Making of a method
- Thread starter game
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You need to understand that the market makers don't give a flip about your overnight analysis. There is a Gap in the RTH and the first order of business is to see if it holds. Unless you come flying out of the Open away from the Gap you have to be very mindful of a Gap fill early in the Session.
Price is an output of the market process but also an input. After all, why do you need to look at lines on a chart? Gaps matter to you because they matter to most participants on a volume weighted basis. Here is a gap study that may help you understand the probabilities of a gap close each day, and thus why people care.
http://www.mypivots.com/article/details/43/fading-the-gap
Note that the smaller the gap the greater the probability of a fill. Furthermore a gap near the Daily Pivot has an even higher probability of filling.
The price formation ahead of the open is related to a treasury market news event at 0800 CT. As such it is not particularly informative in the higher time frames. The failure to close a small RTH Gap just below the Daily Pivot despite clear effort at the Open is much more informative given the location of the Open, particularly when followed by a Held Bid event at the Daily Pivot.
Thanks for taking the time to share that. Yes, I agree that the market seems reflexive, in that, just as behavior prints price, price also influences behavior.
My trading plan is based on trading aggregate behavior (PA) within the context of trend and S/R. While additional information (like the gap study link you provided) may make this context richer, the focus at this stage of my learning is to gain clarity with what I already have - namely, S/R, trend and supply/demand.
Going into pattern stats without understanding the theory behind their formation may be a slippery slope from causation to correlation to curve fitting confusion.
I prize developing a robust approach with an evergreen edge. I am trying to keep things as simple as possible in the hope that I may absorb the principles down to the core.
you realize that the market is designed to fool us,like a magician,slight of hand,the largest pools of money don't want you or a pack of wolves to see their hand, so, much like a woman, their only defense is to decieve you,again ,much like a woman, there is very little clarity when trying to understand thru a direct logistical attack, the leftover options are to summarize facts and sort thru as true or false, and what you may have picked up thru osmossis(whatever got past your logic fence)..the only clarity to lean on with some certainty is suport and res as they are plotted on a chart,you dont know if they will reach or hold those points but they a large percentage of the time do, the next step is to read which point it will reach next.you have to somehow adapt your thinking to the markets behaviour rather than only allow what fits with your way of thinking..all sounds like mumbo jumbo other than s/r and it may be, ...just food for thought