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Hey all you price predictors: when is a pullback gonna come?
- Thread starter 1a2b3cppp
- Start date
Quote from 1a2b3cppp:
When price touched that trendline, you knew it was going to go back up as opposed to chopping around the trendline or going below the trendline?
It's all probabilities man. It's all you've got as a trader. Nobody ever "knows". If you were not going to try a long there, where were you? This has got to be what the hallowed 5% great traders do.. see good probability, bet immediately while the rest of us (me anyway) wait to "know".
A friend I know always reads the news and says "It bounced there because of news!!". I say really?? Maybe news was released in anticipation ("THEY" see the very same charts")?? Besides, there is ALWAYS something in the news to explain ANYTHING.
Quote from 1a2b3cppp:
When price touched that trendline, you knew it was going to go back up as opposed to chopping around the trendline or going below the trendline?
We are in an uptrend, hitting the TL first at the 33-35 area, not yet made a new high, coming back to the TL. So yea, the TL acting as a support with other confluence (not marked on the chart) was a good probability.
Now, regarding exact touch vs bend/chop/go below, you see the 33-35 test and see how it chopped around a bit, ate as many retail stops as possible and finally took off? Now that is to be expected as well and we as traders have to be prepared to handle it. For me, this area was THE long, not the test later which held.
Lastly, TL by itself isn't as powerful as TL + confluence (S/R, channel, flag, etc)
And the poster above is right. Look for high probable setups and take your shot instead of waiting to know for sure what price is going to do.
You're absolutely right. You have to recognize the greater trend and go with that move. Anything else counter to the greater trend is an opportunity for entry, i.e. - buy on pullbacks when trend is up / short on bounces when trend is down (which is currently not the case). Remember too, that TL's can be violated for any number of reasons. HFT's, large paniced orders or whatever the reason (which there are so much more of than you realize) can take anything momentarily through resistance and trendlines. As a trader you have to gauge the reaction (sentiment) of the index / single name / whatever after that happens. That's trading.
Regarding news, realize that you are trading reactions to news as opposed to trading the news itself. When we are not in overbought situations good news and bad news is bought. When we are overbought good and bad news is sold. Again, that's trading.
Going back to my explanation of liquidity driving markets the other week, add Japan to that list as they announced a $130b QE program yesterday. Their goal is exactly like others flooding the world with liquidity - to create inflation. Like everyone else they want to blow another bubble and inflate their way out of economic duldrums. Will it fix their economy? Of course not, but you must realize there is now another flood of cheap money available and another flood of risk taking to come.
Regarding news, realize that you are trading reactions to news as opposed to trading the news itself. When we are not in overbought situations good news and bad news is bought. When we are overbought good and bad news is sold. Again, that's trading.
Going back to my explanation of liquidity driving markets the other week, add Japan to that list as they announced a $130b QE program yesterday. Their goal is exactly like others flooding the world with liquidity - to create inflation. Like everyone else they want to blow another bubble and inflate their way out of economic duldrums. Will it fix their economy? Of course not, but you must realize there is now another flood of cheap money available and another flood of risk taking to come.
To determine trend, just see if the chart is going from, as Denis Gartman loves to term, 'the upper left to lower right' or 'lower left to upper right.'
You'll have to take your trade time frame and zoom out. So daytraders who trade by the 1 min charts have a downtrend today in the SPY, for example. The chart clearly goes from the upper left to the lower right. Zoom out to the 10 min chart and it looks virtually trendless, but you'll see the downtrend has run into possible resistance on yesterday's low with another potential level of support not much further off on Friday's lows. Zoom out to the 30 and 60 min charts and you'll see there is a clear 'lower left to upper right' moving chart. Skipping all the way to the monthly chart you'll see we're near the '07 highs, but if you trade on a 1, 5, 10 etc minute time frame, are you going to start shorting now even though that resistance is 80 or so points away? I'm trying not to get long winded here, but determine the trend on the 60min, daily and weekly charts, then zoom out to make sure your trend isn't going to run into a long term resistance.
Looking back on prior posts, I sound market bullish. Does that mean I believe all is hunky dory in the world? Of course not. In fact, I am a huge bear when it comes to the macro economic situation. The US is not recovering jobs, despite the BLS. Just look at the tax receipts - they may be up, but are they still up if you adjusted for the local increases? Housing is a mess, shadow inventory is not reported, banks are not marking to market, etc. Japan is still now into its 3rd lost decade and reaching over 200% debt to GDP. China, who's real estate market is about to monumentally collapse, is now suffering from the European recession as they are China's number 2 customer. That will lead to reduced demand for resources, so Australia (another housing collapse victim) will suffer as well as Canada.
BUT, all that news matters when it matters. We are not here to trade our opinions. That is what is going to separate those who make it from those who either spin their wheels for years getting flat pnl or, even worse, those who bomb out.
You'll have to take your trade time frame and zoom out. So daytraders who trade by the 1 min charts have a downtrend today in the SPY, for example. The chart clearly goes from the upper left to the lower right. Zoom out to the 10 min chart and it looks virtually trendless, but you'll see the downtrend has run into possible resistance on yesterday's low with another potential level of support not much further off on Friday's lows. Zoom out to the 30 and 60 min charts and you'll see there is a clear 'lower left to upper right' moving chart. Skipping all the way to the monthly chart you'll see we're near the '07 highs, but if you trade on a 1, 5, 10 etc minute time frame, are you going to start shorting now even though that resistance is 80 or so points away? I'm trying not to get long winded here, but determine the trend on the 60min, daily and weekly charts, then zoom out to make sure your trend isn't going to run into a long term resistance.
Looking back on prior posts, I sound market bullish. Does that mean I believe all is hunky dory in the world? Of course not. In fact, I am a huge bear when it comes to the macro economic situation. The US is not recovering jobs, despite the BLS. Just look at the tax receipts - they may be up, but are they still up if you adjusted for the local increases? Housing is a mess, shadow inventory is not reported, banks are not marking to market, etc. Japan is still now into its 3rd lost decade and reaching over 200% debt to GDP. China, who's real estate market is about to monumentally collapse, is now suffering from the European recession as they are China's number 2 customer. That will lead to reduced demand for resources, so Australia (another housing collapse victim) will suffer as well as Canada.
BUT, all that news matters when it matters. We are not here to trade our opinions. That is what is going to separate those who make it from those who either spin their wheels for years getting flat pnl or, even worse, those who bomb out.