Follow-up on the fractal patterns = pivots. If you get in front of these on a trade and the level breaks, good to go. You've got program surges filling your sails.
Looks like VIX put in PIPE-TOP at 35-37 level almost matching August top. That will do for a while and volatility will return to normal. Yes its been a hell of a ride down last few weeks with these vermins of Wallstreet. Liars, hoodlums, and conniving thieves in double breasted suits..
Excellent... also I have observed strong volume and buying acceleration when the NQ breaks its low of the day before and then reverses back up thru it after trading below it for a half hour or so... Really big pops... the boxes accelerate this OOPs trade to the max... <img src="http://www.enflow.com/p.gif">
<i>"Really big pops... the boxes accelerate this OOPs trade to the max..."</i> Oh yeah, the triangle = wedge breaks in ES have been more trappy than legit. Every day I've seen a couple of perfect wedges break one way and immediately slam the other direction on big volume for distance. This morning's example was free money... easiest trade of the day.
I doubt I have as much screen time as some members... However, I noticed the increased difficulty in trading in comparison to several years ago also. It's reduced the risk/reward ratio here. I read that almost 80% Equity Index trading is automated now. Not sure if thats true or how someone came to that conclusion. Austinp: Sir I'm afraid I don't see the pattern in your first example Is it 15:10 - 15:20? The second example is obvious, but I think traders have been fading the initial direction of a triangle break for a long time now.
Thanks for the plots, Austinp. A picture is worth a thousand words. I too have noticed that fakeouts in the expected direction out of triangles seem to be rather prevalent. Also seeing a fake move in the TRIN is preceding the real move much of the time. I'm challenged to the full extent by this market, but apparently catching on, as today was much better than yesterday for me.
<i>"Austinp: Sir I'm afraid I don't see the pattern in your first example Is it 15:10 - 15:20? The second example is obvious, but I think traders have been fading the initial direction of a triangle break for a long time now."</i> First chart shows trendline breaks of 5-bar fractal patterns. Fractals (pivots) are very common base signals for mechanical system volatility breakouts. The filtering process for exactly which ones to trigger can include volume studies, momentum, highs / lows, x-number of bars back, much more. Obviously the big programs that center around breakout strategies are somewhat more complex than easylanguage in a retailer's box. But, core approach appears similar. Key for us is to get in ahead of those anticipated breaks, or add to initial positions into the surge moves when levels break. I'm almost always in ahead of those key spots on a chart, enjoying the momentum push when it unfolds. Oops trades include failed wedges and failed coils, i.e. the box pattern edgehunter described... which is actually a "spring" pattern. About half these wedges break and run as expected, it's the failed pattern types which really surged on volume this week. It was very deliberate failure, leapt out at us for easy plays.
I see what your saying now. Thank you for explaining the fractal pattern to me. Yea gotta get in right before the volume for sure. Or you could be left behind on a big move like I was today