Nice work Niko! At last some light at the end of the tunnel. Did you exit and reverse at the same time, when you went short the second time? With few contracts it's quite possible I guess. One needs to have the alertness to do it though. As long as you are reading price better things should start to fall into place eventually. Gringo
I was just coming by to ask "who else got themselves short this morning?" So its you and me, DbPhoneix I've been watching that channel for weeks and weeks, if not months (thanks to you, of course). I know its been mentioned here or the other thread if not both of them. I had that sell order loaded at the open - only had to wait about half an hour to get it.
Yes the thinking there was that if I was wrong on the change of direction I could be in a RET from the previous downtrend so I took the short It did not work either, so I was in the chop. Then the HH was what made possible for me to call it a TC, that was broken and then the next short was the first RET after, after 11:00 just looked for an exit. No more entries.
Your last short at 1102 was a good trend continuation entry. I realize you exited the trade because of the cross of DS line and due to the late hour. However, why not consider your last short of the day as a 'free' option bet on trend continuation? The major trend is down. You are well positioned to ride it. So let it go on. Set a trailing stop if you absolutely have to leave the session. But it does not make sense to exit a position when the odds for a further fall are heavily in your favor.
Perhaps we are having a mis-communication of some sort. Trend channels are essentially long-standing supply or demand which price frequently reverts to. If value is found too far elsewhere, and consistently, on other levels, the channels disintegrate and new ones are formed. Draw a demand line starting from 3180 on 10/10, where the initial force of the buying pressure which occurs to break the free-fall from 3200+ stabilizes into a sustained upward movement. Price hits and finds support at the right trend line about 6-9 times depending on how picky you want to be. The left trend line primarily serves as a measure of how far price tends to stray, or how far it is capable of straying from the base support of the movement over time, at least for me. The demand line from yesterday which I traced from 3350 to 3368 (which I assume you are referring to as a trend line?) was successfully tested twice during the open before price made two new high's, almost to the exact point. There are definitely additional factors that I missed in understanding the importance of that level, but the demand line was definitely valid. If you're talking about the small channels that I made on my chart for the open, then I do that merely as a way to track the tempo of price's movement in accordance to the base Demand or Supply Line. For example, during the down-move, the slope of the decline became sharper just before it touched down to support around 3378. This is demonstrated by it falling slightly out of the bounds of my left channel line (light purple). It seemed apparent to me that the strength and intensity of the down-move likely wasn't increasing, but rather it was just a slight over-eagerness of the sellers to reach 3378 a little quicker as it began to appear in their sights. Hence, an over-extension. I didn't intend to imply that the light purple line provided any resistance, but it is merely a way for me to better understand the current price behavior. I don't claim to make authoritative statements about the validity of using these concepts to anyone, but they are merely tools I use as I have seen them play out time and again over the course of my observations and study. --- Also, on a side note, I took and annotated your chart for the day. It is quite amusing to see us both learning the same material, but reacting to it in such different ways. Not that either is right or wrong, but its just interesting to see your personality and personal touch at work, especially when it is so different than mine. Always a pleasure.
@game as well Interesting, you are seeing a long-term short much earlier than I am. Can you elaborate on what you're looking at? I must be missing something. I've been looking for a break and subsequent RET below ~3330 last afternoon, and below ~3355 today to short. Demand seems to beginning to show cracks, so it only feels like a matter of time until I'm in, but I would be very interested in learning how to see openings into situations like this earlier than I'm currently capable of.
Actually, they're not, but I've gone into this many times over the years and don't want to spend a lot of time on it. Suffice it to say that you're throwing virgins into the volcano. The "trend channel" represents deviations from a mean, the mean of the diagonal trading range. Therefore, the limits of the channel represent only an approximation of the extent of these deviations, which is why the channel is "broken" so regularly. They cannot provide S&R the same way that S&R lines can in a lateral trading range because the limits are moving every moment of the period in which the trend exists.
Thanks for your comments, I was just pointing out something that has come up several times during the course of this thread and previous ones in TL. The lines at the end are part of the mental construct of the trader, therefore they are not by definition Support or Resistance as they don't represent past trades. As for the rest of your analysis, thanks, you obviously have a better understanding of price than me, I am learning lots of things from you.
Actually I'm not anything until the daily demand line is broken. But then I'm in the middle of remodeling the kitchen, so the intraday stuff is at the bottom of my list once it gets light enough to work.
Given that strong trends often have a lot of back and forth before eventually changing direction, would you wait for the first Reversal wave to attempt some kind of re-test before putting on the short or would it be a V Reversal bet? This is for the short on the Daily.