Well, I wasn't able to replay monday 10/6. I bought my charger. Drove all the way home, and it was the wrong one. Woops. I finally have a new charger and will not replay monday. Morning prep up next... I also get to SIM a couple hours this morning. That should be fun.
In review of sunday's prep, the short would not have worked. Glad you didn't put it on. Price did in fact reach the channel extreme. And then it's decent to the mean began. It seems early morning friday at NYC open, traders tried to push above this extreme at least 3 times, with each attempt getting weaker. A break of that range would lead to a short, probably break even at best, maybe a point, for my plan. Nice measured move at 1041 EST. Overnight price made a low at 83, almost at the old value range traders were loving at 3980. A nice little double bottom and price climbed right outside of that old range. Current trend of the market is down. Once again we broke out of aprils uptrend the week of 9/19, and have been in a steady downtrend channel since 9/19. Traders continue finding value in their trades at a lower and lower price. Traders are trading currently, inside an established ranged from yesterday, and last night. Approximately this is between 3996, and 4014. 20 point range. Large range. Price overnight ALMOST tested 3980, and quickly climbed. With price currently hovering a little above the mean at 4000, and ALSO, with the rejection of 3980 overnight, a climb to the extreme once again, would not surprise me. 4000 is a nice even number, and it is also the midpoint of the range established yesterday. Traders are finding trades around 4000. Because it's an easy number to remember. Just kidding. Now I'm in a conundrum. I haven't yet made a rule for this. The trading range was yesterday and overnight. However, the trading range broke this morning at about 445. I don't trade ranges. Price climbed back into this range. If I consider this "old range", the 3996 to 4014 to be in play, I won't trade. If I consider that range broken, and what price has done for the past hour, the new range is 96, to 4005. 4000 still being midpoint. I have to answer this question, but for today, I'm going to play the smaller range unless something happens. By play, I'm going to consider a break outside of 3996 and 4005 to be the breakout. Sitting around the mean like this, around 4000 with convergence on many timeframes, Price could go either way. If price breaks 6 looking for upper extreme. If price breaks yesterdays low of 3996, I'm looking for shorts, into 3980, if that clears lower extreme.
With the convergence of 88 on the DT channel and 3980 as a high value area for traders, we're in a range. CHOP. Nice short for about 10 points from the open. Price staying below 80. WOuldn't doubt a dip to 3960. Channel lower extreme.
Review: Trade#1: From the start, everything lined up. Premarket broke a trading range, 1 bar after the open there was immediate rejection of buyers at around 3994. Failed to break a 50% retrace of premarket down move. That short was exited at 10.25 points profit on a supply line break. Traders began to cover and this also happened around the infamous 3980 value area from a few days ago. Trade #2: Was assuming continuation of down move. It did continue only to Double Bottom. 3980 seems to be a value area where traders agree. Full stop hit. 2.5 points. In review, the only possibility is a greater stop, but that means more risk, and my soon to be live account won't handle greater stops at this point. If it could, the trade would have been break even at best. Trade #3: After trade #2, we had a range. price stayed below 3980. Maybe a temporary value being found around 3978. This range broke at about 1005. A long initiated on first retrace. Scratched trade. Seems we simply jumped to another range with MP at about 84. 74 to 86 seemed to be range now, with 80 still being a value point. I stopped trading at 1025 to review my trades before work. I would have initiated a couple more. Especially a short at 1053. perfect setup. Right now at 1111 we are back at 3980!!! LOL. Trade #4: loser. 1 point. Should not have taken this. I played a range. I didn't follow my rule. DUH. Those who succeed follow their well-tested, proven, trusted plan. Won't happen again. On the 60, we have an interesting set-up. I'm not sure what I think of it. Traders find value around these means and midpoints. Price usually reverts to these value areas. Right now, price is almost at a convergence of 2 value areas. I'm still new to this, but does this suggest an explosive move? Or simply even more equilibrium? If more equilibrium, then 3980 might be around for a little while. All in all, I have now had 3 consistently profitable days. Last thursday, friday, and today. Todays P/L 4 trades 1 W - 10.25 1 L - 2.5 1 B/E 1 L - 1 Profit: 6.75 points. P:L - 5.86:1 Avg Win 10.25 Avg Loss 1.75
