Regarding the above on the importance of context, I wonder if those who do not bother with context would understand why we have been repeatedly bumping up against 81. One who was aware of the May/June trend would know that 81 represents the top of that trend channel. Whether knowing and understanding this would help him or not is another matter, but at least it would help him determine where to look for high-probability trades, as opposed to the low-probability trades one becomes involved in when he is unaware of context. Further, one might also understand that the higher high and higher low printed earlier during the session implies a trend. He would then plot a line across the opening swing high and the subsequent swing high ten minutes later. He'd then copy this line and plot it below the swing lows at 73 and 75 (+/-). Doing so would show him that price is in a channel angling upward. Knowing this would also provide him with higher probability entries than usual (as I write this, price is approaching the juncture of the intraday channel just mentioned and the upper limit of the daily trend channel; assuming a steady angle of ascent, this will occur at around 85).
And here we are. What will the trader do if we break through the daily trend channel? What will he do if price can't break through and instead reverses? If he didn't know the context, would he see the potential short op here (key word being "potential")? Edit: No shorting ops yet, though we appear to be breaking the upper limit of the daily trend channel (which will take more than just a couple of points). Therefore there's no reason yet not to stay long, assuming that one bought the test of 74. And while providing a play by play might be interesting to some, it's outside the subject of this journal and I don't want to hijack it. Those who've been following the journal know what the conditions are for a short. The point of these last few posts has been to illustrate the importance of context. That's been done.
You mean the test of 79? Did I draw the daily level correctly? The dashed one is what I thought was the 60M hinge, which was tested on the first retrace after the opening push up. The second test was at the premarket resistance (now support), the third was the smal hinge apex level which was forming on the 1M. I took the two last ones, but was taken out quickly on the second, but was able to manage the third a bit better...
It's 74 on the September contract. As to the rest of your questions, this is isn't my journal; it's game's. Therefore I suggest that you open up one of your own and transfer all of this to the new one. Or open up a new thread somewhere, maybe Trading.
Day 8 of 20 Prep: Prep: Price in middle of Trend channel on the daily. Daily trend is down, although price is well above the low printed on the 13th, indicating short term strength. S1: 2952 (S from 13th night to 14th morning) S2: 2947 (last swing low from PM) S3: 2935 (S from 14th) R: 2969 (Overnight R) R: 2973 (from 12th) R: 2980 (from 11th) Price breaks congestion at midnight and makes high of 69, then retraces and consolidates at 62. Buying from the lows of the 13th led to a standard sell off. But this downwave from the 14th found strong Support at 2935. So this, in combination with the overnight break from congestion points to upcoming buying pressure during this session. Main S level is 2935 and main R level is 2969. http://www.sierrachart.com/image.php?l=1371581648132.png
Try to avoid trading on such a "micro" level with regard to price movement. One could argue that a bar that has a higher high and a higher low than the previous one is an "uptrend" (and the opposite a "downtrend"), but if you trade accordingly, you won't be in any trade for more than a few minutes, if that. Buyers and sellers are narrowing their focus toward 62 premkt via higher lows and lower highs. Since you've determined that pressure is on the buyside, go with that and buy the first retracement at "0837". Once you do, there's no reason to exit until your trading session is over given that price continues to make higher highs and higher lows. If you find it difficult to see this, draw a line underneath the swing lows beginning with the open. Such a line will not be broken during your trading session.
Prep: Price at trend channel boundary. The 30 point sell off on the afternoon of the 17th was stopped and price found value at 2970. Has been in an overnight and pre-market TR between 76 and 67. R1: 2975 (from pre-market) R2: 2983 (from 17th) R3: 2997 (from 10th) S1: 2967 (from pre-market) S2: 2954 (from 17th) S3: 2936 (from 14th) Price is still in an uptrend since the lows of the 13th. But with yesterday's afternoon sell off the pace has reduced, even though buying has a slight advantage at this point. Anticipating a range between 83 and 52, with a smaller initial range between 76 and 67. http://www.sierrachart.com/image.php?l=1371599386665.png
This has been difficult so far - basing trades on the larger context but observing real time movement to anticipate. Too much attachment to perceived context leads to bias, while too much attachment to real time movement leads to over-trading.