Ok. Thank you!
If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
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Ok. Thank you!
DbPhoenix, in another thread here at ET, you said that trend channels can be misleading if price is graphed on a log scale. So this mean you would suggest thaat one sets his charts to arithmetic scale? And does this apply to supply/demand lines as well? That they might be misleading if drawn on a log rather than an arithmetic scale?
Thanks Gringo
I'm done for thew day as my heart is racing - literally it is going 150 bpm right now!
Here is how I did:
Market opened just below the hinge-like activity of yesterday's afternoon range. It formed a very clear hinge, filled with price 9:35 - 9:43 AM I entered long at 13 during the 9:44 bar interval. Price then stalled at 3119.25 for three minutes, where the low of the stall was 18.50 and the high 19.25
At 9:50, price poked down to 18 and managed a bounce only 19. I placed a stop order with enough contracts to liquidate my longs from 13 and initiate a short position at 17.75. I had a limit order at 3105 which was filled during the 10:00 bar interval.
As I finish typing this, I see that I have obviously left a good amount of potential on the table. I am still learning, and I have much to learn when it comes to trade management, as I cut my potential profit in half (price is currently trading 3094.75, a full 23 points below my short entry and right at a level I noted here last night as potential anticipated support:
I know I have had two days where the market offered big, quick, trending moves. But I do feel that that week off to study and observe, without the pressure of entering orders and managing trades hass really helped me advance my ability to take advanatge of such moves.
Like I said, I am done for today. I feel I am too elated and jittery to continue clear headed. I am going to the driving range to bash a bucket of balls before I head off to my day job.
Hi Forotydraws,
Your entries are impressive, however, your exit at perceived support might be something to look at. Was it just because price bounced at potential support that you exited? Seems that way. With perhaps some supply line infused in here it might get better.
You have the nerves of steel to make fast and efficient decisions and that's quite a thing. Over time I am confident other kinks will be removed for even better results.
I was curious as to how you went long after that BO from hinge. Are you posting 1 min and looking at smaller bar intervals for your decision making? Or does your plan includes a hinge BO to be a signal for entry without a RET?
Thank again and well done!
Gringo
Your entries are impressive, however, your exit at perceived support might be something to look at. Was it just because price bounced at potential support that you exited? Seems that way. With perhaps some supply line infused in here it might get better.
You have the nerves of steel to make fast and efficient decisions and that's quite a thing. Over time I am confident other kinks will be removed for even better results.
I was curious as to how you went long after that BO from hinge. Are you posting 1 min and looking at smaller bar intervals for your decision making? Or does your plan includes a hinge BO to be a signal for entry without a RET?
Thank again and well done!
Gringo
I never have understood the attraction of log charts since they distort the progression of price so much. A higher high is a higher high regardless of how it's plotted, but the trendline on a log chart, if one can call it a trendline, will be very different, and if there's no advantage to it, why bother?
Hi Gringo,
I exited at 105 with a limit order. I thought that if price made it there, I'd exit and see what happened next. Not the best thought in hindsight, and an unfortunate deviation from my plan which I executed so well on the prior day.
I assume by "hinge bo" you mean "breakout." I started trading a year ago, and at that time, I put together a plan that had me trading stocks that gapped open higher, formed a hinge, and then broke higher. For most of the last year, that was my only trade. Only stocks, long only, after a hinge easily visible on a one minute bar interval chart. As for the "nerves of steel," the stock trading has much to do with that. It isn't so much nerves of steel as it is an appreciation of how quickly the best trades work. When trading stocks, that bid ask can move and open a lot. I learned quickly that I must be able to decide what to do and then do it. It has become a part of the way I trade, and so it has carried over from trading individual stock issues to the NQ futures contract.
I decided to start trading the NQ emini future contract in June. I trade the hinge on the NQ the same way as I would a stock - buy as price begins to leave the pattern. I do not wait for the retrace on a hinge. In fact, I have found that often I get a good trade, long or short, as price break from the hinge, and that I get a second chance to do the same trade all over again when price finally retraces back to the midpoint of the hinge.
I do not watch a lower bar interval, but I do watch T&S. I do not watch for a bo and retrace on T&S so much as I watch size of trades on the bid & offer and the pace of trading. I am not glued to the T&S, and I often just make the trade by the chart graphing alone.
I have no idea if I answered your question or not, but I tried
I had never given the issue any thought other than I did find early on that I referred watching 1 and 5 minute bar interval stock charts on an arithmetic scale rather than a log scale. If you had asked me why, I could not really have put a reason to it other than I seemed to read what was going on at any particular moment better on the A scale rather than the L scale.
I had not used trend lines much at all until I started following along in this current thread, so I never had an opportunity to notice the distortion you pointed out.
Quote from dbphoenix:
A half-hour before the NY open and an interesting development. Or at least it might be.
Price has been forming what the pattern people call a "symmetrical triangle" or a "coil". The symmetrical triangle part is sort of a duh, but "coil" pretty accurately describes what traders have been doing.
The coil represents -- or can -- an energy compression. The difference between what sellers are seeking as value and what buyers are seeking as value gets narrower and narrower. If this doesn't go on too long, this compression will result in a substantial and sometimes explosive move out of this coil ("coil" implies a readying to spring).
As you can see, buyers have been able to push price up to the upper limit of the coil. Sellers can be expected to push it down toward the lower limit (this is all part of the exploration process to "feel each other out").
What matters, of course, is not the "pattern" per se but the trader behavior that's causing it. Play the behavior, not the pattern, and you are far more likely to end up on the correct side.
If price has not broken out to one side or the other by the time the coil is nearly complete, it is more likely to do little more than dribble out the end and move sideways until somebody gives somebody a hot foot and price takes off again into parts unknown. This listlessness occurs because traders have given up their efforts to make something happen, for whatever reason, and are focusing instead on their danish. Why they've given up is less important than the fact of it, and that can be determined by the price movement. Or lack of it.
db,
how does one "Play the behavior, not the pattern"? how would you trade this? would you wait for price to move in a certain direction and then get in? i would have been looking to go long here because of the pattern.
if you could please briefly explain how do you understand what other traders are doing. thanks.
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