Is it reasonable to say that trades around the 74 zone are high probability trades taken at the extremes?
Yes it is today's range. But trades from the 0840 to 0857 window were not based on this information. Given that 74 had acted as S in the past, I am just trying to clarify whether my big picture thinking of participating in the market during this time period was correct.
I don't understand what your thinking was. You say that 74 is/was an extreme, yet price reached 70. If 74 was an extreme, why would you go short there?
Prep work led to 74 being seen as tentative Support. Price dropping to 74 showed weakness. There was a loss of pace here as price went back and forth above and below this level. However, 74 could not create any meaningful Rev wave. Thus, once price came down below this level, the sell stop was hit, as the S of 74 now became R. Trading close to the boundary level as per the method. This short would be stopped out as strong buying came in at 70. At this point, the earlier hypothesis of 74 acting as support started taking shape again, and once 74 was re-tested, it again became Support, thus justifying the long attempts. My actual trades were tactically incorrect. So I am posting the hindsight version here: http://www.sierrachart.com/image.php?l=1379010081971.png
I disagree with your thesis. The range started out as 70 to 90. Midpoint 80. On Tuesday it dropped to 73, the top of Monday's hinge. Yesterday it dropped to 70 again, then tested 60 before coming back above 70 again. Yesterday it rose to 86, held at 80 all yesterday evening, then dropped to 74. 86 to 74. Midpoint 80. Today it's been drifting in an interior range from 86 to 74, but that doesn't change the fact that the range is between 70 and 90. Therefore, rather than short a breach of 74, waiting for a test of 70 would be more logical. Subsequently we've been flipping back and forth around 80. The extensions around this may go to 4 or 6 or 10. But if price headed toward 70, I'd be looking for a long, not a short.
This approach allows me to participate in the market without mechanical set up rules. However, with freedom comes responsibility. There are times, when price opens close to S/R, and these times call for decisive entries in a fast market. At other times, there is nothing to do until price arrives at an extreme. My poor execution over the last couple of sessions has been due to an inability to regulate my speed with the market's speed. A few days of successful trading at the open carries over to the upcoming session as an 'expectation' of movement. Even when I wait for the extremes, this 'expectation' causes me to want to get in as soon as price hits the S/R zone. I have to remind myself that there is no edge if price is not at an extreme. And if it does get to an extreme, I have to still be patient in waiting for confirmation of S/R based on the 1 min. If price opens at an extreme, I have to be decisive. A balance of patience and decisiveness is needed. I have the theory and now I need the clear thinking to execute this method correctly.
This becomes a matter of course with experience. One can have as many as several days of wide, clear swings sailing up and down and one can't rake in the money fast enough. Then comes the day when he can't wait for the market to open, chomping at the bit, and nothing. Either price just sits there, or it burps and farts up and down, never getting anywhere, stopping out even the scalpers. The frustration is enormous. But eventually one learns to expect it and even recognize it. And if he can recognize it, he's much better off taking a bike ride or mowing the lawn or cleaning out the garage.
Prediction is difficult for us for the same reason it is important: it is where objective and subject reality intersect. Distinguishing the signal from the noise requires both scientific knowledge and self knowledge: the serenity to know the things we cannot predict, the courage to predict the things we can, and the wisdom to know the difference. - the signal and the noise
FT Day 16 Sept 13 R: 3183 (High) R: 3180 (High of 12th) S: 3166/3164 (multiple low from later Thu afternoon and ON) S: 3153 (low of 11th) Context: The range of yesterday has turned into a hinge overnight. http://www.sierrachart.com/image.php?l=1379085140104.png