If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
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Looks like we may just get a confirmation of a trend change to the upside in the NQ without a correction (or pullback or reaction or whatever you want to call it). Though we never got a confirmation of a trend change to the downside in the first place, but those who've followed this thread will understand what I mean.
(pssst! It's all about timeframe . . . )
(pssst! It's all about timeframe . . . )
I am trying to improve my context analysis, have been too focused in small time frames and tiny bar intervals.
What I was trying to communicate, was that as I saw it, we were still in an uptrend in the 1 hour, but as price was not getting above 30 i went into the 5 min to look for setups. I found a congestion premarket between 20 and 30 and was talking about that congestion resolving in a BO to the downside. It did not happen, the BO in the 5 min was in my view to the upside.
I know I am wrong about the approach, just don't know what is it I am wrong about.
Key phrase here is "look for". If it isn't obvious, you should probably just leave it alone. Ever since we bounced so nicely off the November trendline, I haven't been too concerned about the downside. Though there may be daily variations, the LOLR has been up, and will likely continue to be up until we hit the top of the trend channel, which is currently around 3300 +/-. We may reverse ahead of that, just like we reversed ahead of the long-term lower trendline. What may matter more is the distance from the midline, i.e., how far from the mean traders want to or are willing to go. If it's the same as it was to the downside, we may reverse around 3200.
All of which is a roundabout way of saying that if you're in an uptrend in the hourly, then look for upside ops in smaller bar intervals rather than countertrend ops. Stack the odds in your favor.
1) If a trade isn't obvious, there is no trade I should make.
2) Stack the odds in my favor by trading shorter bar interval opportunities in the direction of the hourly trend, and avoid counter trend trades.
Two notes for my notebook, and so this becomes a productive day for me even if I was not around to trade.
So I'd like to post two charts, but I do not think I can put two in one post, so I will have to post twice, because the point I'd like to make relates to both views.
This first chart is the NQ daily. It shows the current price, and the red lines were potential resistance price levels I had placed on the chart last week. I was not thinking at the time they they would so quickly be revisited. Of course, these are just prior highs where previous rallies failed in their tracks.
This second chart is the 5 minute bar interval chart of the NQ. I've been trading the 1 minute bar interval, but I had always watched the 5 minute when I trade stocks. So, what's the point? Nott much, really, other than to say that there is a pattern I had often witnessed when trading stocks that I recognize on the NQ.
You can see on this chart how price did meet with some resistance at these former resistance prices. I drew three red circles (ellipses really, but I'm not typing that more than once) showing this back and forth between buyers and sellers as price hit these areas. In the first price was turned away - not strongly, as it merely consolidated above a former resistance that was now potential support, and the overhead resistance level.
The second circle shows the engagemnet again at resistance, and then the blue circle shows a breakout above the back and forth. It happens again once price gets to the next resistance price. And that is the pattern. Nothing earth shattering to the more experienced, but for me it was another little "homecoming" as I find similarities between the price behavior of the NQ and the stocks I had been trading.
The big question for me is this: All of the resistance prices I had marked off have now been exceeded. Now what?
You can see on this chart how price did meet with some resistance at these former resistance prices. I drew three red circles (ellipses really, but I'm not typing that more than once) showing this back and forth between buyers and sellers as price hit these areas. In the first price was turned away - not strongly, as it merely consolidated above a former resistance that was now potential support, and the overhead resistance level.
The second circle shows the engagemnet again at resistance, and then the blue circle shows a breakout above the back and forth. It happens again once price gets to the next resistance price. And that is the pattern. Nothing earth shattering to the more experienced, but for me it was another little "homecoming" as I find similarities between the price behavior of the NQ and the stocks I had been trading.
The big question for me is this: All of the resistance prices I had marked off have now been exceeded. Now what?
... not to be confused with "bar interval."
There's always the possibility of a "correction". I was expecting one before this. But in the larger scheme of things, a correction is just a big retracement. I see no reason why we shouldn't eventually get to 3200 or thereabouts. And then a return trip to the other side of the trend channel. Or to the midline. Unless there's a big change in the upside trajectory of the trend. Whether or not that's likely in July is a question for somebody with lots of time on their hands. I'd bet on the return trip.
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