No. No point to it. MAs tell you where price has been. I already know where price has been. I want to know where price is likely to go. MAs are of no help there. If you read the thread, you'll see that my charts have nothing on them but the lines I use to illustrate what's in my head.
thank you sir btw, appreciate all of your input. (others as well) DB, I understand that price is continuous, but how much attention, if any, do you pay to wave size when determining price direction? This is where hinges or triangles, whatever you want to call them come into play. The wave size becomes smaller, so if already in a trade, couldn't one just hold onto a position and wait for the larger wave to have its high/low taken out before deciding to exit?
A lot. The pace, duration, and extent of a move tell you a great deal about the balance between buying pressure and selling pressure before price stalls, halts, congests, and reverses (or continues). And if the pressure is on your side, it gives you justification for staying in (always look for reasons to stay in, other than you're too chicken to get out when you need to). As for hinges, the waves don't really apply to directionality or even the balance between demand and supply. The hinge is essentially a rest stop. Traders have pulled over to the side of the road to hit the john, get something to eat, walk the dog. Each "wave" will be successively shorter than the previous one (otherwise the hinge wouldn't form). So unless the hinge is forming at important support or resistance, there's no particular reason to freak out and exit (though if one does there's nothing to prevent him from re-entering later). If it is forming at important support or resistance, then is not the time to go deal with a squash bug infestation. In short, the hinge is not a reason to panic. It is simply an interesting behavioral phenomenon.
When characterizing a market, would the statistics around extent, time and pace of swings help in determining the probability of swing exhaustion? I know this approach eschews any mechanical rules. My question is along the lines of introducing another 'character' in the story.
I have no idea, but I can't see why not. But it seems like a lot of work for what can be easily seen in seconds. Either the waves are getting shorter or they aren't. Either demand/supply lines are being broken (price is rolling over) or they aren't. The danger in introducing statistics is that they might encourage the trader to stay in when he shouldn't. And statistics won't tell you anything about support and resistance, which is where all this foreshortening is likely taking place anyway.
I would refer you back to the charts that DbPhoenix posted in the first post of this journal: Daily and hourly for context, and trade on the one minute. For intraday trading, the 60 minute's relevance is usually all I need. Think about it like this - how often does a trend change show up on the one minute versus the hourly versus the daily versus the weekly versus the monthly bar interval. It takes much more activity to change the context on greater bar intervals. Everything I am doing can be distilled from those three charts in DbPhoenix's original post (at least everything that I am doing right - anything I am doing wrong is wholly of my own making )
I posted this a month ago, another way of summarizing what I look at: http://cdn3.traderslaboratory.com/f...6390-re-trading-off-daily-charts-quintych.png But you're right about the larger timeframes and bar intervals. The weekly has been good for a couple of months. It isn't necessary to check it every day. And the daily takes only a couple of seconds. I should also add that the timeframe is determined by where one needs to look to find support and resistance that (a) are important and (b) are most likely to influence the day's trading. Whatever bar interval one uses is secondary to the timeframe since one can use a nearly unlimited number of bar intervals to illustrate a timeframe.
Hi DB, looking at your chart, have a couple of questions, When looking at the larger time frames, such as weekly and daily, do you pay attention to the trend only ? There seems to be no markings of S/R levels on them. in my case for trading the 5min time frame, I should be looking at the hourly chart and noting key S/R levels for the last one / two weeks at least right ? How about S/R levels that occurred more a month ago, in your opinion, how should we treat them ? Thanks for your time.
Hi Binot, You keep the weekly and daily bar intervals in mind when looking at your hourly and 5 min price charts. When and if the price starts entering a congestion area where the weekly sand daily bar intervals how there was a change in direction or some kind of support/resistance, you zoom in and start paying attention to your hourly and 5 min bar intervals for those potential s/r levels. It's not so necessary to mark all kind of s/r levels so far in advance. For intra-day trader it's not much of a big deal but having some idea about the potential s/r gives a heads up in case price do something strongly around those levels. Gringo