is resistance at the height of the bar or the candle wick?

Discussion in 'Technical Analysis' started by cashclay, Oct 25, 2017.

  1. Well, we survived an earnings release and still showed this pattern...both $35 and $37 showed it today. Doubt of $40 by January has evaporated. Doubt in the chains will be punished. Believing what they say will be rewarded.
     
    #21     Nov 9, 2017
  2. My posts from October 26
    The chart from today...I'll let you decide if the options chains carry any predictive capacity. :)

    Obviously, I missed on the timing...but matters not to this bull!

    [​IMG]
     
    #22     Nov 15, 2017
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  3. vanzandt

    vanzandt

    You nailed that one to the penny. SQ closed at $37.03 for opex. Wow.
     
    #23     Dec 15, 2017
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  4. You predicted a stock will go up in an all-time bull market and NAILED IT!? Holy crap, hedgies must be calling you off the hook. Timothy Sykes slippery pudgy little body must be shaking with fear. All hail thee! A new messiah is born!!

     
    #24     Dec 16, 2017
    SunTrader likes this.
  5. %%
    Good points; close price, in a bull market which is what we are in.And daily +monthly support matters more than a 5 minute chart[ noise]:cool:
     
    #25     Dec 18, 2017
  6. What I said applies to any time frame.
     
    #26     Dec 18, 2017
    murray t turtle likes this.
  7. %% True;
    as a practical matter most cant make a profit on noise
     
    #27     Dec 18, 2017
  8. I know I can't. Do you know anyone who can?
     
    #28     Dec 18, 2017
    murray t turtle likes this.
  9. Sprout

    Sprout

    It depends on context. What came before the bar/candle? What is the bar/candle doing in present time and from the developing context you have from all the bars/candles that precede it? What is price action attempting to do and how well is this effort playing out?

    There are 25 possibilities of what a bar/candle's form can be with a 5 tic bar (4 equal intervals). As a bar opens it is a horizontal flat line with the close. As price changes the bar changes it's form from a horizontal open handle to a high or low handle. If price does not retrace from the high or low and closes as it's furthest extreme, the body of the bar is it's dominant leg. These are 2 of the 25. If price retraces from it's extreme to a close handle then it has 2 legs. The difference between the open and close is the dominant leg. There are 6 of these types of bars - 3 dominant short, 3 dominant long.

    If price retraces from it's extreme and passes the open, this is a different type of bar. There are 12 of these. 6 of them closes on the extreme. 6 of them closes after retracing from the extreme. Both are divided equally between long and short.

    That leaves 5 bars. These are a special kind of bar where the close is equal the open. Two of these are dominant long and two are dominant short. The final bar of these five is the doji.

    In a sense the doji is the center of equilibrium and as easily as it is a beginning, it is also an ending when viewed within a larger context.

    You refer to the wicks of candles and the real body. This image is at the same time as simplifying it can also be misleading in that prior to the real body forming after the wick, the wick itself was a real body. You only know it as a wick because price retraced it's entirety. Again, as this candle was forming this (what would become a wick) looks like a real body. This real body could continue in the dominant direction. Sometimes it pulls back retracing only to surge again to make a further extreme. Other times it does the above then retraces into a reversal and changes the form of the bar from what it looked like at the beginning of the time interval to a completely different form at the end of the time interval.

    With this single bar one has 5 data points - OHLCV. By adding another bar, we get 5 more data points but also the idea of Support and Resistance come into being. Does the current bar's current price > = < any of the 5 data points of the previous bar? With these two bars the 10 cases of price and 11 volume elements can begin to be discerned.

    From a bar to bar perspective this is exact to the tick. When one zooms out and begins to compare and contrast multiple bars, then the idea of zones begin to make sense. This pattern can be applied to any timescale for each are composed of their own bars. As one goes from larger timescales to smaller faster ones, the experience is of 'looking' inside a bar becomes a desire. One can zoom in only so much for the smallest increment of change is the tick. To look inside a tick one must go to the DOM and T&S to observe the dynamic between those offering liquidity and those taking it. Those offering liquidity are the explicit resting limit orders and the implicit which are the ones not showing their hand with resting orders but re/supplying the current BbidBask pair with limit orders as the price is 'sticky' to that price level.

    The above behavior is passive, in that the priority is on a better fill price.

    By observing this level of detail, one sees that a single or group of market participant with a large order/s can lift the offer or hit the bid clearing that price level and possibly other levels with it. Sometimes this causes a domino cascade of stop orders converting to market orders adding fuel to the move. The move can be successful or fail. Other times other participants with different ideas in mind attempts to do it the other way. Sometimes this comes from market orders activated from resting limit orders that are hit. These behavior's are more aggressive in that they are prioritizing time and willing to submit market orders for this privilege as well as defend a price level they have an objective to hold.

    Back to the idea of support and resistance, value traders identify what these levels would be by the nature of their method in attention to fundamental values. They know with greater conviction for they have processed a greater degree of quality information to infer what these values are. The paradox is that these values are not well known. Those that know them we can call informed. If the values were well-known, informed traders would have no reason to trade for there would be no profit opportunity.

    The idea of signal and noise is paradoxical in that the observer is the one making this determination by judging the observed. The only way they can judge is by comparing and contrasting to what they know. To increase signal (what we can know), one increases the spectrum of differentiation that they have built up to now, this requires work.
    Another way is to go to a larger/slower timescales and use the law of averages to smooth out faster price variations. Although this is easier it does come with a cost.
     
    #29     Dec 18, 2017
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  10. %%
    Its a special situation; but market maker$ can profit off noise. I use the Market Makers Edge/Lukeman /6 month candle-charts. I remember my typing teacher in school did not seem to enjoy my ''turtle '' nickname LOL:D
     
    #30     Dec 20, 2017
    vanzandt likes this.