Thanks for the response. Nice job. I like the way you analyzed this. It reminds me of one of the original trading books. I can't remember if it's one of the Livermore books or the Wyckoff book. But it's the one where they analyze price moves in terms of the intent of the big buyers and sellers. Something I need to focus on.
I think you're gonna run into this problem with every theory you investigate. There is a lot more information and detail including free videos on the VSA site.I only talked about the bits i use and fully understand after spending quite a bit if time on it.But then i've spent lots of time studying things i no longer use just like everybody else. Others have recently mentioned in this thread, trading is an art.Most of the colours are out there,its all about how you mix them on the pallet and apply them to the canvas. How well can you read the market? I said that last week we were struggling to get above 920.I sensed weakness up there. Look what happened today,we were very close to touching the next key support at 848.(intraday low 857).Now i'm looking for signs of strength at support. Next we must consider the strong bounce from 3.30 into the close at 871.6. Was that short covering or buyers coming in,or both?- i'm not sure yet but i need to feel confident as to the answer of that question before i put another trade on.My analysis could be wrong but this is the nature of the game for all of us. Anyone can study and learn all the technical stuff but how do you become an 'artist'. Only by watching the charts in real time for as long as it takes for you to develop an instinct; because you've seen the same things happen so many times.In the current scenario i wouldn't hesitate to be a cautious buyer around 848,though i am much happier generally being short in a bear market.BTW im sending you a pm regarding todays pattern I would add that when you get that instinct (which can never be anywhere near 100%) there will be a kind of inevitabilty as to where the market goes next which is a nice situation to be in when you're trying to make money!
I agree. I'm nervous about buying near support as this is a bear market and I'm more comfortable selling at resistance. Can you explain how you might decide to pull the trigger once we get near support? Or why you didn't buy at 857 (not close enough to support or didn't like the volume or other factors)? What about the other times we tested, did you buy? Also, any one else you recommend reading (you can PM me if you want.) I read that VSA site a while ago and like you, I took what I could and made an effort to understand it all. I still thinkk their are some gold nuggets there that I missed!
ok,well first off, to attempt buying today was to be on the wrong side of the market, although i knew there would be a bounce around the last hour as the pattern today was a repeat of the previous one in the cycle.However 848 is where i want to enter give or take a few points and it's surprising how often the market will come to you if you wait.I find you have to give it a few points leeway though,as often the market will stop just short of s/r as traders jump in early not wanting to miss the move.Or the market will overshoot gunning for stops. So once i am confident of direction i have zero hesitation in breaking the golden rule of averaging down. Bear in mind i also have a short swing position well in profit to work against.Tomorrows predicted pattern shows a turn at 10.30am which i am waiting for. This will be 13 hours from fridays high 905.4 (13 is a fib no- i know,i know,but it's my pallet!) So if we are near 848 at 10.30 i will buy,or sell any bounce there looking for 848 later. You see,to me,time is just as important as price.BUT i am always very open to changing the best laid plans according to market conditions particularly these days! I'm glad i'm not the only one who could not grasp the entire VSA thing! As to further reading,Market wizards was a good read but it was a hell of a long time ago so i dont know how i would rate it now.I loved Livermore and it's definately one you have to come back to every once in a while. Last time i wanted to read some stuff i googled 'free stockmarket pdfs' or something like that and there are places you can get entire books downloaded free but i have always disagreed with most of it! I follow the es journal on here ,i think its probably one of the best,there's some good analysis and traders there.
Are you talking about mean reversion with a 20 period EMA when price gets x distance from the EMA? What happens when price and the EMA fall at the same rate (a large down trend) yet the distance between price and the EMA remain the same? I know this is outside the context of this thread, I'm just wondering. That post was quite vague, too Specific rules? Ideally I would like to ride (potentially) long trends... but I'd be happy with small profits in a countertrend system as well.
Ok, question about defining trend from a PA perspective: How many swing highs/lows do you need to have an uptrend? For example, is it just a high and a higher low? If so, is it OK if the first high follows lower low? So it would be : LL, high, HL? In other words, how many distinct swing "points" are required? I figure it has to be between 3 and 5. Examples: Are only 3 points needed? Are 4 points needed? Or are a full 5 points needed to determine an uptrend? (sorry the images are so large) The answer to this question will have a large impact on trading