get in. It does looks like we will have lots of sideways action in this 4050-4100 level just as before.
So a few things stand out for me now at the end of the day. A - Following this SL that you get from the hourly chart since it started yesterday, after the FBO around 4082 earlier, we get a clean break here. B - We manage to penetrate the ultimate high at 4100, but no more buying interest above. C - This DL breaks, and given that we have rejected the important level at 4100, going down seems likely. D - We make it to exactly the 50% level of the move from the OL at 4043 to the day high at 4103. 4073 is pretty much 50% exactly. E - Above here is a higher low, but geez, after such a strong down move, I'd be worried to take a long above this bar. I guess if the reversal sets up on a 5 min chart, this is way better than just on a 1 min chart. And knowing that we stopped at the 50% level, the long should be statistically that much more probable than is we stopped either higher or lower down. F - Here we break the SL, and make it just shy of 4100 again.
I find it incredible that we shot up 50 points over night on fairly small volume. It was also much earlier than other big moves during the night I think in that I saw this before going to bed, whereas usually this happens about 3-4 hours before the open. The fact that we stopped dropping yesterday at exactly the 50% move of the day low to the day high should have been a clue, but I just expected that we would go sideways for a while. At any rate, as Db pointed out, we are getting close to the channel top. He said we are about 100 pts away when we were at about 4150, so 4250, but based on my channel, the number seems lower, around 4120 would be the target over the next few hours. I've noticed before as well that when he was calling out the means and such, my number didn't match up too well. Attaching my chart. Unfortunately, I only have OED data for the channel charts, so you don't see the huge rise up overnight here, but you can at least see the limits of the channel. After today, I notice I need to make some changes. As much as I enjoy my posting after all this, I see the inadequacies of the possible trades I plot on my chart. I will have to either enter sim and actually take the trades, or I should just not spend the time posting these charts and instead do the required testing with the time. I think posting a general/larger time frame chart will still be great as there have been good discussions about the macro trend that I would like to keep going, but in terms of hunting for entries, which is of course what is necessary if one is to actually make money from this, I will have to work a bit on my own. As marked on this 5 min chart, there are two trading ranges we will first have to break out of. I do think a fairly significant retrace down is warranted so that the bulk of the traders can test this breakout level since there was no testing overnight. But I guess lets just see what happens.
the move up was probably from bank of japan news last night.... affected currencies and indexes cheers toucan
A - So before the open, we broke out of the tighter range, and broke above the previous swing high. O - Congesting just before the open. The 15 sec chart shows a clear move down, then up again, stopping just before the previous high and then we kept going down. I go back and forth so much between using 15 sec charts to help me see what is going on, but at the same time, being careful to avoid getting sucked into micro trading. I think here is the critical difference though. The 15 sec chart has been horrible for the middle of the day when the volume is down. This is where the algos do their thing, especially in areas of consolidation. But at the open, when the general move is established, I think watching this lower time frame has huge advantages. It allows you to connect more with the continuous nature of price, so a short appeared here at about 61, way before it showed on the 1 minute chart. For the fluid trader who can get out just as quickly as he can get in, nothing wrong with this approach I think. B - Short entry marked here. Tight DL breaks, but we are shorting at the previous high that once broken could be support. I have this marked on my chart, but the market doesn't care about this swing high. Price stopped here once, but when we went through after "A", there wasn't a problem, so this level might just be in my head. Price clearly had no trouble going through this time. I'm really examining lately what I think of these trades I mark on my chart. It isn't so much of a "here I'm taking this short", its more of a "here is where the short should be". I find that these trades, where they should be, turn out much better than where I "feel" like taking them, and hence where they have been taken in the past, always beyond the actual entry and into "price chasing" territory. I would use a RET on a 15 sec chart as an excuse to get in, but when you look on the 1 minute chart, this trade would have been in the middle of a huge bar, so far away from the previous high or low of a bar that should be setting up the trade. Until I actually take these trades in sim that I mark, complete with an exit, none of this matters much, and hence why I'm getting frustrated. C - 5 min DL breaks here which leads to congestion. ND really gave some insight when she said to track how a trade based on waiting for a RET would work out versus taking the trade at the line break when price comes back up. Of course the RET entry gives you confirmation, but the BO level entry gives you a better price. So often I do see that the BO entry, even if it doesn't allow, allows for a cheaper exit. The RET entry fills often and doesn't go anywhere, so the better price might actually make more money in the long run... but I have no firm stats. D - The RET entry is here with this bar on top even going up to roughly test this BO level. Its also your standard SLA entry. Oh.. there is one thing about this that I found interesting while going through really old material last night. Check out this link here were Db discussed the different between a pullback and a RET. It seems to me that the RET only happens after a the breakout. Each subsequent RET is actually a pullback it seems to me now, so I have perhaps been sloppy with my definitions. Here at D, this qualifies more as a pullback because we are already well on our way into this move, and the RET was at B. http://www.traderslaboratory.com/fo...ading-wyckoff-way-archive-435.html#post164636 E - Hit a low here of 4142... middle of nowhere really. F - After breaking the SL, a tight one mind you, here is a RET for a long I would never consider taking now. This is the secret to making SLA work... you gotta know when to skip a mechanical trade because tight lines are bound to break, consolidation is bound to chop you up, and context is king. G - Getting this high, I quickly mark in my 50% of the down more, and we aren't quite there yet. I mark in a short below this bar, so lets see if it hits. The idea is that if we can't breach the 50% level, this down move is still on, at least to a test of the low at E. What's interesting is that price comes up again for a micro double top before going down again to fill... this would give even more strength to the short. I wasn't even seeing the DT in real time though, just waiting to see if the trade would fill, which it does, and I notice it now after marking my letters. H - Having only made it this low, and seeing price come back up, I've got a problem. This congestion to the left gave sellers lots of time to work harder if they were gonna drop this some more. This low here might very well be a test of the low at E, and we stop at the midpoint of this congestion area to the left. So as much as I was loving my short at G, I mark a long above here now, which would be almost the same price level as my short. So do I stop and reverse here? The long clearly doesn't work, and I should perhaps use the fact that the drop down from G to H was so much faster than the rise up from E to G, so this should give me context, but lets face it, in real time, that H could have very well been a higher low. J - The double top provided a place to draw the new SL, but this could only happen once we are much lower. If we were still in that short from G, price only moves against me 2 points when we climb up to here before we drop. K - Finally a LL, so we can draw in that SL. L - Another LL. M - We break our SL yet again and end up back in this congestion area of 42-51. N - Our 50% level of this new down move to include the low at L is now 4150, which we just breach here. All of the action after this is just crap to me. I know I would get chopped up. I see we couldn't go down, but I also see trouble going back up now.. so better stay clear. I should also note that we haven't retraced 50% of this up move overnight, nor did we test that previous swing low at 4133, and price is for sure trending up (the 50% of the up move would be about 4130). So hey... perhaps there is strength in this up move after all. If we really do make it to the channel high today or tomorrow and then turn down, I swear I will sell one contract at the first sign of weakness and hold it to at least the mean of the channel!