House of If You Can Draw A Straight Line

[Gamera]

Thanks for your detailed response, sorry about the chart I was talking NY times but the chart time was on Chicago.

You'll see that my first range was off the hourly, with an upper limit of 20. What matters more than whether price reaches it or exceeds it is how price behaves while it's approaching it and how it behaves around it, particularly if it does exceed it.

I was aware of 4220 as an area of interest thanks to you pre open post, but as the PA unfolded around this level I lost track of the meaning of this in terms of the range context. Whilst the 9:58 LH failure and move lower is within the context of the range 4220-4200 if I were short, the rally off 4214 would have closed me out. Am I putting too much emphasis on the PM high being a sticking point? even though price reacts close to this level and rallies, the subsequent rally results in another LH and failure at 10:20.

Therefore, until I understand what price is telling me to do -- as opposed to its telling me what not to do -- I do nothing.

I'm increasingly trying to move away from taking trades at a predefined level just because its there. As you point out what is important is how price approaches, how it behaves around these areas and what it does if it exceeds it.
I often find price displaying the behaviour I am looking for a few points shy of a level, or a few points beyond a level, whilst taking trades with behaviour at a level is less of a problem, I find myself being fixated with a particular level enough to hesitate taking a trade when the PA dictates.
When I am in a trade that is going well, I often exit as price chokes on one of these predefined levels even though there is no reason too, I am not paying attention to the price. This is a work in progress and whilst I am moving my focus from these levels and more to the behaviour around these levels it is a change that seems to be bearing fruit.

the retracements wouldn't be so deep, there wouldn't be so many overlapping bars, and price wouldn't have to be pushing so hard in order to make so little headway.

The above quote struck me as relevant given what happened today once price left the hinge and interacted with the previous days high at 32.

TBH I got stuck on this, after the break lower price returned and consolidated on the apex a slight break higher got me in, I was stopped out quick then sat out and re-read the SLA-AMT hinge section, realised I was over zealous in my thoughts.

There were a number of things I was watching at this time, 4232 for obvious reasons, Fridays highs to Mondays low MP at 4235 and the apex of the hinge 4238-9 in the immediate area. On the upside PM/ON high and the area you posted regarding an earlier area of equilibrium, and to a larger extent the daily SL coming in at around 4280ish. Am I looking at too many things?

Price trended down but made little progress for all the effort, the final drop at 10:44 was 14 points in 6 minutes, would it be an over exaggeration to suggest this is climactic? And is the retrace at 10:52 something to be interested in given the proximity of the apex?

I'm waffling now so I will end it here, thanks again for your insight.
Gamera.

 

[dbphoenix]

All this is where observation comes in. A lot of it. And as the observation phase progresses, and one begins to have questions, the observations assume a focus that they do not have at the beginning. The danger comes in rushing it with the objective of beginning trading as soon as possible, if not sooner. The results of this can be seen in those who cannot function without being told where to enter, where to exit, and have no risk tolerance whatsoever. Once one begins to think about Where Do I Enter without having a thorough understanding of what he's looking at, veering off course becomes a virtual certainty, and getting back on course a near-impossibility. Lajax is so far offering a fine example of what it means to stay on course.

 

[dbphoenix]

Those who rely solely on my posts -- or anybody's posts -- without continued and continual study of the source material are very likely to fail. Is it quick? No. Is it easy? No. Is it simple? Extremely. But it's not fool-proof.

Regarding yesterday's activity, those who don't know what to do with the following, particularly with regard to entering a trade, have not spent a sufficient amount of time in study, especially the source material. Will this come up again? Yes. It came up Monday. It may come up again today. Those who are prepared will do well. Those who aren't, won't.

Those who have studied the source material will recognize a climax and a secondary reaction at potential support. Those who haven't, even though they were told in advance to look for them, won't.

I suggest, therefore, that those who remain confused Ctrl+F W's course for "climax", "secondary reaction (or just "secondary")", "hinge", "equilibrium", and "springboard". If after all that everything continues to remain a mystery, some other approach should be investigated.

 

[Gamera]

Those who have studied the source material will recognize a climax and a secondary reaction at potential support. Those who haven't, even though they were told in advance to look for them, won't.

I only took notice of it at the time as I spent the weekend going over the 16m doc, if I hadn't I might not have given it as much thought as I had. Whilst I was aware of what this behaviour added up to, that apex at 38-9 might have put me off a little.

