This chart looks like a damned pinstripe shirt - lines everywhere. As much as I said that using the lines were a bit of a hindrance, I still found myself using them. Even with the lines, this replay session felt frazzled. I couldn't get my bearings and felt like I was chasing the market. But - I did try to note every entry that would make sense to me. The open occurred with the typical big bar, but it didn't go in the direction I thought it would. Slight retrace and then LL, but with it being the open, I figured I'd get sucked into a trade that would just need to be scratched. Yes - I definitely need to just work the system and see what happens, NOT worry about what might happen. Finally got up the nerve to enter, but I was too late to the game so the trade wasn't triggered. Wasn't going to miss out on the next opportunity. The big pullback on the entry bar didn't please me, but because price had made a HH, I tried to just chill. Another HH just the next minute later and I did chill a bit. Fanned the DL after the next HHs, but after the RET the next bar seemed like it was struggling to make a HH. Price exited the DL and so did I. The RET down immediately after didn't hit. HH and what felt like strong pullback. Couldn't makes heads or tails of what was happening so I just stayed on the sidelines. After the RET with the next HH wasn't triggered, I looked for a short. Did pretty well on that one. Wasn't super sure of my SL and didn't like the bar that went outside, but it seemed like it headed back down as quickly as it had gone up so I just held tight. With not poking out of the SL and then not making another LL, when the SL was crossed, I got out. Got back in short and yet again the big pullback on the entry bar made me pause. Price tried 3 times to make a LL and then it crossed by SL. This is when I realized that the bit before was likely a hinge with the fakeout before the true movement. Got in, but late to the party and panicked. Feel pretty ok about working the simplified SLA, but wonder if I can create some additional rules for myself before exiting prematurely. For instance, around #4. If I had a general rule about when sideways movement occurs that if price didn't go below the bar that created the HH (often a sizable range bar), stay in. The good thing about doing the replay is that I get immediate feedback from myself - what works, what doesn't, what feels comfortable, etc.
I'm getting a lot of feedback that I've got to step back to the observing price stage. I do think that I rushed ahead, but it's easy to do so when a trending day comes along and you think - anyone can do this. In addition to just watching for a bit, I wanted to get some more information about what I'm looking for and what the "behind the scenes" reasoning might be. I read the 'Wyckoff and Auction Markets - the Box' document and there were quite a few nuggets of info in there that I hope to keep with me as I am a spectator. Trading Ranges are pretty important. --They're a nice lay of the land. The market doesn't always follow them, but they're a really good starting point for finding out where you are in the context of a range. Safest and generally most profitable trades are found at the extremes. --If you don't know the range, it's hard to know where the extremes are. Shows the important nature of #1. --Wait for the extremes to be met. Requires patience, but likely more success will occur with these trades and less hand-wringing. Price is either trending or balancing. --This was quite eye opening. I thought I'd relaxed a bit by more aggressive pullbacks, but I haven't. But thinking of things as moving up, down or sideways only is pretty interesting. I know it's so much more involved than this, but rather than completely fill my brain with too much information, I'm going to digest this and use it as context for price movement - especially #3.
So I had a little more fun with replay again today. No trend lines and I didn't even think about RETs or taking trades. What I did do was try to take in the recent areas of activity, draw in one SL from the overnight action and then just watch and comment. It was a lot more relaxing than wondering if my lines were drawn correctly. There's no doubt that I may have made some incorrect assumptions or marked areas that might not be all that significant. But what was good about today was that I really was just an observer. Areas of interest from the previous day/overnight: Previous Day low = 3606.75 EOD Low = 3513.00 SL drawn from 0714-0747 and extended 50% area of most recent down movement (SL area) = 3515.00 LSH = 3511.00 (this depends on my definition of a LSH, but it was a sideways area with lots of activity prior to the open and a bigger price drop) At the open, price immediately shot up and out of the SL area. Just as quickly as it had gone up, it came back down, but seemed to want to hug that area. Price popping back and forth - up and down. Price couldn't make a HH or LL. Price shot up in a parabolic fashion. Not sure if it was due to the parabolic rise or just a rejection of the 50% mark, but price quickly descended. Hesitation and pullback but sellers quickly took back control - and land in the LSH price territory. More retracing, but more support on the way down than on the way up. Overnight low test or will it bounce off? Still finding a lot of activity at 3511. Went through the overnight low, but bounced off immediately. Price again at 3511. Pause and then price shoots back up to the EOD low with immediate pullback. Following the pause, price convincingly rises to the same area just after the open. Price hangs around this level mores than 30 minutes ago. For the time being, both buyers and sellers seem to be comfortable with the "value" in this price range (14-16). Fake out or real? Tried 2 additional times to break through. Back up to the middle. Fought their way up. Quick move up and a little more forceful pullback. Another HH. Descent almost as quick as the ascent. Hesitation. Couldn't make HH and then pushed through. --The open always seems like mass chaos. Things seem so orderly in the hours leading up to it and then once 0930 hits, all hell breaks loose. The jockeying for position is fierce for a bit before one side takes the lead. --The overnight low was a bounce off point, but that could have been coincidence or perhaps 3511 was just like a magnet. --The 50% area from 0700 did seem to be a little bit of a hub of activity. --From #19 on, buyers and sellers seemed ok with a 2 steps forward, 1 step back kind of manner. But from other times of watching, when there's more support on the way up or down, that movement seems more likely to continue.
Although it sounds pretty stupid after the fact, this is one of the most important Aha moments most people have (me included) . I guess the random walk discourse helps people underestimate this important fact.
Tomorrow try to pay a little bit more attention to HLs, LHs, DTs and DBs, and include them in your review. Also think about how the concepts of REV, RET and BO intermingle with the fact that markets are either trending or ranging.
Gears as simple as that sounds understanding that you trade RETs in trends, REVs in TRs, and BOs coming out of TRs was a revelation for me. Sometimes the most obvious things are right in front of us. Good luck p.s. for what its worth I've gone back to observation on the weekends just to slow my mind down (that's just for me)
You are referring to Wyckoff and the Auction Markets: The Trend Channel and Wyckoff and Auction Markets : The Box? If so yes. I guess that's a subtle way of saying read it again boru lol
Yes. The "box" document was quite informative. The Trend Channels document helped me to better understand some of what's been discussed in chat lately - how to properly draw the lines and what I'm seeing after having done so. Thanks Db for concise and easily understandable information!