House of If You Can Draw A Straight Line

[dbphoenix]

Imo, much of the difficulty people seem to have, not simply with SLA/AMT, but trading in general, is that most have not spent the time necessary to feel comfortable and knowledgeable enough to have any confidence whatsoever in the decisions they are going to have to make when trading, because they really have no clue as to how the market tends to behave.

This bears repeating.

I posted these charts as I did, without reference to potential entries, exits, stops, targets, whatever, to show (again) what the purpose of observation is. If for example one doesn't know what a failure looks like, much less what the relative importance/unimportance is of a failure depending on where it takes place, then he will be missing out on quite a few profit opportunities.

The only people I know who have done proper observations and who are posting publicly are Gringo and 40D. One can either run with that or let it lie.

 

[dbphoenix]

40,

Have you thought about starting a journal? You seem to trade more on s/r and I am sure you would have many followers.

Unfortunately, he attracts the wrong kind of followers.

 

[dbphoenix]

If it goes up, buy. If it goes down, shorts.

If it's that simple, everyone ought to be playing it correctly and the success rate should be 100%. Instead, that's close to the failure rate.

 

[fortydraws]

If this were nearly anytime but Friday this close to the close, I'd be looking for another move lower from here if price nibbles through the midpoint of the afternoon hinge.

EDIT: The midpoint of the rally from LOD to the afternoon high happens to be 4204.75, I believe.

EDIT 4:04: She could .... go .... all... the .... way

 

[fortydraws]

If this were nearly anytime but Friday this close to the close, I'd be looking for another move lower from here if price nibbles through the midpoint of the afternoon hinge.

EDIT: The midpoint of the rally from LOD to the afternoon high happens to be 4204.75, I believe.

EDIT 4:04: She could .... go .... all... the .... way

Time ran out, but it was a good effort. I'll post a chart later with some notes about today's activity that I think would be worth ... ... noting.

 

[dbphoenix]

I posted these charts as I did, without reference to potential entries, exits, stops, targets, whatever, to show (again) what the purpose of observation is. If for example one doesn't know what a failure looks like, much less what the relative importance/unimportance is of a failure depending on where it takes place, then he will be missing out on quite a few profit opportunities.

I'm going to finish out the day by plotting 50% levels, for reasons which will become clear once I've posted the charts.

In keeping with the post I quoted above, I make no recommendations with regard to entries, exits, or any of the rest of it. I'm merely pointing out a phenomenon that Wyckoff apparently "discovered" as a result of his work on price behavior, put simply, that if price can't retrace at least 50% of a decline (or retrace it but be unable to hold it), then demand is weak. This doesn't forecast a decline, but price will at least drift sideways. The opposite applies to retracements of an uptrend.

So. The first decline. One can plot the halfway level as soon as price has reversed (one will have plenty of time). This is "foresight trading", not much different from forecasting the bounces off this trend channel's limits over the past few months.

Note that price makes it through the halfway level, but can't hold it.

Here, it falls to the halfway level and bounces off, suggesting strength. However, price just indicated weakness. So one can reasonably expect at least some balancing, or seeking equilibrium.

And price settles in to the halfway level of the last decline. Moves above and below this are practically equidistant until 1500.

Again, what any given trader does with all this, if anything, is up to him. But none of this is happenstance.

 

[dbphoenix]

And since it's Friday . . .

 

[Eddiemorra]

And since it's Friday . . .

View attachment 148022

Is it gonna go down to touch the lower trend channel next? Is that your bet?

 

[dbphoenix]

Is it gonna go down to touch the lower trend channel next? Is that your bet?

No bet. According to AMT, it'll reach the upper limit or at least the last swing high first. If it doesn't, and one knows how to play a reversal, he can take the appropriate action at the appropriate time.

If you're interested, I suggest you read the material. If you're not interested, then perhaps you could post an explanation somewhere of how and why you took your oil trade and how you managed/are managing it.

 

[dbphoenix]

As long as I posted these charts, I'll point out again for the benefit of those who happen to stumble across today's posts here that there are at least three kinds of analysis required for this. Two of them are hindsight. One is foresight.

To begin, one must observe. If he doesn't observe, he'll never understand what it is he's looking at. If he doesn't understand what he's looking at, he can't trade it. Therefore, one studies static charts in order to develop hypotheses -- or what-ifs -- regarding what he sees: why did price go up there? why did it stop going up there? why did it reverse? why was this reversal a dud and that last one was a success? Once he has something he wants to test, he shifts to replay, which is of course also old charts, and eventually begins developing a trading plan.

The second type of hindsight analysis is the daily review: what did I do wrong? what did I do right? what could I have done differently? This is not the sort of self-pitying couldawouldashoulda engaged in practically every day by those who have no trading plan. The purpose of it is to determine whether or not one followed his plan, and, if so, what the results were. Did he follow his plan and make losing trades anyway? Then modifications may be in order unless the losing trades were nothing more than the victims of probability. Did he follow his plan and make winning trades? A gold star. But even there, perhaps the trades could have been managed just a little bit better.

The third type is foresight (or prediction, forecasting, expecting, whatever). Once one knows the probabilities of what price may do under certain sets of circumstances, he can then anticipate certain behaviors at certain times at certain places, which to a large extent is the point of posting today's charts. As much as possible, this is done before the open, which is the reason why I've been posting the pre-open ranges. If this is not done, then the day becomes a guessing game, a jump right in and hope for the best kind of day. And if this is really what one wants to do, then who is to say that he shouldn't? or can't? Though he'd probably enjoy his money a lot more by scooping it all into a big pile and setting it on fire.