If You Can Draw A Straight Line . . .

Perhaps it might help to think not in terms of buying pressure and selling pressure but of success and failure. 40d was focused on the failure, not on lines, and it was the failure that resulted in the lower high and the eventual cascade down.

 

Yes , thanks. I have been paying more attention to failures and what happens after they occur, still dont have any stats on them and i guess one of the main challenges for the non initiated (me) is to identify when the failure fails and turns into chop.

 

Now you're asking better questions!

Gringo

 

When you're face to face with the Hydra, stats aren't going to help you. You have to determine what it is you're thinking throughout the process. Not what you were thinking, but what you are thinking. Perhaps the only way of doing this will be to use a digital voice recorder. They're cheap these days. Today you would have started recording as soon as price broke out of its trading range at 1010.

Edit: "When you're face to face with the Hydra". Technically, that should be "face to faces".

 

You’re Welcome Sir

And I agree, this thread is a rare gem

RN

 

Niko,

Random thoughts

See if you can equate it (chop formation) to a time of day / time prior to an announcement/ low volume times

In stocks (recall I’m a stock tard) I find chop “typically” follows the morning session – so I've come to anticipate its arrival around 11:30 ish

10 – 15 min prior to FOMC announcements and alike

Summer, and prior to holidays are also high probability of chop (low volume times of year)

I also look to see if today is turning out to be inside/ outside day (of yesterday’s range)

Low volume times (low volume in both the buying and selling) are notorious – so I’m constantly evaluating the current pressure being exerted

Also evaluate the current action - to action that’s already transpired throughout the day

When it appears unexpectedly (not around previous S/R) – it usually takes 3, sometimes 4 stop outs till I get a clue (always be open to it)


Final thought;

For a daily bar to get printed, a H/L and in-between are created – keep an eye on the time of day, and progress of the daily bar’s creation (admittedly this is quite subjective).

But every trad-able instrument has a personality – watching for traits – you may find one..., or two that provide insight


eta

Chop is either a battle ensuing, or total lack of participation from both sides - identify which and wait till victor emerges/ one side takes control

Then you have a trade-able edge


RN

 

Db, RN, 40 and G. Thank you very much for all your help.

 

Primary Areas of observation for me today.
Overnight high and low
Yesterdays high and low
Hinge (I think) on 60 min chart. midline between high and low of hinge is 3100

 

If I may post a few non-random thoughts:

As DbPhoenix and Gringo both mentioned, I do focus on failure. If buyer's have control, then they need to do what buyer's do, which if done with sufficient demand or effort, must put prices up. Failure to put prices up at a level that had previously also seen failure on the part of buyers (i.e. resistance) means I start looking for a trade. Reverse this whole thing for seller's failing at a level where their efforts had previously been exhausted.

My plan for trading the NQ has been built around learning to identify those features of behavior that occur at S/R that would enable me to make a trade as close to what Wyckoff calls "the danger level." For those who've read Wyckoff's course, you know what this level is.

 

You could just about cut and paste my premkt remarks from yesterday for today.

As to the big picture, I see a range that reminds somewhat of those Russian dolls where one is inside of another inside of another.

We have this 52.50 to 148 range, with 3100 the midpoint.

We have a 52.50 to 100 range, with 76 as its midpoint (and note where S finally came in yesterday afternoon - if you go back to last week, you will see that that 76 level was noted, and I don't know how many times we've mentioned the 77.50 +/- area as being one where things happen).

We also have the 100 to 148 range, with 124 as the midpoint. This has also been a level +/- where things have happened over the past couple of months.

Not shown is the 94/95 level, which is the approximate midpoint of yestday's trading range. If price opens more or less where it is (between 94 and 100, I will be watching both of those levels for clues as to who has control, and hence whose side I'm on.