trading range AND breakout!

Discussion in 'Trading' started by thunderinvalley, Jun 25, 2006.

  1. Okay and here is the same data using 15 min candles

    I think the chart is pretty self explanatory.

    You have an initial move down (fake out) and all the retail trade bites on this hook.

    Then the countermove as the maket washes them out. They cover their shorts and are "stranded" as the market "fails" and the shorts take it down through resistance on a Wide Range Bar.
     
    #11     Jun 25, 2006
  2. Last chart using 5 min candles

    Just a closer look at the action. What most retail and newbies are looking at as they trade.

    If you notice where we ended up, you can see that (as often happens with indexes) price cycles back to the area of the open

    The LRC in these charts is sized to 2 standard deviations. On this 5 min chart the move down starts right below 1261. Using my own system, I figured that trade had an 83% chance of success.

    Welcome to summer trading newbies (and retail of course, you guys are always welcome).

    Steve

    :)
     
    #12     Jun 25, 2006
  3. So a couple of things relating to the subjec of the thread.

    First it is obvious you need a context in which to operate.

    Second, you have to decide on an appropriate range from which to breakout

    Third, you have to remember that this is summer season. So the market is going to behave differently.
     
    #13     Jun 25, 2006
  4. K-Rock

    K-Rock

    Steve46,

    Nice charts! I agree 100%. That's why it's important to look at multiple timeframes; however, if you find yourself in a trap reverse or get out before it's too late.
     
    #14     Jun 25, 2006
  5. Thanks, my good deed for the day.

    Just trying to see if we can get Marketsurfer (and his alias "Thunder in my shorts") into the black. Otherwise we will have to endure more book sales and charity auctions lol.

    Good luck everyone on Monday and throughout the summer.

    Steve
     
    #15     Jun 25, 2006
  6. Cheese

    Cheese

    Is there a trend? If so what is it .. up or down? And what length of trend do you mean .. 5minutes, 5 bars, 5hours, 5days? Of course if you want a perception of temporary direction anybody can consult a SMA if put on your live chart.

    Then there is when is it a range and when is it a trend? Its a range when its not trend and its trend when its not a range? Oh yeah really helpful. But why search for what is not needed.

    If you enter an upmove at the bottom you can ride it to the top (egYM) .. that could be 15, 25, 50 or whatever points. And of course you should have developed recognition or a methodology for identifying your entry & exit. The exit can also be your reverse and re-entry. Upmove halts and you now follow down ensuing downmove. These are just gyrations that make up the days trading (eg YM).

    Of course there is a lot lot more detail to this. But you have to begin where you can start a logical understanding of the market and then attempt to make progress. There is not a quick fix available.
    :)
     
    #16     Jun 25, 2006
  7. ======================

    RE; re read

    Thunder in Valley;
    Cash or derivative markets, like ES , good study-rereads includes
    How To Make Money in Stocks., by William O Neil
    & 3 top trader books by Jack Schwager books help much.

    3 years or 13 years chart watching can help;
    wisdom is profitable to direct.

    Not a prediction just higher probabilities.

    :cool:
     
    #17     Jun 25, 2006
  8. Trading is just a probability game anyway.
    Who can switch the probability in its favour, with proper money and risk management, you will be the king of the market. :D :D :D
     
    #18     Jun 25, 2006
  9. steve46, thanks for your charts although I haven't traded this market yet! :)
     
    #19     Jun 25, 2006
  10. Pabst

    Pabst

    Thanks for the charts. However Steve, although the market had extremely similar price action in both the 9:30-10:30 EDT move and the 11:40-12:25 rally, the first rotation was for 7.25 points but the second rally produced a 10.50pt rally. I was looking for a 10pt rally first and THEN a secondary rally that would be about .6185 of the first leg. (6.25pts or so). I'm not beefing, I still took out 3pts net in the long campaign (I made 20 trades from pre-open to 12:10 EDT 19 were longs) but my day would have been about three times better if the magnitude of each rally had been reversed. I realize much of this is random, i.e. there were more weak longs around off the open then after the flush back down to 53.50 and then higher, but I guess I'm saying is I don't believe there's a quantitative method of deciphering likely magnification.
     
    #20     Jun 25, 2006