All this is where observation comes in. A lot of it. And as the observation phase progresses, and one begins to have questions, the observations assume a focus that they do not have at the beginning. The danger comes in rushing it with the objective of beginning trading as soon as possible, if not sooner. The results of this can be seen in those who cannot function without being told where to enter, where to exit, and have no risk tolerance whatsoever. Once one begins to think about Where Do I Enter without having a thorough understanding of what he's looking at, veering off course becomes a virtual certainty, and getting back on course a near-impossibility. Lajax is so far offering a fine example of what it means to stay on course.

Completely agree, at the start of 2013 I stripped everything from my charts and went back to basic TA. I began making observations particularly around trend breaks and the subsequent retracements, but I struggled to define what it was I was looking at and how to take advantage of it.

I came across the straight line threads in December 2013 and they helped with some of the missing pieces. At this point I wish I could say that everything changed and I've never looked back, unfortunately it didn't work out like that.

Like some of the journals I look at, I started trading almost straight away applying my understanding of the material at the time and thinking I knew enough to cobble together a strategy of some sort that might be profitable.

To cut a long story short, things did not work out as expected, whilst I could see in hindsight what I should be doing I just was not doing them in the live arena, after much resistance I gave up trying to trade and went to observation (seems stupid now that I was so stubborn, I was trying to make it work without doing the work) taking 2-3 months over the summer, eventually though I was able to get a clearer understanding of what was going on, how to test ideas, define what I was looking at, back test and forward test and build a plan around my findings.

I eventually made the foray back into the markets after the summer break, and I can say that I am profitable since this break, it is nothing stellar and my main struggle now seems to be kicking some of the bad habits that I have accumulated over the years some of which are proving more resilient than others (I'm aware that a well tested and thought out plan would or should deal with any of these issues but I am what you would call a damaged trader so I have my struggles) I continue to make progress, but your right, it is not quick and it is not easy and I still have a lot of work ahead of me.

Thanks for your efforts.
Gamera.

 

[dbphoenix]

I only took notice of it at the time as I spent the weekend going over the 16m doc, if I hadn't I might not have given it as much thought as I had. Whilst I was aware of what this behaviour added up to that apex at 38-9 might have put me off a little.

Completely agree, at the start of 2013 I stripped everything from my charts and went back to basic TA. I began making observations particularly around trend breaks and the subsequent retracements, but I struggled to define what it was I was looking at and how to take advantage of it.

I sometimes wonder if it shouldn't be referred to as BA rather TA or PA (Behavior Analysis). While some/most will look at climaxes and tests and think on what tick should I enter and how many ticks should my stop be, those who understand what's going on will appreciate the importance of the often violent rejection of the effort to push price downward/upward and will be less worried about where do I enter and where should I put my stop and think only about do I want to be in this trade. If the latter is what is uppermost in the trader's mind, the exact entry is not only irrelevant but is not even a factor. The trader understands that even to take the time to think about it will likely mean that the trade will be gone. The same can be said for HLs and LHs.

To cut a long story short, things did not work out as expected, whilst I could see in hindsight what I should be doing I just was not doing them in the live arena, after much resistance I gave up trying to trade and went to observation (seems stupid now that I was so stubborn, I was trying to make it work without doing the work) taking 2-3 months over the summer, eventually though I was able to get a clearer understanding of what was going on, how to test ideas, define what I was looking at, back test and forward test and build a plan around my findings.

This is why the process is so often easier and faster for beginners than damaged traders. If one has replay available, the observation phase shouldn't take more than weeks, by no means years. By that time, the wannabe is in a position to start listing "what-ifs" and collecting metrics. Then it's on to testing. Unfortunately, re-acquiring the openness to new experience that comes naturally to beginners is next to impossible for those who've struggled, particularly if they are angry, resentful, frustrated, distrustful, cynical.

These behaviors have existed for thousands of years. Anyone who states that they are no longer pertinent is at best ignorant.

 

[dbphoenix]

Note how price behaves as we pass through successive previous daily high swing points.

 

[eminiman414]

I don't want to say always but I've found many instance of choppiness/ranging around successive swing points/daily highs that are relatively "close" to each other. I've also observed this around new "all time" highs. Would that be showing a certain level of uncertainty or reluctancy? I really need to go back and review my notes on characterization.

 

[dbphoenix]

We passed the last swing high at 86. But there's 4300 to get through. If and when we do, the next swing high is 4322. A large part of the hesitation may have to do with the fact that we're now dealing with daily highs, and many more people see them, particularly those who trade daily charts.

 

[eminiman414]

Makes sense. I was anticipating getting to 00 if we traded above 86. Just was taking longer than expected. But here we go now.

 

[eminiman414]

A large part of the hesitation may have to do with the fact that we're now dealing with daily highs, and many more people see them, particularly those who trade daily charts.

It's amazing how that seems like such a duh but that thought never once crossed my mind.