On higher volume reversal bar at 10:11? It also made a double bottom with 9:54 bar.
If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
- Start date
- Status
I did not trade today, but I did do my regular morning routine, i.e. determined where price was in the context of its recent range(s), and looked for areas where I might find someone to trade with, from both the long and the short of it.
I can only post one chart per post, so this will take two posts to show what I was thinking and what that hinge meant to me. Again, I didn't trade today, but like any good American, I have a smart phone, and you can bet I had my one NQ chart loaded on TWS mobile.
In this post, I am attaching an hourly chart. The far left side begins at what is basically the New York open on August 6th, and the right side is through just a few minutes ago.
The high of the range is 3148, the low was yesterday's 3055.50. This range can be roughly divided into two time periods, 8/6 through 8/15, which encpmp[asses the price activity in the yellow region of th echart, and then 8/15 through today, represented by the price activity in the blue region of the chart.
Yellow region is 3090.75 to 3148, with the approx. midpoint of 3119.50.
Blue region is 3100.50 down to 3055.5, with the approx midpoint at 3078. Now, we note that 3078 is very near our old friend 3077.50 +/- that we have now had reason to mention every day this week.
The mid-point of the entire range ia approx. 3101.75.
I am going to post this as it is, and I will follow up with a post aout that hinge.
That is where I would have reversed back to long had I been short.
I have tried to highlight a few things on this chart. I do not do this to my chart as I'm trading, but these lines and rectangles and stuff are in my head and I am projecting them onto my chart.
Let's go left to right, rather than starting with the hinge.
During the premkt, price settled into range just above the above mentioned 77.50/78 level, which has seen a lot of activity this week. But for a brief, 13 minute meander below 78 (but within the gravitiational pull of 77.50, price stayed above 78 in a well behaved range.
Just before the open, price climbed to the upper regions of the premkt range and began an attemot to break free. The dashed blue line in the midpoint of that breakout range and was also the prior high of the entire premkt range that I hgighlighted in white.
At the open, a long entry between 85 and as low as you could get it was, in my opinion, the "duh" trade of the day.
Price quickly climbed to 89, and consolidated briefly, pulling back to 86.25, before rsuming its climb. I'm sure there were a number of traders who missed the initial trade off the open who were buying that pullback and others still who were waiting with buy stops at 89.25, waiting for price to come to them.
At this point, a reasonable target for a long would be that 3100 level, but who knows if it will actually get there? Price continued itas climb, and for me, the first sign I would have seen as a place to either close the longs, or even stop and reverse would have been during the 9:43 - 9:47 sequence. Price had rallied to 97, pulled back to 93.75, made3 a slightly higher high at 97.50, and then put in its first LH after a pullback (9:46). This is the top of our hinge.
Now, forget whether or not one shorted the LH or not. Price keeps moving continuosly, and everyone sees the hinge forming.
Where do you buy it? Where do you sell it? For me, I try to get in as early as possible after price indicates that traders are finished futzing around and price is leaving the hinge behind. For me, that would have given a short entry at 91, and a long entry somewhere between 84.75 and 95.75.
As the hinge is forming, we know that a long breakout could find R anywhere between today's then 97.50 high and that 3100 level.
A short entry has the midpoint of the move from the opening low to the day's high, or approx. 3090 (small dashed blue line), and let's not forget the trader's who bought that 89.25 continuation break up, and more importantly, the possible existence of some angry trader's who've been kicking themselves for having missed the chance to buy at 89/90 or there abouts.
Keeping all this in mind, which should be easy to see and fathom and consider in real time, then one who is planning to trade the breakout from the hinge has both a long and short entry plan, as well as a stop and reverse contingency plan. The entry plan is based upon the levels one sees traded within the hinge itself. The contingency plans will be based upon watching what price, i.e. traders do once they take price to the first potential S or R level post-hinge.
So, I would agree with bmwhendrix - certainly one should not need price to do anymore than do what it did during that 10:11 bar interval. I would only add that while it may or may not be a "double bottom" reversal, it is much easier to roll with th punches (because you are prepared for them) when you constantly remind yourself that this is not mere electronic bits or bytes on a computer screen. These are the record of transactions between a person such as yourself who was selling and another who was buying. Viewing price movements like this won't prevent losing trades. But they will help you get out of them quickly and back to looking for better trades quickly.
