If You Can Draw A Straight Line . . .

[yertleturtle]

Quote from Redneck:

Two question though
Your two trades today – long or short
And were you trading – a retrace…, a breakout, or a reversal

Reason I ask..., intraday trend today was down – were you in sync with it (the forest vs trees view)

RN [/B]

I feel like there were several good long and short trades today. A long around the open, a short anytime between 75 and 70 (1), and long between 58 and 61 (2) and a short again around 70. I don't see a reason to go long going into the close but maybe someone else does.

I guess I'm asking, although the intraday trend was down should this prevent me from going long?

 

[Gringo]

Quote from yertleturtle:
I feel like there were several good long and short trades today.

The fact that you're feeling there were good long and short trades implies you don't have a proper plan regarding entry and exit. This statement of yours has been written in hindsight, at a time when you're already aware of the outcome. It might further imply that you don't really know what you're looking at or how to tell when price changes direction. I do mean this in a non-mocking way as I have been there and done that and probably was a lot slower than you can ever be. So forgive my pointing this out.

Quote from yertleturtle:
I guess I'm asking, although the intraday trend was down should this prevent me from going long?

Your plan will determine that. You knew or know the trend was down then, why go long unless you believe the trend is over? Or are you trying to scalp while also following the trend? I believe it's boils down to not having a defined criteria regarding what a trend really is, and when it's over, and how to determine when the chances of trend being over are higher.

Trading without a plan isn't going to teach much as you won't know what to fix. I suggest either just observe price and notice how it moves and then find just one setup and follow just that one setup whenever and where ever it occurs. You'll then develop that sensitivity to price and hopefully take the next step. This suggestion also holds if you are just paper trading.

I can tell you are interesting and are trying but running on a treadmill isn't going to get you from point A to point B. What may seem like work instead of you continuing to trade could potentially get you to be B much faster. It's not rocket science anda most helpful and experienced guide in Db is watching over (and yes Db, I felt that cringe of yours at my words!).

I wish you all the best.

Gringo

 

[Redneck]

Quote from yertleturtle:

I guess I'm asking, although the intraday trend was down should this prevent me from going long?

No Sir

A valid set up – is that, a valid set up – take it IF it’s within your plan

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

From ~ 6:30 up until ~8:30 – 9:00 the predominant pressure was down

Taking a long before then (~8:30 - 9:00) means we’re looking for a scalp, and any larger move (larger being relative) should be to the down side

Aside;

Even in the afternoon there were a couple of significant down moves that likely caught many buyers looking


I could also say it means we manage our trade(s) closer/ more intently, as we’re going against the pressure

But we must manage every trade intently as a matter of course – so that would be redundant

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

Stating the obvious, above is all hindsight trading on my part

My point is; It's a good idea to identify the side with the influence – as early on in the day as possible - then trade with it until, and unless, it changes / relinquishes

Wind in our sail as it were

eta;
Also what Gringo said


RN

 

[dbphoenix]

I have no idea what Yertle's plan is or if he even has one ("I feel like" is not encouraging). He may be "playing", which is a perfectly legitimate stage. But unlike the "other place", I'm not going to get into the specifics of trading plans and developing trading plans other than to refer people to the specifics on trading plans that I posted at TL. Anyone who has more than general questions can open up a journal here and get specific ongoing aid.

This thread is about drawing straight lines, and if participants wander off too far into the weeds, I'll refocus efforts back toward the central theme of the thread, i.e., drawing straight lines.

The "lines", though, may be only in the mind. There was only one in my previous post. What is more important is what traders are doing to accomplish their goals. The lines can tell you something about that by inference, once or twice removed. But the trader is much better off by trying to determine the respective convictions of buyers and sellers directly than by drawing lines.

The lines are great for keeping the scattered trader on task: the line is broken, the trader exits, and that's it. After he's solved this problem, he can later determine when he can give price a little room to maneuver and when he can't. But in the meantime, the lines provide boundaries within which he can observe trader behavior and develop a sense of the push-pull that eventually provides entry and exit opportunities.

The thread in full is If You Can Draw A Straight Line, You Can Be A Successful Trader. You don't have to get all exotic, much less spend tons of money. You may not be able to support yourself. For that you have to develop an understanding of trader behavior that goes beyond just drawing lines. But the lines will prevent you from going broke while you develop that understanding. They are not the keys to the kingdom, but they are an excellent safety net.

 

[dbphoenix]

Quote from Redneck:

From ~ 6:30 up until ~8:30 – 9:00 the predominant pressure was down

Taking a long before then (~8:30 - 9:00) means we’re looking for a scalp, and any larger move (larger being relative) should be to the down side

We'll have to disagree here. After midnight, the pressure is basically neutral. After hitting 74, price falls back to a level well above 50% (56). It then moves sideways for three hours until rallying to 72, then dropping to 61, then forming a hinge with a midpoint of 65. I've gone into all that in the post I made this morning, but a hinge is an effort towards equilibrium, so pressure is even on both sides. And given the dynamics of it as explained in that earlier post, the opening long is perfectly legit. Of course, sellers gained the upper hand once price reached 78, but that was not foreseeable, and 65 to 78 is not a bad way to start the day.

 

[Redneck]

Quote from dbphoenix:

We'll have to disagree here.

I based my comments on the last chart YT posted - just called it the
way I saw it


it hit the top of the bigger channel - then proceeded to the other side and beyond (for what appears to be a measured move based on that last grayed out congestion area)

No biggie

RN

 

[bmwhendrix]

I agree with DB on this. (fwiw) Here is the reason why. It is also why I like volume charts. I can better see significant things and then go to the 1 min for fine tuning.

 

[bmwhendrix]

Also, though I did not notice it at the time.
Channel points 1,4 and 5 set up the rise to 6, just as points 1,2 and 4 set the fall to 3. And also set up the fall back to the lower channel.

Hmmmm.

 

[yertleturtle]

I guess I will have to be much more exact with my wording. I do have a trading plan that helps me enter, exit and manage my trades. I am working on making it more robust.

When Redneck questioned whether I was in sync with the intraday trend I was trying to clarify what his concern was. I do use the lines on my chart to not "get lost" and there are a lot of them for sure but its working for me. I also draw as a way to keep me engaged in the market.

Most of the comments about my charting assume that because they are a mess that I don't know what direction is up. There is a logic to my lines which I now understand is only apparent to me.

I do appreciate all comments.

 

[fortydraws]

Quote from dbphoenix:

Consider, therefore, the following:

You have to see the hinge to begin with. If you do, you obviously see also the midpoint. You see that price has risen from the apex of the hinge and is returning to the midpoint of the hinge, perhaps to test it. This test occurs and price bounces off that level about 15m before the open. If you take the long, and there's no reason why you shouldn't.

The frequency with which I have seen this behavior is staggering. When I started out day trading stocks last year, my entire plan was based on recognizing a hinge following a strong upward move resulting in a gap opening higher. My hypothesis was that the gap open higher indicated an imbalance in supply and demand tilted toward the demand side. This, I theorized, would mean that once equilibrium were achieved, the odds favored that demand would again outstrip supply and result in higher prices. It does not always resolve itself that way, but it gives a low risk entry and an obvious point to recognize that things are not going your way.

I would buy as price rose from the apex, and the test of the midpoint following that initial rise is common enough for a green rookie like me to recognize it as common. If price instead dropped out of the bottom of the hinge, especially after having probed break higher first, then I wanted not to be long that stock.