If You Can Draw A Straight Line . . .

[Trader.Fighter]

Quote from Redneck:

This post potentially could be misinterpreted as a slight toward DB – it is not

I respect him…, as I do all traders, or folks sincerely trying to be one

==============
From all the views to this thread I surmise he has quite the following…

And small wonder – his charts/ commentary make total sense – and are easy to understand

For those of you trying to dissect/ replicate how DB trades and/or how he sets up his chart(s) / deciphers each day’s story - I propose this;


Try focusing on, and understanding - HOW DB is thinking

=============

The mkt can be summed this way….

• Price can only do what – move up/ down/ sideways

• Participants are either – buying or selling

• At any given moment in time one side is either

In control

Trying to gain control

Relinquished control

That’s it…..

And I’ll also go so as to say any trader can show any aspiring trader – how to trade in a couple of hours - give or take

=============================

So what is the big deal…, missing link…. "holy grail"….. "secret" of unlocking it all

It is all about how we think….

Which btw, is why trying to teach another is damn near impossible


Sure we can show you/ even sit next to you and trade…

But mostly that’ll only serve to make one frustrated…. because you can’t replicate it – try like hell as you might….

Successful trading is not about what you think – but how

Successful trading is also not about what you think – but only what you do…

And how you think – absolutely 100% dictates what you do / how you view a chart/ all of it

===============

I don’t know... maybe this is coming across as some hocus pocus / guru bullshit…

It ain't meant to be….

It is simply the most straight up way I can explain it


Please if nothing – try to gain insight into how DB is thinking – it’ll improve your trading beyond measure

=============

DB – as always… you take exception to what I've said here, please say so Sir


Probably just more of my random crap

RN

RN,

To me is about setups, I spot them and trade them, if I dont, I keep looking for them.

As far as execution, there's no deviation, stop and target.

I try to keep it very simple. However, finding the setups with positive expectancy was far from simple or easy.

 

[Redneck]

Quote from Trader.Fighter:

RN,

To me is about setups, I spot them and trade them, if I dont, I keep looking for them.

As far as execution, there's no deviation, stop and target.

I try to keep it very simple. However, finding the setups with positive expectancy was far from simple or easy.

After one cuts out the BS – this is exactly what trading is

And what this thread is about

Thank You TF


eta - imho each outcome is uncertain - so I've no clue what a positive expectancy set up is..

But therein lies the beauty - we each make it the way we prefer


RN

 

[dbphoenix]

I haven't gone into volume because so much misinformation about it has made the rounds that turning back that tide would take far more time and effort than would be worth making a particular point about it. So I don't want to start anything.

However, given the fact that price spent so much time at what appeared to be resistance in the NQ and the ES yesterday and wound up accomplishing nothing, I found it curious that volume was so low. This told me that the failure to make any real progress had less to do with selling pressure than with a lack of resolve on the part of buyers. In other words, sellers pretty much let buyers have their way, which suggests that prices aren't high enough to prompt seller action yet. Whether or not buyers fold up like a cheap lawn chair when sellers apply the pressure -- and they will eventually apply the pressure -- remains to be seen.

If price drops below 60, there may be a decent pullback (2900 is currently the 50% level, and also the mid-June swing low). That would at least test buyers' resolve. Otherwise, I see nothing to prevent us from reaching 3000 and beyond until sellers decide that prices are high enough to prompt a harvest. That event will test buyers' resolve as well.

 

[fortydraws]

Quote from dbphoenix:

I haven't gone into volume

I wish you would!

The chart below has two areas of interest. First the hinge from approx 3:56 - 4:19. I was still slumbering, of course, but I like this hinge: Filled with price and volume dries up. The one bar with greater than average volume within the hinge was the large range bar that had opened near its high but traded down nearly to what would become the low point of the hinge.

Here is a missed opportunity for me from this morning. I do not know if this will carry lower or not, but it was a short opportunity that I missed.

I have 81.25 and 85 as resistance, and I have 69 as the closest support. I am watching the 77/78 level, and I did plant a dotted line at 76.75, the approx midpoint of that hinge noted above, and a level at which I would have been thinking to get short at the time. I find that those hinge midpoints often act as resistance when tested the first time (the same thing happened on the hinge from last week that I posted), and I surmise this is because traders who, like me, would have liked to have sold/bought there are taking the opportunity to do just that.

I placed two red diamonds where I had considered shorting, but I did not pull the trigger. I kept looking up at that 81.25 overnight high and thinking "why are we not going to test that first?"

Sorry for the interuption. Now, back to trading.

 

[dbphoenix]

Quote from fortydraws:

I placed two red diamonds where I had considered shorting, but I did not pull the trigger. I kept looking up at that 81.25 overnight high and thinking "why are we not going to test that first?"

It doesn't matter. Find the level at which you think a short is reasonably high-probability, such as 77, and set your sellstop below the lower high. If price rallies instead, your entry isn't triggered. If it is triggered, then all you have to do is manage it.

