E-Mini's - Candlesticks & Min. Charts, NOT!

Discussion in 'Technical Analysis' started by ProfLogic, May 11, 2004.

  1. They, I am confused . . . nothing new. Explain to me how you would "Read" the price action of the Market if you do not lay it out in a bar or line chart? Please be specific here. I am self taught and am used to reading price action from a chart. I know you can "See" price action within a typical trading program but all you are seeing is the "Change" in price not the overall movement . . . from point A to point B.

    To me, putting price into a volume chart is perfection, the same way you put a movie reel into a projector to see the uninterrupted feature, instead of one frame at a time. And yes, you have to statically set the volume chart to a personally readable amount of bars. I use 2401 contract bars for my interday trading chart and 16807 for my long term position trading chart. And no, it makes no difference whether 2M contracts are traded during the day or 10K. And you include the overmight data as well. Is today not a continuation of the trend established yesterday? Time has no relevance when you are "Reading" any Market price action simply from the standpoint of "Where the Price is coming from and where it is going" and each bar is a mirror image of the previous bar in size and creation. The only difference is the price range created by each bar which is created by the overall price action. The varying range movement is the readability of the chart.

    Finally you add an (ONE AND ONLY ONE) oscillator to ONLY confirm the Support and Resistance tops & Bottoms. Yes I said confirm. An oscillator is imperfect and not to be trusted. Price is perfect . . . oscillators are not.

    You have to adjust the volume bars for each individual Market or stock traded. I base each setting on contacts or shares traded per day. Whatever the amount you choose it makes no difference as long as once it's set it stays the same. My favorite foundation formula is derived from cycles; 3, 7 & 28. After 8 years of research those work out to be the clearest to see and that is important . . . to "SEE" price action.
    #41     May 12, 2004
  2. BrianLA


    The indices are on track to form one today.
    #42     May 12, 2004
  3. dbphoenix


    #43     May 12, 2004
  4. BrianLA


    #44     May 12, 2004
  5. dbphoenix


    Sorry, it's not an evening star nor a morning star. But it doesn't have to "be" anything. What it is is a close at the high after breaking through support, which is a plus no matter how you look at it.

    As to what it "means" in the days to come, who knows? We could reverse tomorrow and head back down. Which is why it's more important to focus on what is than on what will be.
    #45     May 12, 2004
  6. We agree . . . The ES created New Prime Support (Lower Low) and then turned and is in the process of creating New Prime Resistance (Higher High). Where will the ES go from here . . . after it CONFIRMS Prime Resistance it will retest Minor and Prime Support . . . anyone wanna bet? hehe
    #46     May 12, 2004
  7. ProfLogic,

    I'm very in tune with your studies.

    Is your inference to replace the time element of the x-axis in a price series with constant units of volume.

    If so, this is helping me visualize a variation to an aspect of my considerations.

    My thinking, in part, was to breakdown price and volume to it's purest form (time & sales "chart") of data, and plot a price series based on the change in price coupled with it's relative volume, and then applying fractals. Something like...

    delta P (+-) * V per Unit t

    But now I see the fractals of time added are an un-needed complexity. It hadn't occurred to me substitute volume as the x component, and remove time from the equation. This, to me, makes good sense.

    delta P(+-) Per Unit V

    Prof, would you also expand your comment on implementing cycle analysis. Were you referring to a simple oscillator, or something more like Hurst, etc.

    #47     May 23, 2004
  8. A Price Chart made up of Volume Bars (i.e. Esignal charting) is a PERFECT reflection of price. Think about reading a book . . . you just want to read it not hire a translator to read it for you. A price chart is the same way. Commodities are traded in contracts not time or transactions. A varying number of transactions occur every minute and a varying number of contracts are traded for each transaction. Thus common sense or simple logic would dictate ANYTHING you use to evaluate price that wasn't 'perfect" would be worse than a guess. Yet 95% of all traders do.
    The next thing you look for in any Market is what is the only "Perfection" in a Cycle". Everyone gets this wrong. Since every Market is cyclical this is of the utmost importance. The answer is, "Every cycle has a top and a bottom and they are constantly and consistently retesting each other. Since we now know this is "Market Perfection", along with Volume Bars . . . all we need know is the "Perfect" and 100% accurate way to confirm every cycle top (Resistance) and every cycle bottom (Support) [Remember cycles and their extremes are chart specific] The hard part is done. The easy part is confirmation and trusting what you see . . . EVERY RESISTANCE & SUPPORT CONFIRMS ITSELF. (Hint: The key word you are looking for, every motivational guru tells you, you are not one and by the way there is no stinking calculations to figure out.) I only use "one" oscillator because they all lag and are imperfect. So I have learned to use it soley as a confirmation indicator. The secret is to trade price (which is Perfect) and confirm with the oscillator(which is imperfect). This way your confirmation indicator need not be perfect to give you a perfect reading. It only needs to confirm that price has definately made a Resistance or Support level and whether that level is on it's Extreme (Prime Level) or or a Weak (Minor Level). Ah, trading is so simple when you toss away all the discretionary and variable systems and trade with as much clarity as reading the morning paper.:D
    #48     May 23, 2004
  9. manz66


    It is a testing load, just like electricity- buying pressure after that selling pressure vice versa. Price action becomes important at support and resistance level, other than that real price breakout, any one can follow.

    Soros of his kind can manipulate price with the size not us. So, we can only follow low risk/high probability trade. Now, do not ask me what is high or low risk. :)
    #49     May 23, 2004
  10. Price action is important everywhere. You have to start thinking about reading the Market the same way you read a book. You wouldn't just read the first few paragraphs and last few paragraghs of each chapter would you . . . no. Soros of his kind can manipulate price with the size not us. Price action is a story line to be read as it goes TO and FROM each Resistance and Support level.

    "Soros of his kind can manipulate price with the size not us." Who is Soros, I would like to meet him. Nothing manipulates price in an extremely liquid Market. We saw an errant trade of 2000 contracts hit the S&P last July and it did NOTHING to manipulate the trend, just the immediate range.

    "So, we can only follow low risk/high probability trade. Now, do not ask me what is high or low risk." Absolutely correct . . . but if you watch and read the transition from each Resistance and Support level you will start "SEEING" the high/low risk entries. After a while the high risk all look alike and the low risk all look alike. After you learn to read them, even the high risk is tradeable because you will learn it's limits.
    #50     May 23, 2004