If You Can Draw A Straight Line . . .

[niko]

Quote from fortydraws:

Well, I missed the buy on the open. I realized I had not posted my plan here, and the process of doing so late caused me to be caught flat-foot at the open wearing the trading equivalent of cement shoes. From now on, if I do not have it posted by 9:15 AM, I am just going to have to skip posting until later.

So 3100 was bought, 3109 reached quickly. After that, I had considered a short, but with that 13.25 just a stampede above, and news at 10, I held off, thinking that I would do nothing unless price dropped back to 100 or traded up to 13.25.

Here is what I did: I shorted 11.50 during during the 10:14 - 10:15 bar interval, and I covered at the market during the 10:25 - 10:26 bar interval. The market order is what results in the goofy price.

EDIT: I included the trade log for those who are not satisfied with anything less This will be the last time I do this - here after y'all have to take my word for it, and if you don't believe me, then that will just have to fine with both of us

40, are those commissions net of exchange and NFA fees?

 

[niko]

Why the short?

 

[fortydraws]

Quote from niko:

40, are those commissions net of exchange and NFA fees?

Those are my total cost, fees, commissions, etc., as far as I know. I've never seen any additional charges after the fact.

 

[Gringo]

Quote from niko:

Why the short?

Niko,

I believe it's because of the failure of BO. 3111 to 3113 area was mentioned earlier as possible s/r or a lever where previously price has spent some time. 9:32-40 am also had the high around there. Two or three things were pointed at that level. When BO failed the LOLR became possibly down.

Just because Fortydraws can pull this off doesn't mean you have to. Work according to your plan and use the SL/DL break and whatever else you're using. Over time when you are comfortable with what can be achieved with your simpler plan you can move on to add other exotic entries!

Take care,

Gringo

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Edit:
LOLR = Line of Least Resistance

If price can't go up. And that's the only thing we know when it fails to go up, the only possibility is sideways or down. So the dice was rolled by Fortydraws by taking the position and hoping it would go down, which it did.

Now, I am guessing the reasons Fortydraws had for his short and he very well might have been thinking something else.

 

[wegotnthtodo]

Quote from niko:

Why the short?

I think he judged the move to be weak enough to BO, and I'm not sure is it some kind of "feeling" that the power of the down move is strong. So he took the risk to short at the "top" and even if it's not a real down move, he can still get out of the trade immediately if it shows a sign of RET. Either way, he have the enough space to take profit or BE considering that he entered the trade at the initial of the move.

It's a matter of risk appetite and he's not in a long trade. But whatever he's thinking that time may be different that what' d said above.
Just my 0.02

weg

 

[fortydraws]

Quote from niko:

Why the short?

Hi Niko,

I was not watching the TIC chart, but I have said before, whether I am watching a 30 sec, one minute, 5 minute, it all sorta looks the same to me. I do not draw the SL/DL on the fly other than in my head.

Here is the tic chart, and I tried to show the relevant areas where buyers failed to do what buyer's are supposed to do, and this should give you a sense of what I was seeeing at the time.

Also, I spent much of the last year day trading stocks and watching time & sales. That experience is no doubt helping me now in ways that I find impossible to put on paper for you.

As I was putting this post together, I've kept the 1 tic chart open, price had danced around that 91.50 level that I had on the chart I posted first thing this morning. What a show it put on around that level! If I had wanted to try a long there, I would have bought sometime beween 11:48:35 and 11:49:23 trying to get filled at 92.50. Could probably treat the trade like a free range chicken so long as price stays above 91.75 - a 3 tick risk for the possibility of maybe 3, 5, 8 points or more? I like those opportunities!

Check with DbPhoenix before you do this, but one exercise I might suggest to you: Do your S&R prep work in the premkt, and then resolve to watch a single tic chart for a day or two or three. It will be incredibly boring, for good reason: Price will spend the majority of the day where you have no business messing with it. Sit there and watch it tic by tic until one of your levles come into view. Then, watch the show! This will possibly teach you two things: 1) most of time, you should be doing nothing to enter a trade if you are not already in one, and 2) you will only be watching that activity that occurs around levels where the behavior for trades will likely give you clues as to what is most likely to happen next.

