Quote from dbphoenix:
Friday morning:
It is good to see that my read matched yours. Clearly the borogroves were not mimsy that day!
If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
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It is good to see that my read matched yours. Clearly the borogroves were not mimsy that day!
I am posting a copy of the daily chart of the Nasdaq 100 index. I placed the regression channel I had mentioned above on the index, striking the upper line from the 5/22 high to the 6/17 high (mistakenly noted as the 6/19 high on the chart) and extending it forward in time.
While I use supply/demand lines, and I use trendlines, at least in my head, when I am watching hinges and springboards and rectangles, I will be more interested in whether price is trading above Friday's high or below it, and how it is behaving wherever it may find itself, than I am with that regression channel.
I have a question for you DbPhoenix: Being a stock guy, I review the daily charts of the indexes and I have used those to establish my reading of the current intermediate trend. And being a stock guy for the last year, I have not paid any mind to the daily charts of the futures. As I embark on this futures trading endeavor, do you suggest I pay attention to the futures daily to the exclusion of the indexes themselves, or what?
Thanks for letting me butt into another of your threads!
While I use supply/demand lines, and I use trendlines, at least in my head, when I am watching hinges and springboards and rectangles, I will be more interested in whether price is trading above Friday's high or below it, and how it is behaving wherever it may find itself, than I am with that regression channel.
I have a question for you DbPhoenix: Being a stock guy, I review the daily charts of the indexes and I have used those to establish my reading of the current intermediate trend. And being a stock guy for the last year, I have not paid any mind to the daily charts of the futures. As I embark on this futures trading endeavor, do you suggest I pay attention to the futures daily to the exclusion of the indexes themselves, or what?
Thanks for letting me butt into another of your threads!
FD,
Far be it from me to tell another how to establish contextâ¦. and I fully acknowledge this is DBâs thread
But may I suggest you extend your TF out a bit â to just prior to Decâ¦.
Not to mention price closed near its high last week
DB may disagree... or not - I don't know...
Simply food for thought Sir
RN
First, a regression channel is not a trend channel. It shows a line to which price will regress after one connects the highest high to the lowest low -- or vice-versa -- within a given timeframe. But it will not define a trend channel properly, particularly with regard to overbought/oversold excursions outside the channel. I suggest plotting regression channels to those who have no idea how to determine trend, much less how to distinguish between up and down without plotting an indicator, but they are no substitute. See below the chart I posted earlier:
As for the Big Picture, it needs to be bigger. Below are the NDX and NQ.
Granted the daytrader may wonder why on earth he has to look at a multi-year chart if he's trading a 1m bar interval. The reason, of course, is that whatever trend he's looking at -- even if it's only an hour or so, assuming he's looking at anything that occurred before the open, which many traders aren't -- is bound by the trend or trends within which it resides. Thus if one wants to know the line of least resistance, much less where price can be expected to go both to the upside and the down, he needs to look at the context. Otherwise, he will have no idea what to do when the market opens, and one needn't look far for many examples of traders who fit that particular bill.
It's easy to slip into the micro frame of mind. But allowing oneself to do so means that one will not only fail to profit from whatever trends he lucks into during the day but will more likely find himself trading countertrend again and again. Knowing the macro will help him stay tuned into the general trend and follow the line of least resistance.
As for whether you should focus on the charts of the futures vs the charts of the indices, I suggest you focus on the charts of whatever it is you're trading. The NDX and NQ, for example, lagged the Naz for months before they decided to play catchup in April. What good would it have done to track the Naz for so long, even if one had had the patience to do so? And when it came right down to it, tracking the index wouldn't have mattered anyway to catching the nearly four-week upmove in the NQ from 2780 to 3050, as I showed in the "straight line" thread at TL.
Therefore, considering the general difficulties that traders have with focus, I suggest broadening one's view to a wider timeframe with regard to the particular instrument being traded rather than "broadening" one's view to several instruments in a very narrow timeframe.
So I will focus on the NQ, and I will scuttle the regression channel (thank you - I really was uneasy about it) and stick to good old fashioned trend channels. For the Big Picture, I will extend my view beyond the past few weeks to include months if not years to make sure I maintain an awareness of the general trend. I will continue to trade primarily using the one minute bar interval, but I will do so with the awareness and within the context of the daily and hourly trends.
I will be watching before the open tomorrow, and I have no objection to trading premkt. As you may recall, most of my day trading to this point has been trading individual stock issues, primarily those which are gapping at the open. By definition, my trades occurred after the opening bell. I suspect that with respect to the minute by minute particulars I will not need to adjust too much as I make this transition to futures. However, I can see where I may need to adjust and broaden my view at the macro level.
As always, thank you for your help.
Understand, though, that it isn't necessary to review these longer-term trends every day, or even every week. But given that we've been referring to "the downtrend" for weeks now, it's good to remember that we're nowhere near being in a downtrend. The "downtrend" we've been trading has been a grain of sand on the beach. But while the U-turn from a trip to the lower trendline to a return to the midline may be only a blip in the larger scheme of things, it's a tradeable blip. But to make the most of it, one must know where nearby support and resistance lie and the line of least resistance. Otherwise, he's just not making the most out of his trading session and may as well trade the daily chart.
Getting / being comfortable with every nuance of our trading is a must
It builds confidence â and not the cocky / egotistical kind of confidence â but the real kind - that runs to oneâs very core
That's when good things happen
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Whenever one finds they are uncomfortable â they either need to do the work to get comfortable⦠or get rid of it immediately (which at times necessitates even more work)
RN
Choppy morning in the NQ, Oil and Gold are choppy as well. The move I interpreted as a REV last week ended up being a RET (Is there any way to avoid getting taken out of that long, assuming one entered around the HL at 2880), now we are above the SL after another RET that found S at the bottom of June TR, if buyers do what they usually do we should expect prices to reach 3000 (top of the June TR)
even if its a lil late in the day .. here is how i would prep. and execute a potential long setup in NQ
H1 Background / Analysis
M5 Prep/ Targets
M1 Execution / Management
cheers
EDIT:While posting the Trade would have been executed by now!
http://imgur.com/DWWZBY8
http://imgur.com/Er2ESJd
http://imgur.com/MQVF1gG
H1 Background / Analysis
M5 Prep/ Targets
M1 Execution / Management
cheers
EDIT:While posting the Trade would have been executed by now!
http://imgur.com/DWWZBY8
http://imgur.com/Er2ESJd
http://imgur.com/MQVF1gG
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