Sorry for the long post. I wanted to put this out in words for myself as well.
EDIT: If you haven't noticed by now, I am a terrible typist. I apologize for all of my typos, past, present, and future
I've been reading Mamis's trilogy, William J O'Neil's book, and a couple of others in preparation to start some end of day stock buying, swing-type trading. From what you say here, this is probably not the best time to be starting such an activity.
While I appreciate 40's sharing this thoughts on this trade, the answer to this question is more complex than one might think.
To begin with, you ask the question as though there's some correct point at which one goes long, and while one might argue that there is some "best" point to do so, that doesn't matter much when the discussion is brought down to the level of actual trading and actual traders. There are, for example, few traders other than beginners who would have gone long at the open. Everyone else would have worried about the trick or the trap and would have been afraid to act with those fears buzzing around like flies.
Therefore, the "best" place to enter depends on how fearful you are, how well you understand how trader behavior is manifested in price movement, what your risk tolerance is, and how well you can take price movement at face value rather than search for hidden meanings (and tricks and traps). If you pass all these hurdles, then the "best" long is the 10:11 bar. It rejects the level of the swing low that defined the low of the hinge and it can be expected to follow the scenario of moving in the opposite direction of the first move out of the hinge, i.e., a move up after a move down. Rather than guess where exactly to enter, one can place a follow buystop above each declining bar in succession. If and when the market reverses, he is then stopped in to the trade. If it doesn't, he isn't. Next best is to wait until price breaks out of the top of the hinge, as 40 suggested. Least best is to wait for the first retracement after the breakout, least best because there may not be one until the move is nearly over.
The best entry, then, depends only in part on the market. What you bring to the trade is at least as important since we do not trade the market so much as we trade our perceptions of it.
You're right, and going forward I will keep my mouth shut. I can tell from the general slant of a fresh batch of PM's in my in-box that I might have crossed the line over into the "too big for my britches" territory.
Wrong. I did not intend to be snarky. Your comments were and are valued. Otherwise it becomes What Would Db Do, and Db isn't going to be around forever. Don't let the snarks prevent you from offering the sort of insights and guidance that those who are genuinely interested look forward to. You can only imagine what I've been the recipient of over the years. If the PMs bother you, turn them off. If the snarks want to post stupidities here, they can argue with me. They're all failures anyway, so who cares?
I didn't take your remark that way, DbPhoenix. I was reacting to the people who for some reason can't be happy discussing charts and trading by price, but focus instead on the lack of audited trade results.
You know, I spent the last year learning to do this by reading and studying the contributions made by you and others at the TL Wyckoff forum, studying Wyckoff's course, and reading your book, and not once did I even think to wonder "Gee, I wonder if any of these guys actually trade?" What do I care? All I wanted to know was could I make this work. And it worked well enough early enough in my investigations to indicate to me that a viable trading approach could be had from applying it. And that is exactly what I got, and all without anyone ever posting or emailing me "proof" that they were trading by price. Silly me!
You know, I spent the last year learning to do this by reading and studying the contributions made by you and others at the TL Wyckoff forum, studying Wyckoff's course, and reading your book, and not once did I even think to wonder "Gee, I wonder if any of these guys actually trade?" What do I care? All I wanted to know was could I make this work. And it worked well enough early enough in my investigations to indicate to me that a viable trading approach could be had from applying it. And that is exactly what I got, and all without anyone ever posting or emailing me "proof" that they were trading by price. Silly me!
To begin with, successful traders don't attack each other. Why would they?
Second, those who clamor for proof -- audited statements, live/real-time calls, etc -- are only looking for someone to copy since they have no trading plan of their own. Their idea of doing the work consists of finding somebody to follow.
So, just turn off your PMs. Anybody who wants to behave like an ass can do so here. Or try.
I turned them off. I'm sorry to the few guys who were always encouraging and polite. You know who you are, and you can always find me here.
I'm heading out for the day.
Looks like NQ is going to make a run for the that 3119.50 approx midpoint of the former 3090.75 - 3148 range, at the very least. It may get there well before the open.
- Status