Could you? I thought posts on ET were time-stamped. I wouldn't say you've shared a method. Respectfully, you've shared some principles which could be useful and really isn't anything new (classical TA), but I don't think there's anything here that could help a newbie or intermediate trader make money as it's not practical or accurate enough. For example, buy/sell support/resistance is in direct conflict with chasing breakouts. This is especially true with index futures as you will very often not have a clean break of a level (which may not be clean to begin with). So, is it a breakout of that level or should you be fading the breakout? It's very easy to see in hindsight, but in the moment when it's happening it certainly isn't always obvious unless you know what to expect. Recognizing the difference between the two are vital and certainly not very simple / KISS, IMO. That is, unless you know something more on the subject which could help us. As for my own method, well, I'll like to keep it mostly private. The devil is in the details, though, and that's where screen time and experience comes into play, IMO, and which is where you can understand when to fade and when it's a trend/breakout. That requires more than just a naked chart for me, though. In summary, I would say my method is mostly about trading moves from one level to the next, either capturing a small or a larger piece of the daily range (high-low difference). I use OHLC levels for the day and for prior days/weeks. There are statistical biases and patterns which are helpful in order to know what to expect for any given day. I also have a statistical model which can be helpful to give statistics, both in general and also for intraday real-time predictions as intraday data can be loaded into the model. I also use classical TA (charts), of course. Basically everything that can be helpful in order to have a grasp on where the market's at and where it's most likely to be going next.
Scat, intraday traders say they want volatility in order to be profitable. Long term traders and investors don't want too much volatility, yeah long term volatility is ok but not short term volatility. Please be honest here, would the volatility in copper suit intraday traders? If so, why do we not hear more about trading copper on ET? My opinion, finding S/R levels on copper would be difficult. Traders need to also be aware of after the fact theories, seeing something and doing something are two different kettles of fish. Copper futures, I've had to use a line chart because the copper plots are more dots than bars. Edit: You'll notice copper doesn't even honour round numbers.
Double Top and Bottom. YMMV. https://elitetrader.com/et/threads/...t-right-here-baby.335635/page-18#post-5309309
Very nice chart illustration easymon. Could not agree more on the double tops and bottoms, they're easy to identify and work very well.
Hey there Mickey, I used to analyze charts from Barchart a lot and they're usually fine, but something's off about the ones shown earlier that aren't showing any candles. The HGK23 May copper contract has decent looking price bars going back to at least last June, before which the volume was too low (see upper chart below). Barchart used to offer continuous contract charts like the lower one below from TOS, where the contract changeovers are shown by the vertical green dashed lines. I glanced at 5 minute and 30 minute HG charts too, and they seemed to have well-formed candles and trends as long as one traded during the high volume RTH period. I do think that some other markets like Oats futures might be consistent with your idea, though... intraday charts there are painful to look at.
Yeah, Barchart.com doesn't display intraday on cash copper, it appear they are only showing the daily closing prices. The point I was trying to make to Scat, certain commodities and other instruments go through periods where imo TA & PA don't make sense. Even this head & shoulder tops and bottoms, yeah in hindsight obvious but I can show many instances where h&s patterns fail. I'm not anti TA/PA/FA, but I'm convinced that many trading gurus and others expousing their merits, they're a little too enthusiastic, and stretch their imagination. Traders go through periods where they're running hot and become enamoured with their skill, then along comes reality where they take a hit and suddenly they become humbled again, rinse and repeat. Winning in this game amongst other things is risk control, also luck. Luck because the market behaves in such a way it aligns with your system and your temperament. The window opens but for a while then closes again. You can be in a shitty mood too as an employee and still get paid, but it can work against you as a trader if you are weathering emotional issues, TA/PA probably wont save you unless maybe trading mechanically. Just thoughts.
