Below all three moving averages...now what?

Finally we have a chart using 5 min candles

I will point this out ONCE.

I frame this data (price after all, is just data points) within a specialized channel called an LRC (linear regression channel).

What you can see is that the channel contains all the price points
and that the channel is "pointed" down. You can also see where price has failed and then moved down to test support. The question is not "if" but "when" will price fail again and which of the support areas will it test first?

Now for the naysayers, I realize that the channel is a dynamic process. I realize that to some extent, this display is not the same one that you see when you are trading intraday. One has to "learn" how to see the signals, AND in the system that I use
I monitor several time frames in order to find entries and exits.

To get an idea of how this works, in past I have suggested that you can monitor 4 charts using 15 min, 5 min, 3 min and 1 min candles. If for each chart you put on an LRC showing only 30 data points, eventually you will see how the LRC can indicate some nice opportunities for trades.

Steve
 

Attachments

Steve46

You use the daily to get a sense of direction then plan your trades around that chart, and use 60 minute for timing?.

Do you use the triple screen method?

- nathan
 
Actually, I go wherever I "have to" to find a direction.
For instance, I published a chart showing the weekly candles trading in a channel over the last couple years. That gives you a sense of where we are on that time frame.

Then I move to successively shorter time frames, to the daily, then the 60 min, then the 5 min. I choose these time frames because I do not scalp. I am looking a minimum of 2 points and hopefully more (4, 6, 10). My daily goal is to make at least 10 points. I average about 6.

I use one screen divided into four charts. Once I get filled I switch to another screen that shows me market internals including the trin, tick, ticki, prem, and several volume studies.

I use pivots and S/R to "tell me" where to cash out.
 
Steve,
Thanks for sharing your work. Very helpful.

Quote from steve46:

Actually, I go wherever I "have to" to find a direction.
For instance, I published a chart showing the weekly candles trading in a channel over the last couple years. That gives you a sense of where we are on that time frame.

Then I move to successively shorter time frames, to the daily, then the 60 min, then the 5 min. I choose these time frames because I do not scalp. I am looking a minimum of 2 points and hopefully more (4, 6, 10). My daily goal is to make at least 10 points. I average about 6.

I use one screen divided into four charts. Once I get filled I switch to another screen that shows me market internals including the trin, tick, ticki, prem, and several volume studies.

I use pivots and S/R to "tell me" where to cash out.
More...
 
I trade pretty much the same way, only without the channel and without the pivots; just S/R. The end result, though, is the same. Regardless of where one plots S/R in advance, he still has to see what price does in real time when it hits, crosses, and/or hovers around the levels he's chosen.

And, yes, it's simple. But most people can't believe it's that simple. So they make it more complicated than it needs to be.
 

Attachments

Quote from darnelds:

Do any of the stock screening software programs do a good job of finding stocks or indices that are at support or resistance?
More...

No. But, again, it's not all that difficult. You do, however, have to study charts.

Just look for those price levels which have been repeatedly tested over time. Or those zones where price has consolidated or congested over time.

And remember that a swing point per se is not S/R. But if it's tested and price repeatedly recoils from it, then it becomes S/R.

Probably the easiest way to hone your skills here is to plot your S/R lines and zones ahead of time, then observe how price behaves if and when it approaches those levels. If it does nothing remarkable, then you got it wrong. On the other hand, if it does weird things in some other location, look to the left to see if there's some S/R level that you missed.

And you needn't be a realtime trader for this. If your charting program has replay, you can practice this skill any time.

And there's nothing wrong with posting your charts the night before or the morning of and soliciting comments on your S/R placements.
 
hi all,

my first post here and immediately a lot of questions <g>

steve46, if you don't mind i would like a question reagrding your linregchannels.
do you use a fixed starting date for them? and do you use always standard deviation of 2?
i have played with them from time to time but always found them very subjective.
e.g the daily downtrend in the s&p cash or future ( doesn't matter).
would you start with the LRC beginning at 5.5.06? but with s standard deviation it would not contain all price.
how do you decide how to start plotting the LRC?

many thanks for explaining

karla
 
You must log in or register to reply here.
Back
Top