Another Straight Line Analysis Journal

A day late with this one

Thursday 27th Feb 2014 NQ100 1 min chart review

Pre market open

Watch for long term trend midpoint of 600 today given the failure to keep in the hourly channel

Before open, close to top of channel at 82, also mean of yesterdays high and low.


1. Opened up to 81. This was rejected and price moved up and down for a few bars, until it broke out to 84

2. Price moved up and down fast before breaking the demand line and falling to 72 the 50% of the previous up move without any decent retracement.

3. I decided that the quick fall and rejection of 50% level would be a good place for a reversal entry to go long at 75. After hitting 75 the price went up and retreated again and I scratched. Probably too quick to do this because it never got near the previous low.

4. In fact it was a retracement which could be entered long after 77. I was in the habit of waiting for the retracements before, but previous days have shown some quick reversals without retracements after rejections of certain price areas. This is one area I need to analyse over the weekend.

5. The price halted around 82 (back to the mean again), and fell after making a lower high. Long would have been exited below the swing low of 80.

6. After this I saw a dmand line break with retracement, and a possible short below 76 which triggered at 10:12

7. The price eventually bounced of the previous low. This rejection was a higher low, and was a good place for a long entry if I had spotted it, but only knew about it after it was mentioned in the chat forum. This is another area to watch for and review over the weekend.

8. The price rose to near 78, and then retraced. I noted the retracement as a place to enter a long above 78. This would have been triggered at either 10:20 or 10:24.

9. Held around 82 again, before moving up eventually to 89.

10. The demand line since 10:15 was broken and we had a retracement. A short was possible below 81.5 but this was close to another 50% level and price bounced off it quickly. It rose again to a lower high, but didn't want to short this close to 11am.


After today I have a few more areas on my list of things to watch for when analysing the behaviour of buyers and sellers. When to enter reversals,when to scratch, watching for higher lows or lower highs at possible important points. Weekend should see some improvement.
 
Friday 28th Feb 2014 NQ100 1 min chart review

Pre market open

Close to previous daily highs. Possible reversal off those highs or a move higher into the channel. Can't go up forever, can we?


1. The price moved up to previous highs on the open. There was a retracement which I saw as a possible reversal off previous high. However this was actually a retracement for the best long of the day. That was a case of predicting price rather than letting it just happen. This could have been a low risk entry if I had seen it right.

2. We moved up to 714 without stopping and then took a lower high. Because we rose in a parabolic manner and I felt we were at extreme levels. I thought a short around 710 was low risk. This failed straight away.

3. Price eventually broke out above 714 and on eventually to 722. Obviously a long could have been taken on the breakout, but again, I was unsure because price was at historical high levels.

4. Price eventually broke the demand line and made a lower high about 10:26.

I noted a short below the swing low, but would have exited when a higher high was made soon at 10:33.

5. The bar at 10:33 opened and closed lower than the previous high. This was a rejection of the high. I did not notice this at the time, and it is something to add to my list for learning. It was a good place for a short entry, if I had seen it in real time.

6. Price eventually made a double bottom near to 50% of the mornings up move. I noted a possible long at 712.


Weekend is here. Time to read, review and practise. Thanks to all who helped me this week.
 
niko said:
What would you say are your 3 top challenges at the time? I mean regarding your learning curve.
More...

Hi Niko,
I think that the first thing when learning any skill is to learn all the little individual parts well, before putting them together.
I feel that I am gettng close to that, and I have noticed that I am getting better at spoting interesting reactions of price at areas that I have deemed as important to watch.
But sometimes I am looking too close, and just seeing the leaves on the twigs of the branches. Neither trees nor woods come into it. I do things like overanalysing DL breaks etc in the middle of a trading range, where trades are relatively high risk. Motto needs to be to search for low risk/ high reward entries, or stay out.
Ultimately I'd like to go hunting for wild bears and bulls in the forest.

Challenges are:-
First, I need to re-read a lot of the material. After watch the 1 min live for a while, I find that reading some of the material again, has opened my eyes to things that I missed on the first run through.

Second, I need to define what I want to test, and get testing. Still feel like I'm in the observation mode, but optimistic that I can get there by the end of the week.

Third, I need to make sure that the easy part is actually trading this. All of the doubts should be removed before I go fishing for dollars. Since the start I have felt that exits are my big issue. When is the trade failing and when is it right to get out with profits? The suggestion of testing and trading with multple contracts, to allow flexability looks the best option at the moment.
 
Monday 3rd March 2014 NQ100 1 min chart review

Pre market open

After fridays fall we have given up most of the gains of the previous 2 weeks.
Sunday evening had opened at 77 and the price then went into a range between 54 and 72.


1. On the open the price moved quickly down to the bottom of the range. The low was rejected and price made a higher low than at 7am, indicating a possible long entry.