Scat, I appreciate your attempt to show your KISS method, but I'm with @Laissez Faire on his points. There is nothing simple about this once you need to actually come up with a trading plan which includes where to enter, where you stop out, and where to take profit. His point about chasing breakouts being in direct conflict with the idea of selling resistance is spot on. I took the liberty of going over the chart you post and I want to discuss some areas using your ideas. At B we have a double bottom, but it doesn't bounce far, and breaks through the second time. You drew this line on your chart to I think highlight the support turned to resistance at A, which does work for a reversal trade, but if we used the lower swing low, which is where line C is, then this area doesn't work so well since it goes above the level at C to get to A. And we can even argue that the lower line is a better line since it is a more prominent swing low. If we look at C, we certainly don't have a double bottom as it breaks through. But we also can't really chase the breakout, or breakdown in this case, as it comes back above on its way to A. At D, we have another case of a failed double bottom, and if we tried to short this, well, its barely good for 5 points. If you need to see how price develops at a key point, you're now going to be shorting much lower than where it broke, or buying much higher from where the breakout happened. And this will usually be entering at the worst possible time. Moving to E, we have a failed double top, but maybe you don't like that swing high as its recent. At F, the double top works well, but as stated above, if we are shorting double tops, how on earth can we chase breakouts? G is a perfect example of this. Here the breakout trade seems to work as it shoots up to H, but then comes right back down to almost this same level again. The point at H does provide the double top, but how on earth do we know to take a short at H and a long at G for the breakout? Of course by the time we get to G, we can see the series of higher lows, so perhaps we want to take the breakout at G, but this is also getting into a long trade very, very late. Its clear that when doing this in real time, its practically a coin toss if you should be taking a reversal trade or a breakout trade. Furthermore, if you want to use anything bigger than a 5 point stop, you will now need at least a 10 point target since your win rate will I doubt be better than 50%, and many of these trades don't offer even 10 points profit before price comes right back down to your entry. Don't get me wrong, I love the KISS approach and see many of these setups, but when it comes to actually trading it vs. marking up a chart after the fact, its a whole different game.
1. I said there were "other setups" (scalpers might play them) I didn't mark... and some of them may/would have failed. 2. You need to look at both the ES and NQ charts for structure. That's because they vary a bit in their structure so that there may be a setup in one that you don't see in the other. The key to this notion is that when the market sees support on any index chart, THEY BUY EVERYTHING... not in the same magnitude, of course. 3. The notion about "not chasing breakouts" is waaaaay wrong. All big moves involve breakouts and you need to be on the right side of them. Deal with false breakouts as they occur. 4. Price TA is all about "recognizing setups". That's all you get. You can't know how long the play will last or how far it will go. You have to play everything after the setup "by ear". If a setup ends up being a 5 point move, fails even before that, or goes for 50... you don't get to know that in advance. 5. You need to recognize that the market had been in a bear channel, so should be cautious about any buys... bear markets are more "sell the rally", than "buy the dip" As to your points... B.. was a possible matched low... that fizzled. If you took the play, you saw it fizzle and stopped C.. I have no trade at C D.. I have no trade at D E.. I have no trade at E As to you conflict about "shorting tops and chasing breakouts"... that is a "2-trade situation". You short resistance. If it fails and breaks out, you stop your short and go long. It's not "either/or", it's "both". H.. I have no short. That would be a wrong trade. That the price retraced all the way back to the breakout level is a "bull pivot" and strong buy. For best results, I suggest viewing more than one time frame. You'll see things on shorter frames that are masked by the bigger bars of longer time frames. I posted the trades that worked and provided they key as to what they were. That was my only intent. A trader may have made other plays (scalper) with various consequences. Bottom line... If you had taken every setup I market, exactly as market... and any others that you thought might work that didn't (and stopped when they failed), you'd have made a bundle. Your objective is to "catch some of the good stuff" and putting up with the fizzlers is part of the price for trying.
This is how I draw horizontal TL's, off of the open price of wide-range trend bars that extend beyond prior bar. And only trade first touch. Of course like anything some stops are hit.