Gold, Silver, and Indexes Using Price Action

[Gringo]

It's common for new PATs to distrust tests that make a lower low. Perhaps the best way to get past it is to determine just what it is that one has to lose then either accept that or do nothing.

I have taken long entries with LL before (e.g. BBRY last year) but the S/R was clearly visible in that case. I couldn't identify a clear S/R looking to the left this time around, as there was quite a bit of mess. TC bottom was there for the taking and TC's aren't bad for entries on climaxes but I am not keen on activating my fear demons to lose the plot altogether. Although I know there are more opportunities to be had, I am going look into the price/information risk trade-off again and see whether I am keen on adding another surfing move to traverse the waves.

Showing the BBRY entry here. On second look it was an easier entry as the price did give clear retracement at least on the hourly. The daily was also solid after taking over the previous day. NQ entry yesterday was a bit tricky and at the end of the day did require the information vs. price risk leap of faith. Maybe I am dodging the real issue of accepting that risk. The bosom of a retracement does provide comfort.

Gringo

Edit: On a side note O'Neil preferred LL on DB and I had to change my thinking when I got acquainted with W. The real point though is the reaction once price dips. If demand is there it doesn't hide when pushed against the wall.

 

[dbphoenix]

Looking to the left doesn't help, tho, when trading channel limits. This is an AMT trade.

As for "fear demons", that can be addressed by determining in advance the potential loss. Then, as I said, it's a matter of accepting that or not. If one decides to accept it, there's nothing to be afraid of. If one is afraid anyway, he hasn't accepted the potential loss.

At bottom, it's a matter of not kidding oneself. There is also loss in doing nothing.

 

[Gringo]

Looking to the left doesn't help, tho, when trading channel limits. This is an AMT trade.

 

[dbphoenix]

This pattern also reminded me of the pattern formed by the LTCM business in '98. At the time, I called it a "V with handle", and the result this morning was the same. Traders decided not to go down by the close, which left two choices: sideways or up. That improves the odds considerably.

It's all about behavior. If one can't focus on the behavior and stop thinking about the money, it's not likely that he will become a successful trader, even if he buys an index on the basis of daily bars.

 

[gears]

...the result this morning was the same. Traders decided not to go down by the close, which left two choices: sideways or up. That improves the odds considerably.

It's all about behavior.

Sorry to butt in on your thread, Gringo, but this post seems to have smacked me in the face a bit. I've just gone back through the month of April and just in using the logic above about where price has or hasn't been (by EOD and the ON hours) and the remaining choices, PA shows its hand quite a bit. Granted, hindsight is always so fool proof, but this is another thing for me to use as a gauge for viewing price and trying to get a handle on where traders want to be/LOLR. Thanks Db!

 

[Gringo]

Sorry to butt in on your thread, Gringo, but this post seems to have smacked me in the face a bit. I've just gone back through the month of April and just in using the logic above about where price has or hasn't been (by EOD and the ON hours) and the remaining choices, PA shows its hand quite a bit. Granted, hindsight is always so fool proof, but this is another thing for me to use as a gauge for viewing price and trying to get a handle on where traders want to be/LOLR. Thanks Db!

The issue for me isn't in recognizing strength, it's mainly in waiting for a lower risk entry after a retracement. Not that the method is broken, it's just that under certain conditions the entries are showing up when the markets are closed. Someone using futures could have taken advantage of the entry reasonably well. Though, it wouldn't have been as price friendly as recognizing TC bottom and entering. We all have our criteria and mine will need to expand to take advantage of moves like these.

 

[Gringo]

 

[Gringo]

On the hourly the SL has been broken by price and a retracement is underway. The retracement seems to have occurred at a rapid pace when European markets opened. If price stabilizes above or around the 4380 - 4400 area and shows strength then an entry may be warranted. We are close to the double bottom around 4390. The good thing is that it's easier to see danger points and exit accordingly if things don't work out.

Daily price is also showing a hinge bottom. There's about a 50 point space between the hinge bottom and the apex. The playground is from around 4400 (if holds) to 4500 area.

Gringo

 

[dbphoenix]

I don't know that I'd call it a hinge as it isn't filled with price. Rather the fact that we're dropping below the mean of the weekly channel, the last two occasions when price reached the lower limit were six months apart, and we are now six months past the last such event, suggests that that lower limit is a reasonable target. Same thing happened with oil.

The challenge with trading interday is that if one misses the correct entry, which in this case was the failure to make a higher high at the end of May, one has so much longer to wait until there's another opportunity, each of which is likely to be riskier than if one had taken the proper entry in the first place.

 

[Gringo]

I don't know that I'd call it a hinge as it isn't filled with price. Rather the fact that we're dropping below the mean of the weekly channel, the last two occasions when price reached the lower limit were six months apart, and we are now six months past the last such event, suggests that that lower limit is a reasonable target. Same thing happened with oil.

The challenge with trading interday is that if one misses the correct entry, which in this case was the failure to make a higher high at the end of May, one has so much longer to wait until there's another opportunity, each of which is likely to be riskier than if one had taken the proper entry in the first place.

I'll make you eat your words.