i hope you're not assuming that you can predict every move and are never surprised,fundamentally we are seeing fear drive the market,that is hard to chart predictably
exnergy, Thank you for posting the uncluttered view of your problem in trading. I'm sure you found my prior contribution to be unsatisfactory. I was just trying to begin to respond to you and I was handicapped. Attached is your original illustration and I will work around the clutter. there are four periods of time labelled with horizontal blue lines in the region of the variable that holds the solution to your problem: VOLUME. I labelled each of the four periods with capital letters: A, B ,C and D. They are bue in color and are found in the volume part of your chart. Before and as price moves it is important to consider volume. The reason is the P, V relationship. As you see in duration A price is not moving. The reason is, is that volume is low. When volume shifts from low to higher, then, in a while, price will begin to move. A, B, C and D illustrate this. For you to make money by trading price moves, you have a brief window before price moves and after volume has gone from low to higher. You need to observe the way price will be moving with the advent of higher volume, otherwise you will enter on the wrong side of the market. A safe no brainer way is to do bracket entries. If you are more skilled then you can enter in the dirction of the price move. D is where you think you are screwing up. You also are screwing up in many other places, too. The prior times, 1 and 2, before what you count as 3, you can also learn to succeed at those problem areas for you as well. I didn't label these two areas since the chart is cluttered too much and since they were omitted on your marginal effort to help me out. In summary, it is ALWAYS possible to have a leading indicator of pending price movement. Low volume ending with higher volume, gives you an hour or so on an equity (on a 30 minute chart) whereby volume moves and within two bars price will then move. For the fractal of your chart, just look and se that it is on the bar or so following the end of low volume. If the direction is troubling because of lack of skills, then use a bracket entry. This gets the entry done for beginning to make money. To complete the making of money, you need to know what to do as well. Here volume signals in advance as well. because you cannot understand that I needed an uncluttered chart, It is a little difficult for me to get you straight on the exits with an illustration. as volume peaks, a little later in time, price will reach the extreme of its move as well. Extreme means down limit for a short trade and extreme means upper limit for a long trade. QED <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2116365" width=800> click on image to enlarge PS: Your indicators are smudged with some red so I can't "fix" them easily. They do not work at this point since they give no signals related to making money. Taking them off your display would be the first step.
Well this is something I can agree with. Thx for Your opinion. So I guess - a trigger is important to enter the trade - as a trigger stochastic or something like that might works? Higher time frames confirmation is also desirable? When we are in a movement - we should observe volume to predict where move may ends. But volume is something that is happening, now and after, it is lagging stuff . Isn't it? excuse my english , as I am not native speaker btw. could You explain bracket entry term? <img src="http://img205.imageshack.us/img205/1431/20081011unclutteredmy7.png" width=800> click to enlarge
jack .....there IS NO leading indicator of price except your crystal ball. Please stick to your own threads and stop leading beginners to believe there is ANY way to predict stock/futures prices. ;-)
so is this your serious attempt in answering the OP's question? LOL. So, herd behavior dictated it broke down the third time and not earlier? Hehe... Here is my take: Play with your indicators as much as you like and try to make money BUT at those times when your indicators stop agreeing with the price action (and they will inevitably do a lot of times) then forget about your indicators and entirely focus on the price action. In your example, set your stop at the support you indicated and when the prices trade down then get out of your longs or better even, reverse into a short position. Its ok to take bets and to pick a direction but when price action proves you wrong then go with the momentum. Why it broke down at the third attempt and not earlier? I dont know nor does anyone else. If you believed in your indicators/methods you would have made money 2 times before, then you would have gotten stopped out the third time with zero loss and could have even reversed into a short. Thats my approach to trading and has served me very well so far. Best
My newbie explanation: The market always moves in waves. The magnitude and the timing of these waves depend on the mass behaviour of the market at that moment. Each wave is independant from the previous one. Each wave is a result of the analysis of what happened previously. In fact the previous waves can have an influence on the next one because they can influence the decisions made by the market, but there is for sure not a 1 on 1 relation. To me the three waves fit logicaly in my system. That's the only thing i'm interested in. The magnitude of the last one was stronger so it went further.