 

[fortydraws]

Today:

Started off with two small losses, though in hindsight (glorious hindsight) they should have been smaller. Perhaps they should not have been taken at all. I understand that the true rational behind these trades is my interpretation of trader behaviour. I will use short hand jargon, e.g. lower high/higher low. Here is the blow by blow:

Trade 1: short during 9:41, exited during 9:44 (loss), lower high at overnight high.

Trade 2: short during 9:53, exited during 9:57 (loss), lower high at yesterday's high

Trade 3: short during 10:13, exited during 10:27 Profit, lower high after morning session high, waited for demand line break (this might have helped, or not, on the first two).

Trade 4: Long during 11:20. exited during 11:45 Profit. Higher low around level of the overnight high.

Trade 5: Short during 11:57, exited during 12:05 (scratch) I was thinking along the lines of a "lower high" as price failed to reach 89, dropped back, and consolidated. Of the five trades today, even though I lost very little on this one, a scratch trade after commissions, this is the one I would like to take back as having been a mistake.

Final tally: I finish with a bit more than I started with, as well as an area to focus my attention on. Specifically, I am still getting accustomed to when to cut a loss, as I think I allowed both of the first two losses to take too much. I don't mean that I let the losses run hoping they would turn around in my favor. I mean I need to work on recognizing more quickly that my trade is going into the latrine, along with my money.

Again, if you have the time, DbPhoenix, your comments and criticisms are always welcome.

 

[NoDoji]

Quote from fortydraws:

Again, if you have the time, DbPhoenix, your comments and criticisms are always welcome.

Hope you don't mind Ms. Buttinski's comments here

Regarding your first two trades, those small pullbacks in a clear uptrend are places to buy until the trend ends.

Notice the difference in price action where you put on your 3rd trade. Specifically, price broke the low of a previous small pullback. That often means a deeper pullback is forthcoming. The 1-min trend may be ending. If nothing else there will likely be some consolidation.

Your 4th trade is an early entry long and I occasionally enter that way, but I prefer to wait for the range break followed by a pullback to the breakout level that doesn't close inside the breakout level. That would place me long as the "second mouse" at about the same price as your entry but several minutes later (around 11:30).

Your 5th trade looks OK (other than slow time of day awaiting FOMC). There's a wide channel in play by that point with a good chance 2978.50 will be tested.

 

[dbphoenix]

Quote from fortydraws:

Again, if you have the time, DbPhoenix, your comments and criticisms are always welcome.

You're beginning to lose your child-like innocence and instead work -- unintentionally, I'm sure -- toward demonstrating what a nimble trader you are (no offense). I'm currently involved in a dustup over at TL with regard to how few traders can tell up from down, and this is a timely and useful illustration.

If you've pegged resistance of some sort, remember that that resistance is in your head. Even if buyers and sellers have created what appears to be resistance through their own trading activity, that doesn't mean that that resistance can't melt like a popsicle in July if traders choose that it should. So as long as price is rising, don't short just because it's approaching what you believe is resistance. If you're going to short, wait until resistance has proved itself -- again, if necessary -- and then short the reversal -- or at least what appears to be a reversal -- or the lower high. Until then, go long or don't trade at all.

Regardless of what I or anyone else says, you'll note that when you do it right, the trade does what you expect it to do. When you don't, it doesn't. So if you have any facility for inductive reasoning, collect those instances and draw whatever conclusions seem useful and appropriate.

Edit: What I meant to say above is wait until resistance has proved itself, or proved itself again, if necessary . . .. In other words, make sure it really is resistance before committing funds to the decision.

 

[dbphoenix]

Quote from NoDoji:

Hope you don't mind Ms. Buttinski's comments here

Regarding your first two trades, those small pullbacks in a clear uptrend are places to buy until the trend ends.

Notice the difference in price action where you put on your 3rd trade. Specifically, price broke the low of a previous small pullback. That often means a deeper pullback is forthcoming. The 1-min trend may be ending. If nothing else there will likely be some consolidation.

Your 4th trade is an early entry long and I occasionally enter that way, but I prefer to wait for the range break followed by a pullback to the breakout level that doesn't close inside the breakout level. That would place me long as the "second mouse" at about the same price as your entry but several minutes later (around 11:30).

Your 5th trade looks OK (other than slow time of day awaiting FOMC). There's a wide channel in play by that point with a good chance 2978.50 will be tested.

What she said

 

[dbphoenix]

So the NQ finally reaches 3000. I should point out here, again if I've already done so, that the price targets based on diagonal lines will change as the days roll by because of the diagonality (if that's a word) of the lines. However, sometimes a target based on a diagonal line will coincide with a price event to the left, such as the tests of 3000 in June. This makes the current test of 3000 more than just a possible trader fantasy.

The ES is still struggling with 50.