That's the best I can do for now, Niko. I have to get to work

 

[fortydraws]

Quote from fortydraws:

Hi Niko,

I was not watching the TIC chart

Here is the same chart. I just tried to reduce it to make it easier to view the who things. I don't know if it worked or not to reduce it but I tried.

PS That first long I owuld have exited at 91.50, and gone right back in on the dog that didn't bark and I would have been happy with any trade price 92.75 or better.

 

[niko]

Quote from fortydraws:

Hi Niko,

I was not watching the TIC chart, but I have said before, whether I am watching a 30 sec, one minute, 5 minute, it all sorta looks the same to me. I do not draw the SL/DL on the fly other than in my head.

Here is the tic chart, and I tried to show the relevant areas where buyers failed to do what buyer's are supposed to do, and this should give you a sense of what I was seeeing at the time.

Also, I spent much of the last year day trading stocks and watching time & sales. That experience is no doubt helping me now in ways that I find impossible to put on paper for you.

As I was putting this post together, I've kept the 1 tic chart open, price had danced around that 91.50 level that I had on the chart I posted first thing this morning. What a show it put on around that level! If I had wanted to try a long there, I would have bought sometime beween 11:48:35 and 11:49:23 trying to get filled at 92.50. Could probably treat the trade like a free range chicken so long as price stays above 91.75 - a 3 tick risk for the possibility of maybe 3, 5, 8 points or more? I like those opportunities!

Check with DbPhoenix before you do this, but one exercise I might suggest to you: Do your S&R prep work in the premkt, and then resolve to watch a single tic chart for a day or two or three. It will be incredibly boring, for good reason: Price will spend the majority of the day where you have no business messing with it. Sit there and watch it tic by tic until one of your levles come into view. Then, watch the show! This will possibly teach you two things: 1) most of time, you should be doing nothing to enter a trade if you are not already in one, and 2) you will only be watching that activity that occurs around levels where the behavior for trades will likely give you clues as to what is most likely to happen next.

That's the best I can do for now, Niko. I have to get to work

Thanks

 

[dbphoenix]

Quote from niko:

Why the short?

Following the drill with supply/demand lines and retracements forces one to abandon his hopes and wishes and what he would like to see happen and what he expects to happen and focus on what is actually happening. This is terribly difficult for some people, but today provided an excellent example of the profits to be made by following that drill.

40d's short, however, provides an example of the next level of observing price movement, throwing off the supply/demand line training wheels and trading what's happening rather than wait for the confirmation of the break of a line. Those of you who've read The Nature of Risk will understand what's going on with this. Nothing is lost and quite a bit can be gained by tucking away a tick chart into the corner of your trading screen to follow the action on that level when price reaches an area where it makes a difference, such as the area that 40d has outlined.

There is also the TICKQ, which is not directly linked to the NQ as are the various bar intervals of the NQ which one chooses to display but which is of the underlying. At some point, one may feel that he needs that extra information, though it may sometimes lead him astray. I don't recommend it to anyone who isn't ready to use it, and really only the individual can decide whether he is ready to use it or not. But it's certainly worth fooling with for a week or two if one finds himself continually frustrated by a seeming inability to see what's going on with regard to this never-ending struggle between buyers and sellers.

Using 40d's and niko's charts, for example, one can see that price has not broken the demand line, but 40d is able to determine to his satisfaction from the tick chart that the probability of such a break is only a matter of time and thus take his short ahead of time and "catch the wave" of those who eventually see the writing on the wall and join the selling spree. If he had also been following a TICKQ chart, he would have noticed on the chart the same weakness that he saw in the double top on the tick chart.

This is not to suggest that everyone begin following the TICKQ. The TICKQ, after all, tracks something different from the NQ. However, if one sees what he believes is an imminent break of a supply/demand line, particularly one which he would use as a trigger for an entry, the TICKQ might give him permission to go ahead and take the trade ahead of that break.

 

[niko]

Quote from dbphoenix:

40d's short, however, provides an example of the next level of observing price movement,

Yep, that is above my understanding at the moment. Another reason to keep on doing this stuff, the challenges seem to never end.