10/8/2014 Prep Current Trend of Market -> Still in the downtrend from 9/19. Possible reversion to 3760 in a 5-7 weeks which is previous '09 channel. Watching 3822 on the weekly where substantial buying pressure came in and pushed the weekly to new highs by 9/19. After yesterday's action we are at the lower extreme of the downchannel on sitting around 3956. AMT suggests reversion to the mean. It should be noted that we are at the 50% retrace of the 8/8 massive buying moment. One's Place in Current Trend -> After finally breaking through 3980's value range yesterday price made it's way to lower extreme. It's interesting because there is a nice channel forming inside this larger one that began on 10/6. Timing of entry and management: Yesterday's High 4010, YL 3948. What am I looking for exactly at 930? AMT suggests reverting to at least 83-84 which has been a value range. However, for two days price has been finding value in a steeper channel down. Price could break this channel. I'm prepared for both ways, understanding that the probability is up towards the mean and maybe more. possible retest of yesterdays low before take off. After yesterday's dive we are in a range premarket between about 965 and 951 with a mipoint at around 59-60. Trader's are finding value at this price. It is lower than the previous 80. By 20 points. This suggests that traders continue to find value at lower and lower prices. Accumulation could take place and push prices to the mean at 83 84. If we tank, I'm watching 820 carefully. Price must break range before play. This rule has been a very good one for me, and tough to follow. But I learn while in a range.
Today was difficult. I failed to observe something rather important in my prep. I did mention a down channel, inside of the main 60 minute channel. However, I failed to mention that there is a hinge/wedge setting up because of the convergence of these two channels. Obvious equilibrium and range. I also realize that I need to define my rules for when a range is "broken". If I realized the hinge on the hourly, it would have saved me a lot of pain today. Hindsight blows. Knowing now that there is a hinge there, I would not have played all morning, except for maybe the first trade. "Note to self": You need to look for these hinges on the hourly. You have been looking only at the channels and means. Notice the hinge, and possible areas of congestion. Attached is hourly with what I'm talking about. Trade #1: Break Even. This is why I need to define my range BO rules. The range broke at 934, with conviction. However, immediately rejected. I went long on a small retrace, because my thinking is that if price is taken outside of this range, the range is "nullified". How wrong I am. Price does what it will do, and probabilities suggest revisiting the mean, especially when there is a hinge setting on hourly. Trade #2: -3 points. Should have realized the range was still in play. Once again, prep would have helped here. If I acknowledged the existence of this range, I would not have played. Long at the top of the range. Trade #3: -2.25 pt. Revenge. No Patience. Thought range broke. AGAIN. FAILURE TO NOTICE THE HINGE! AH. Trade #4: Winner. 1.75 pt. Scratched early. I got nothing. Trade #5:-2.25 points. See #1 and #2 Trade #6: -2 points. See #5. 6 trades. 4 losers, 1 Winner, 1 B/E P/L --> Losers 9.5, Winner 1.75 = -7.75 points, -$155 per lot I'll let you calculate the rest. But I'm learning. At 1035 we are still hinging/wedging. Attached are todays trades and also the hourly with the convergence of two channels. Obvious congestion. I could have seen this earlier. It would have saved me trouble today.D LOOK FOR HINGES ON HOURLY. *note to self*
MIdpoint/apex seems to be 51. I'm going to go review AGAIN, on my nice printed charts. Then I'm going to wipe my ass with them. I'll remember this day...
seems like a down channel kind of day. I can't believe I didn't see this earlier. Off to my day job...