I could not understand the chart at all. Would it be possible to summarize the essence with words instead? It would make it easier for me to understand your point that way. Thanks.
market going up is searching for sellers, then stops,down searching for buyers then stops,the 3 points ,nip ledge cleave,represent a spot where those sellers,buyers are drinking there coffee,so the original foray into this thread was a statement that you werent sure where it was going,just the direction it was headed,when making new highs these points don't exist so are useless, but while making that climb they are leaving footprints for the nip,ledge, and cleaves on the way down
2969 mean for the last 20 days,as an example,these spots would be targets if we turn negative,you could ride it to a spot where buyers were waiting in more size,skipping the chop and in and out of shorter duration trades
So if I understand this correctly, this is an example of using Volume at price to help with gauging the likelihood of price encountering S/R. Could you explain the basic dynamics of what you call a ledge?
http://www.sierrachart.com/image.php?l=1374017530435.png Price just broke out of the sideways action ON and during PM. Pressure is up. Daily trend is still up, although momentum has slowed with small range displayed over last two sessions. S: 3075 (Middle of congestion ON and PM) S: 3072 (Dip from yesterday and ON - been tested various times) 0833 The downwave from the open was turned fast and has retraced all the way back to OH. This could be indicating that there is good S underneath. So this could be the first hint that buyers have upper hand today. To 0837 The upside was rejected convincingly as well and price has retraced back to potential S - the makings of a range. 0842 although the 74.75 has held 4 times since the open, sellers are putting a lot of pressure as evidenced by the small buy wave from 0839 to 0840 in the face of the downswing. 0849 to 0851 The LH at 0849 and price falling back towards S was indicating that selling pressure was dominant. Tables reversed quickly in 2 mins and price has crossed the swing high point of 77. 0856 another indication of a lot of chop today. Price bouncing between 77 and 74. 0904 Price breaks out of range 0906 Price retraces but does not dip back inside range. So this may be an opp to get in for a ride up to the OH and the strong R shown there. 0912 important level as price is at new high. will traders use this break above old high point to get in on the ret? To 0917 nobody picked up the ball. sideways action, although the trend still up 0921 The fall finds some S at MP of smaller range. 0957 Price falling back towards S. Since no one is expressing any interest in taking price up, if there is a break below S, traders could join in wanting to create a move down. Key points: 0908 Once price broke out of the range, it retraced but the ret failed to fall back into the range, confirming a secondary level of S in addition to the 1st level created by the larger number of trades below. Seemed like a low risk bet at price busting through R on it's way to create a new high. 0958 Price finally broke through all those trades from the open. With not much interest in pursuing the upside, this made the BO important, but it did not retrace much.
i cant do what you do game so don't think for a sec that there is an air of better here,just saying that when you look at larger timeframes against your prefered,to add this in,the ledge is a spot where for what ever reason it banged against on the way up or down for a while before getting thru,this again represents a price where value was found there more often,spent more time there,the longer it spends at a price the more leftover longs or shorts remain,or it's a value correlated to another instrument a hedge ,o ranything you can imagine but likely cant prove,never the less,those leftover longs or shorts will be willing to cover there and provide a stop of the move ,which on a down move fro instance it has been bouncing in your words making lower lows,the bars dont show where that spot is so it's a valuable piece of info to add to your decision making process
Looking at this from the perspective of reducing total risk: Which situation might reduce both information and price risk simultaneously? A situation where the quality of a counter-trend move conveys information in support of the trend continuing, while at the same time offering a lower price risk entry. The caveat would be context, namely the quality of S/R surrounding both trend and counter moves. Assume that price starts trending up from a key Support level with a lot of trades around it's zone. The move finds R, stops and turns down. The retracement finds S and stops, then begins sideways action. At this point a new S zone is being created due to the transactions taking place at this HL level. The information this conveys is that traders are willing to hold at this secondary S level, the first S being the zone from which the trend move started. There are indications of buying pressure within the sideways action. A long position is taken through a buy stop in anticipation of the trend continuing up. The theoretical edge here would be valid if one assumes that: 1) The presence of the 2 S levels against only 1 R level tilts the odds in the favor of buyers. 2) The greater extent of the buy wave against the smaller sell wave tilts the odds in the favor of buyers. The risk of failure would be small because of the underlying secondary S level below the buy stop. I will observe PA with this hypothesis.