Ghost of If You Can Draw A Straight Line

[jack411]

Db, regarding today, after the hinge was formed you mentioned that you saw an entry at 74 and that anything below 75 was fair game. Was it because all of those things were occurring below the apex of the hinge?

Hey Niko,
Although a hinge was formed, my reason for the short at that time was based on pre-market where price wasn't able to stay above the 80-82 area ( not visible in the snapshot you posted - a little earlier though). Then failed again after the open. So instead of a hinge I treated this more like a double top. More aggressive, but based on earlier action in that area the odds seemed to be in favor of shorts.
Just my 2 cents.

 

[dbphoenix]

2+ weeks ago I posted some "where we are" charts, before we broke 3700. Given today's events, however, it's time to post updates.

The turning radius of a major market average is not unlike that of a cruise ship. If we are in fact preparing to revisit the lower limit of this trend channel, profiting from it may not be as easy as one might expect. In the meantime, 3720 takes on added importance.

I should also point out that for the time being the upper limit of what may be a reversal trend takes precedence.

 

[yertleturtle]

I know I'm not at the entry stage yet but what is "RtTk"?

 

[dbphoenix]

I know I'm not at the entry stage yet but what is "RtTk"?

Sorry. Right Tick. I got tired of typing it out in chat. If you watch the right tick of the bar, you can generally avoid having to have a separate chart with a smaller interval, and the less there is to look at, the better. If price drops but the right tick retraces, that can be used as a legit entry in a fast-moving market since the retrace would in fact be there with a smaller-interval chart, e.g., 15s.

It's all part and parcel of watching price move.

 

[green.green]

Sorry. Right Tick. I got tired of typing it out in chat. If you watch the right tick of the bar, you can generally avoid having to have a separate chart with a smaller interval, and the less there is to look at, the better. If price drops but the right tick retraces, that can be used as a legit entry in a fast-moving market since the retrace would in fact be there with a smaller-interval chart, e.g., 15s.

It's all part and parcel of watching price move.

If I understand you are taking a visual pullback by observing the bar-close through time rather than a printed pullback and this is because in faster markets pullbacks are inherently less well-defined but still present. Is the opposite of this also true - that we should expect a well-defined pullback in a less vertical market? (I guess now that I've had this thought I can recognize that this has been my experience but I never noticed it?!)

Also - do you or anyone else know of a free source for observing a single tick chart? It isn't available in my charting package and I think it would help my thinking in situations such as the one above.

 

[dbphoenix]

If I understand you are taking a visual pullback by observing the bar-close through time rather than a printed pullback and this is because in faster markets pullbacks are inherently less well-defined but still present. Is the opposite of this also true - that we should expect a well-defined pullback in a less vertical market? (I guess now that I've had this thought I can recognize that this has been my experience but I never noticed it?!)

There is no close. All bars are comprised of ticks, completed transactions. The left tick is an actual transaction. All subsequent transactions "print" during the interval of the bar. For example, a 1m bar is comprised of all the transactions or ticks that took place during that minute. The right tick is the last tick to be printed before the next bar prints. Therefore, once the left tick prints, i.e., the bar "opens", the up and down movement which creates the bar is all the transactions that are taking place within that interval.

In a fast and driving market, the 1m bar interval is more likely to have its last tick be at the bottom of the bar even though price may have fallen, then risen almost to the top of the bar before that last fall and print. If one can catch that retracement, he can enter much sooner than he'd be able to if he were to wait for everything to calm down and provide the "bar people" an opportunity to enter on a more obvious retracement. The retracement would after all be "legit" if he were using a chart of a smaller interval. Like the falling tree, the transaction prints whether we see it or not.

One of the chief reasons for my asking people to observe a 1t chart, at least for an hour, is so that they may understand that "bars" are nothing more than a collection of ticks. This is why the obsession over a bar's "close" is so misguided.

Also - do you or anyone else know of a free source for observing a single tick chart? It isn't available in my charting package and I think it would help my thinking in situations such as the one above.

Not that I know of. However, ticks aren't printed like machine-gun fire. If you can plot a 5s bar or even a 15s bar, that should suffice, even though you may have an OHLC "bar". A tiny OHLC bar, but a bar nonetheless.

 

[boru]

I appreciate your insisting on struggling traders to observe both the tick chart and the tick on the 1 minute bar. Finally starting to understand and see price as continuous. When I started seeing price as continuous the PA itself was easier to follow. Not where I want to be but the veil is starting to part. Thank you for all your help.

 

[green.green]

Thanks for the detailed response. When I mentioned "bar close through time" I just meant the close of a 1 minute bar is ticking up and down. I know the close is an arbitrary cross-section of the continuous movement of price based on time interval. I've been trying to define "pullback" in my own trading using bar closes for backtesting purposes because thats all I have.

I don't have anything faster than a minute but this one I get.

 

[dbphoenix]

I appreciate your insisting on struggling traders to observe both the tick chart and the tick on the 1 minute bar. Finally starting to understand and see price as continuous. When I started seeing price as continuous the PA itself was easier to follow. Not where I want to be but the veil is starting to part. Thank you for all your help.

It's a biggie, and even the gurus don't get it, nor does anyone else who claims that anything below a *m bar is "noise". There is no such thing as noise; it's just a question of how big a bundle of ticks one wants to look at.

This is why those who claim to be "trading price" and are really trading bars annoy me so much. If a beginner wants to trade bars, great. God knows there are plenty of "systems" out there that do that. But if he wants to trade price, then he needs to follow price, not bars. And I don't know anybody that teaches that. Hell, I can't think of more than a couple of people who understand it, at least over the past six or seven decades.

 

[niko]

Thanks for the detailed response. When I mentioned "bar close through time" I just meant the close of a 1 minute bar is ticking up and down. I know the close is an arbitrary cross-section of the continuous movement of price based on time interval. I've been trying to define "pullback" in my own trading using bar closes for backtesting purposes because thats all I have.

I don't have anything faster than a minute but this one I get.

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