2. The price moved parabolicly up to the top of the range, and then on to 76. The price refused to move above the Sunday evening open of 77. It instead moved in a tight range between 72 and 77 for about half an hour. Neither buyers or sellers would give in, so we waited to see who would blink first.

3. Price eventually stayed below 72 at 10:09 for the first time since 9:37.

4. This was follow by a swift fall to the bottom of the overnight range. The parabolic up move had little resistance, because very little volume is traded at each price point on the way up.

5. The price bounced off the bottom, and gave a possible low risk entry for those who like reversals. This would have failed but a second entry was possible at 10:25 when price made a double bottom.

6. Price stalled at the mid point of the previous down move. After that we settled into the middle of the trading range, its probably not a good place to make low risk trades. Also coming close to 11am and a potential slow down in price movement.


Interesting morning, everyone was happy to play in the garden, and not venture into new territory.
 
Tuesday 4th March 2014 NQ100 1 min chart review

Previous highs around 20. Watch behaviour if we reached that high. Still hovering around the top of the long term channel.

1. At the open price moved in a range between 6 and 13.

2. Moved out of hinge up to highs of the 15 min range from the morning, and settled into a smaller range between 13 and 16.

3. Eventually the price moved up to 18 which was quickly rejected and then down to the 50% point from the open to 18.

4. Tested and rejected the previous high, and then did the same to the previous low. No clear direction apparent.

5. Finally reached 20 and on the look out for a reversal. Price rejected 20 instantly, and made a retracement with a possible short below 18. This would have been scratched.

6. The price broke downwards but couldn't reach the mid-point of the range and moved up and down to the 20 mark for nearly 1 hour.

7. The price hung around 20 for nearly 1 hour until 11:30 when it broke downwards into the previous ranges.
 
Wedensday 5th March 2014 NQ100 1 min chart review

Pre market open

We are at the top of the range again, having sat around below 722 for most of the night.

Given the position we are in a short is mostly likely, but can never tell until the money starts flowing at the open.


1. On the open the price dropped to LSL and stopped.

All the money at the open couldn't get down past that little swing low around at 19 which was 50% of the up-move since around 6am

2. Eventually price tried to beack upwards and fell back into the range again.

3. Finally, price broke out from and gave a retracement for a long above 24 which was not triggered. Instead the price rejected the high again and fell sharply.

4. The price broke through the opening lows, and gave a retracement for a short at 17. This would have been scratched.

5. We moved back up to highs again, and
stayed there for a while. This high has set a limit on price for quite a while now.

6. We had a breakout with a retracement for a possible long at 29. This wasn't triggered and we moved into a small hinge which became a range.

7. Price fell to 50% of the up-move and held. Moved back up to highs

8. Breakout from highs with retracement.

One of those days with tight ranges that don't allow low risk/reward reversals from range extremes. Also any directional moves happened fast, and generally without retracements for safe entries.
 
Thursday 6th Mar 2014

Pre market open

Here we are again at the highs of the long term channel.

Also the 15 min in a range between 30 and 35, and we are heading to the top of the range just before open.


1. We opened at all time highs then the price started to hinge, and then moved into a range from 33 to 37. It stayed in this tight range for the first half hour from the open.

2. We broke through the opening lows, and quickly down to the range low of 30. It bounced here and gave higher low. We could enter along at 32 but the previous range is small. Would prefer a short below 30 if it happens.

One thing I didn't notice at the time was that price rejected the opening lows before it fell. We could have shorted off this rejection rather than waiting for a break of the lows. This is another item for my list of mistakes not to be repeated.

3. We eventually broke below the range, and stopped at 25.

4. SL broke and depending n how close it was drawn, we could enter a long around 29.

5. Price reached the morning lows, and could not pass. Demand line was broken with retracement, but no short was triggered.

6. Now we have a rejection of morning lows,and a demand line break with retracement for a short below 32. This was halted at the previous swing low of 30.


Having watched the market for a few weeks now, I feel a lot more confident about reading what is happening with price.
Obviously I'm a long way from 100% complete. That will take more learning, testing, practise and reviewing, but I can now finally understand what people mean when they say to look at what price is telling you, rather than what you want it to do, or what indicators and levels are telling you to do.
Proper back testing comes next.
 
Hi Niko,
Honestly, I don't have it fully defined tonight.
I want to test the SLA method with the regluar SL and DL lines, but I am also aware from observation, that there are times when we should not trade. So I need to fit those into the rules.

I also see times that I would enter when particular support or resistance is broken. These grey areas need more definition, which I will try to get by writing down as much as possible and testing.

I know it isn't going to all work in one day, but I will try to refine it and improve it everyday.

If I had one big issue I would say it is exits. I have my own ideas but I will review what others are doing on them.
When to scratch needs to be tested. The scratch and re-entry would be wonderful if I can perfect it in real time.

I will do multiple contracts, since that gives more flexabilty and more information than just one contract exited on a line break.
 
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