In Lao Tzu's Dao De Ching, his philosophy in both life and government prefers inactivity, non-coerciveness and self-lessness. These attitudes will naturally align oneself with the path of least resistance and approach the way of nature: 1) Inactivity. Non-trading is what makes trading functional. Without waiting for the good trades, the profits of the good trades will be squandered by taking marginal trades and commissions. Like the space inside an empty container, it is the non-entity or nothingness that makes the entity functional. 2) Non-coercive trading. Stiffness and being tough are signs of death, just like a corpse, or dry branches. Yielding and being soft are signs of life just like a living person and a life plant. Water goes to the low places and compromises with the surroundings without ego yet it can penetrate rocks and surround mountains over time. These are evidence that softness is superior to hardness. Detect the true rhythm of the market and don't fight it. It takes skill and conviction, and being too "soft" may result in "stop and reverse" trading, which leads to poor entry and an emotional roller coaster, turning the small winning edge into sh*t. It's better to stay out when the rhythm is not clear because the market IS random when she tries to gather energy by luring opinionated participants with her dance. 3) Self-less trading. Retire your ambitions and trade without agenda. Chasing some number in the head will start chaos in one's performance and one will deviate from the way of nature. Don't make yourself walking on wire. Have both feet on the ground. This is age-old life philosophy applied to trading. I hope these will help us in life, too, and make us better persons to others. Good trading. Martys
Well, things have been relatively quiet with Silver. Much more exciting to see most of the major US indicies pressure the bottom of their channels. It is still difficult for me to draw out a solid hypothesis on what the next decent size move of Silver could look like, but I am attempting to keep a close eye on all of the factors affecting it in order to continue learning. Another annotated chart is attached. It seems like it will be forced into a decision of sort in the next two weeks at the latest. Whatever the outcome, I hope that it will benefit me in understanding how to prioritize the strength of the various factors that I can observe which are currently acting upon the price. I think this is currently my biggest obstacle to correctly entering shorter-term positions than I am used to. I am much more comfortable interacting with longer-standing Support and Resistance, which seem to be much stronger and more reliable than those on on the smaller time scale. For example, I feel slightly foolish looking at the NQ chart for yesterday. I incorrectly gauged the strength of the TC Midpoint Resistance around 48/50 in relation to the pressure coming from the long-term upward direction of the NQ, along with it being in the bottom half of its long-standing channel, so I was looking for long entries. I took a break-even long at the open, and two small losers at the Hinge Midpoint and yesterday's OL. I was unable to shift my focus rapidly enough to get on the obvious ride back down to the bottom of the channel. I was satisfied with the day though, it was a learning experience. Working on shorter time-frames, and especially trading the open yesterday is definitely prompting some growth in my understanding of Price Action. The good news is that I was able to make a fairly large long with an entry that I feel pretty comfortable with on the YM, and it's looking good so far. I intend to be holding it for a while unless something unexpected happens.
There was a small RET after the hinge BO. Has anyone else noticed that the posting time of our comments to be posted 5 mins earlier than we actually post. I could seriously become a hindsight trader with a perfect record using this time difference. Heck I would even catch the small ups and down with such a time lag. Or is that the time shown is of the time we start writing the comments? Gringo
One of the ways of cheating with regard to "real time" and another reason why posting trades in advance has more currency than the so-called "real time" postings.
I would point out a few things regarding the price action. One is to pay less attention to the diagonal lines and more to the support/resistance lines. That would clear your mind and also make you understand that once an s/r is cracked it's not too prudent to keep paying attention to the imaginary line in one's head. The price did something at s/r and it's time to use that information for trading. Second thing is that just because price goes up and comes down doesn't mean it's a hinge. I am referring to your 'strange' looking hinge comment. A hinge has either price coiling like a tornado or moving quite tightly. It's not roaming around and just happen to have a lower high and a higher low that makes a hinge. Now in a larger bar interval or wide enough time frame that might eventually turn into a hinge but not for the purposes of trading currently. Your supply line and the bottom demand line are sufficient enough to give an indication when price changes its stride. Ok. I better get back to having breakfast. Gringo
Actually we're well above the mean of the long-term channel and very near the top. But that doesn't mean clear sailing for longs.
Gringo and DB, Thank you for taking the time to point out the errors I have in my understanding. I am very grateful for the time and effort that you both take to explain and expand upon the concepts in this discussion. I will take your advice and fade the boundaries from my mind after price interacts dynamically with one of them. I think that this will yield a much different decision making process for me. Upon reading your comment, I surmise that I have been going about my understanding in an incorrect manner; I have been observing these boundaries as a set arena which I expect price to play within. I feel as if I have been vaguely perceiving this false method of the internal information overlay that I create in my mind, in referencing my confusion as to the relevant strength of these short term boundaries. I will think of the price interaction with these boundaries as more of an alert to begin to enter my mind into the flow of price movement instead of staying immobile on the large perspective with these lines still intact, and using my magnifying glass to find decent entries near the edges of my lines, and using stops outside of them. It is a much more organic approach than the current framework I am operating in, and appears to have much more potential. Can you elaborate further on the difference in function between diagonal trend/directional/consolidation lines, and to the fixed points of Support and Resistance that we perceive? You begin with diagonals to get a general sense of influence on price, identify points of Support and Resistance, and then what is the following process that occurs in your mind? It is this process in my own mind that seems to need modification. Also, thank you for clarifying to me the incorrect usage of the hinge. I feel as if I was partly correct in making the statement that this structure will force price to a decision soon, which will create increased movement, which is similar to what I've read and perceived happen with the classical hinges that you've referenced. I knew the lines on the SI chart weren't the standard hinge, so I referred to it as a vague one. Can you use this opportunity to inform me of any additional implications that the real hinge is capable of, as opposed to this false hinge that I have referred to? Lastly, I've attached a chart with the largest scale lines that I had been factoring into my analysis of the opening price movements in the NQ yesterday. It seems that this blatant misjudging of the long standing trend channel was the primary factor which caused me to fail to perceive the clear strength of the Resistance and subsequent downward pressure on the movement throughout the day. Thank you for your correspondence.