Making of a method

Quote from game:

Not sure what is to be illustrated. The commentary is based on the chart posted with the review earlier today, showing entries, S/R, mp, etc. What would I be illustrating on the new chart?
More...

You posted a 1m chart but you're referring to a 5s chart.
 
Quote from game:

The open thrust went to 47.25 and retraced to 46.50 on the 5s. Based on the prep, a long was entered.
More...

Key phrase here being "based on the prep". On that basis, yes, a long was called for. You do see, though, that there were two rets prior to your entry.

Quote from game:

The first significant ret occurred at 0832. It barely crossed the mp zone, with buyers coming in again at this point. Then at 0833 the downward pressure continued with another test of the mp zone. There was no exit made here because of the significance placed on the break of the 50 level and the anticipation of continued momentum.
More...

I don't know what you're referring to by "mp zone".

Quote from game:

Pace next slowed down at the 57 level and an exit was made on the rally succeeding the first selling wave. My next exit was planned if price crossed the SL of 3154. At 0839 price went past this level, but I gave it room. It came back up, but there was no significant buying pressure coming in. At this point, my long outlook started to deflate a bit and the exit was made as price crossed the SL level.
More...

You appear to be going long on this rally rather than exiting. Or are you referring to the 5s chart? If so, it would be helpful if you were to note your trades there.

Quote from game:

I focused on using the mp zone as the next safety level. A short was not considered at 0841/0842 because this was new price territory and I did not have the confirmation of whether the Rev was occurring at an R level. At 0846 price bounced off the mp zone. But then at 0847 it bounced off the short term R level of 3154.25. I exited to become neutral.

Price again bounced off mp zone. But this time I required it to cross the short term R level in order to consider the LOLR as being long. Once price broke this level, I got long on the 5s ret. Buying pressure came in but then quickly fizzled out for an exit.
More...

I'm going to stop here because it seems we're at cross purposes. I can't match your post to your charts. So I'll stick to the question asked regarding positioning yourself in re 48-54, and the answer is you don't "position yourself"; you go long at S and you short at R. If you need any sort of confirmation, then this won't work, particularly if the range is less than a certain width. Instead you have to wait for price to exit the range and trade it as usual.

An exception to this occurs when an imminent move is expected, such as as "the open". Here you could buy support in the pre-open range and just hold on to it. If price then breaks out, you're already in. If it doesn't, just exit as usual and either stand aside or go short.
 
Quote from dbphoenix:


I'm going to stop here because it seems we're at cross purposes. I can't match your post to your charts. So I'll stick to the question asked regarding positioning yourself in re 48-54, and the answer is you don't "position yourself"; you go long at S and you short at R. If you need any sort of confirmation, then this won't work, particularly if the range is less than a certain width. Instead you have to wait for price to exit the range and trade it as usual.

An exception to this occurs when an imminent move is expected, such as as "the open". Here you could buy support in the pre-open range and just hold on to it. If price then breaks out, you're already in. If it doesn't, just exit as usual and either stand aside or go short.
More...

Sorry about that. Here is an updated chart.

http://www.sierrachart.com/image.php?l=1378753401635.png
 
Quote from dbphoenix:

So I'll stick to the question asked regarding positioning yourself in re 48-54, and the answer is you don't "position yourself"; you go long at S and you short at R. If you need any sort of confirmation, then this won't work, particularly if the range is less than a certain width. Instead you have to wait for price to exit the range and trade it as usual.

An exception to this occurs when an imminent move is expected, such as as "the open". Here you could buy support in the pre-open range and just hold on to it. If price then breaks out, you're already in. If it doesn't, just exit as usual and either stand aside or go short.
More...


I recall you saying that entries back into Range have very low price risk but very high information risk.

So I assume that the only good reason for trading back into a range would be if the information component is being derived from larger context factors, i.e. a trader bets that the range will hold because of x,y,z...Ex: If a breach outside range R is brought back into range with force, the trader justifies an immediate Reversal short. The only information provided here was the immediate rejection of the breach back into the value zone and the fact that the breach was above a range (which automatically implies that this price area has attracted sellers in the past).

Edit: I guess a breach that was rejected would not be a 'context' factor, but rather information dervied from the immediate PA. But my question about gleaning information from context to determine if the Range will hold still stands.

Edit 0249 CST: I think you already answered this question when talking about the exception via imminent moves. Got it. Thanks.
 
Quote from game:

I recall you saying that entries back into Range have very low price risk but very high information risk.

So I assume that the only good reason for trading back into a range would be if the information component is being derived from larger context factors, i.e. a trader bets that the range will hold because of x,y,z...Ex: If a breach outside range R is brought back into range with force, the trader justifies an immediate Reversal short. The only information provided here was the immediate rejection of the breach back into the value zone and the fact that the breach was above a range (which automatically implies that this price area has attracted sellers in the past).

Edit: I guess a breach that was rejected would not be a 'context' factor, but rather information dervied from the immediate PA. But my question about gleaning information from context to determine if the Range will hold still stands.
More...

There's no certainty here. And really the only reason for trading within a range is if you just can't stop. When I find myself in a range, I lift my fingers from the keys and contemplate the mysteries of life. Wyckoff took entries in the range if he saw that it was about to resolve itself, as in the example I gave regarding the NY open. But that was Wyckoff. I'm not Wyckoff.

Another problem with trading ranges is that once they become obvious and therefore tradeable they evaporate, and one is left holding the bag. And how many points are they worth anyway?
 
Quote from game:

I have not backtested the hinge pattern. But I have backtested S/R levels. The trade would be based on the S/R situation more than the pattern.

The aggressiveness would be based on the view that pressure is building up at confirmed/tested R. Thus, any break of the hinge would not only be a move from immediate value area, but also from a longer term boundary level.
More...

Thanks.
 
You must log in or register to reply here.
Back
Top