Observations (an example)

Discussion in 'Journals' started by fortydraws, Jan 13, 2015.

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  1. Gringo


    Retroactive engagement.
    #211     Feb 24, 2015
    fortydraws likes this.
  2. dbphoenix


    #213     Feb 24, 2015
  3. fortydraws


    Thank you, artemstreb. Now, no peeking everyone. Don't click that link yet!

    First, pull up a sixty minute YM chart, and do step one - Find what you would identify as the most likely immediate extremes of the YM's range prioir to today's NY session open. As you know, I prefer to find what I call the primary range, consisting of the Globex/Prior Day H/L as applicable, and a secondary range which best defines the activity of the premarket trade. That is step one.

    Now, take note of how price behaved from the open - is it trending? ranging? Above, below, or contained within the extremes of the range(s) you identified from the pre-market/overnight/prior day's trading?

    Now click on artemstreb's link and see how poorly one might trade if he or she does so without any sense of trend, range, etc.

    Thank you for sharing, artemsteb. IMO, we can learn more from mistakes, both our own and those of others, than we do from what we did correctly. Thumbs up for your humble generosity :cool:
    #214     Feb 24, 2015
  4. fortydraws


    DbPhoenix posted this in someone else's journal. I'm scrapbooking it here because I want in my journal :p

    I bolded the idea I wish to preserve.
    #215     Feb 24, 2015
    Roffe and Gringo like this.
  5. ditto ;)

    Trolls be damned. Both DB and yourself are to be commended for sharing your knowledge so generously.

    There is no way I'd be making such good progress without the two of you sharing the material you do .

    Many thanks. It is very much appreciated.
    #216     Feb 24, 2015
  6. lajax


    40D great work I really appreciate it.

    I have one doubt regarding to this post, I tried to place your trades at the chart in order to have a visual guide.

    NQ 03-15 (1 Min)  24_02_2015.png

    1)Did you see other range previous to the open? or you just take the trade at the mean of the Range (hr)? if so which was your motivation in order to take this trade, although it was located at the middle? what did you see?

    2) What is the meaning of IMO? I´ve seen this abbreviation everywhere :)
    #217     Feb 24, 2015
  7. fortydraws


    Hi lajax,

    I do not think I can explain the trade in words any better than the charts I posted. I would refer to study the chart I posted just prior to the open, the double bottom at 40 and the first failure (keeping in mind the proximity to the midpoint of the range), and then specifically try to follow price activity in the area in the red circle in the post you quote, particularly the failure to continue higher (dog didn't bark).

    IMO = in my opinion. That means that what I said is my opinion, and I don't feel like arguing about it. It is just my opinion. ;)
    #218     Feb 24, 2015
    lajax likes this.
  8. dbphoenix


    If I may, the error comes in looking at this entry as being "close to the middle of the range". However, the range that it is in the middle of is a larger, more "cosmic" range from the previous day, and that's not particularly relevant for a trading opportunity that presents itself at the beginning of the session. If all of this were taking place at a lower level, one could find a range within a range within a range, like a minnow inside a bass inside a shark inside a whale. In order to situate oneself, he must first understand what a range represents and what it's supposed to do.

    The task is to find "the" range, not "a" range, i.e., the range that is most likely to influence the open, and that of course will be the range that exists before the open. Whatever range may have existed prior to that range may become important soon after the open or perhaps not until later in the day, but it's not particularly relevant at 0930.

    40D may disagree with me on this, but here I see two separate ranges. One is from three nights ago. This provides its own opportunities day before yesterday. But two nights ago, before yesterday's open, that entire range shifts upward, and that becomes the pertinent range for yesterday's open. Whatever synergies the previous range and the subsequent range may seem to present may be pure coincidence, but they are what they are. Traders found value at a particular level three nights ago and value at a somewhat higher level two nights ago. The market is just barely trending, so it is not unexpected that these two ranges would relate to each other to at least some degree. In any case, the value that traders found prior to yesterday's open is not likely to be the same value as that which they found the night before, and for the daytrader, it is the former value that takes precedence.


    The key decision here is not whether or not the range is drawn "correctly" but whether or not it presents the trader with a framework for making a trading decision. If the range is too wide, then the trader will likely spend most of the session sitting on his hands. But if he knows where traders have found value just prior to the open, a departure from that level at or soon after the open will provide a "tell" as to where traders are most likely to go. This is why I'm not so concerned with a box that's filled with price as I am with those levels up and down beyond which traders are not willing to go (the PDH and PDL provide their own "support" and "resistance" potentials).

    There is also this post which more specifically addresses the "40" issue.

    Side note: you'll notice that 46 played an important role during the ON two nights ago and again yesterday during the NY regular session. But it also was important during last night's session and still is now.

    Something to watch.
    Last edited: Feb 25, 2015
    #219     Feb 25, 2015
    boru, lajax, fortydraws and 2 others like this.
  9. fortydraws


    A few minutes before 7:30 AM EST. I agree completely with DbPhoenix's prior post - one should not forget about activity from two or three or four days ago just because it is now today. I tried to say something along those lines recently when I said somewhere that imo price almost never makes a turn I the middle of nowhere - there is almost always a prior swing high/low, midpoint, trading range limit at the level where buyers change their minds.
    I would think that those following along might want to remind themselves that my trading chart does not necessarily have all these lines on it unless I put them there for posting purposes. These levels are, for the most part, "in my head." When I started, I drew them everyday. And every morning, I note these levels whether I physically draw a line and color them magenta and cyan and blue or not - noting the level, i.e. finding the range I'll be working with is as much a part of my routine as brushing my teeth and making my coffee and tying my shoes. But I do not necessarily draw them - though I do still draw them often enough.

    And I do keep a 30 minute chart with the NY session H/L separate and I do draw those levels with arrows. That is a reference chart, and I find it very useful to me to have a way to remind myself atr a glance where priceis relative to the prior RTH session limits. And though I use SLA line's, again, unless I am going to post or otherwise share a chart with someone else, I rarely draw support and demand lines in real time - but that does not mean I am not using the principles the lines give visual manifestations of.

    Finally, though these are the levels with "lines," don't forget that there may be other levels within the range that might prove important. 34/35 has been a level, for example, that has seen action the last few days, so though my lowest line is 27, I have 34/35 in my head as a level to work off of as well, especially if I am in a trade and price stalls and turns there rather than proceeding to my target.

    Journal 89.JPG
    #220     Feb 25, 2015
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