Observations (an example)
- Thread starter fortydraws
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That's a nice thread also for anyone interested. Doesn't take long to grasp the concepts.
Maybe you should see if kp can do a sitalong with her to work on get step one
Funny enough, my son, who is also 9, came into my office when I had the picture of the "find the range" boy. He asked what does "find the range mean?" I said, well you know what a graph is from school, right? Well this chart is a graph of prices that people have bought NQ's for. The range is all the prices between the highest price someone paid and the lowest price someone paid. I asked him if he could find the range. Sonofagun, don't you know he got it right on his first try
Of course, he is almost 10. I asked him if he wanted to learn about the mean, but he said no, he wanted to get back to his Minecraft game. Kids!
forty, you mentioned in the House thread that perhaps better than half of your trades are entered from a recent prior daily hi or daily lo.
Are you referring to the recent prior daily hi's & daily lo's of the NY RTH? Or, daily hi's & lo's of the 24 hr trading period? Or both?
Do you maintain these recent prior daily hi & lo levels only until price easily passes through them, or do you maintain them for some minimum period of time regardless of price having passed through them? In case of the former, does it make a difference to you whether the breach of the recent prior daily hi or lo was in the premarket or the RTH?
Thank you. Ged
Are you referring to the recent prior daily hi's & daily lo's of the NY RTH? Or, daily hi's & lo's of the 24 hr trading period? Or both?
Do you maintain these recent prior daily hi & lo levels only until price easily passes through them, or do you maintain them for some minimum period of time regardless of price having passed through them? In case of the former, does it make a difference to you whether the breach of the recent prior daily hi or lo was in the premarket or the RTH?
Thank you. Ged
For today, for example, as of 8:15 AM EST, yesterday's high and the overnight low form the range on which I am going to focus. I am also going to watch the level where we are seeing a potential double top failure a few points below yesterday's high.
Each day, I track the day's RTH high and low, and these levels stay on the chart until the trend changes (right now the trend is up, through January the trend was down - as the trend turned up and price traded through the January levels, those levels were replace with the new information.
If the overnight range falls inside the prior day's range, I give the prior day's high/low more weight. If the overnight range exceeds either or both of the prior day's high/low, I give the overnight extreme more weight.
The most weight goes to what is actually happening: For example, the potential failure to reach yesterday's high on a second attempt is going to be more important to me right now than the fact that yesterday's high is yet to be tested (after all, it may not be tested today, or even this week if the market breaks its stride for a rest or a reversal).
Each day, I track the day's RTH high and low, and these levels stay on the chart until the trend changes (right now the trend is up, through January the trend was down - as the trend turned up and price traded through the January levels, those levels were replace with the new information.
If the overnight range falls inside the prior day's range, I give the prior day's high/low more weight. If the overnight range exceeds either or both of the prior day's high/low, I give the overnight extreme more weight.
The most weight goes to what is actually happening: For example, the potential failure to reach yesterday's high on a second attempt is going to be more important to me right now than the fact that yesterday's high is yet to be tested (after all, it may not be tested today, or even this week if the market breaks its stride for a rest or a reversal).
Q: Forty, what do you do on days like this. How do you avoid getting chopped to pieces?
A: For me, per my trading plan, not a trade to be had ...
A: For me, per my trading plan, not a trade to be had ...
More people are scalpers than they themselves realize. They can't stand the wait. Not that scalping's a bad choice. I just happen to be bad at it. But one needs at least to be honest with himself and at the very least learn the wizardry of the stop limit entry with an automatic stop, then clean and lube his bike chains and get some exercise.
Given the unwillingness of price to stray very far from the mean of this range, any trade there has, imo, no edge as to its actually reaching one or the other extremes. Eventually it will reach one of those extremes, and there I will find a trade, either a breakout/retrace or a reversal to the other extreme. Step One: Identify the range.
Actually, here is an interesting little piece I picked up somewhere. Not sure where I read it ...
First, find a range, preferably one with an easily determinable upper and lower limit.
Second, determine where price is within that range.
Third, locate the extremes. If you have a range that is wide enough for you to trade (that is,
there are enough points from top to bottom to make a trade worthwhile) and price is at the
bottom of that range, there is a good possibility for a long. If price is at the top of the
range, there is a good possibility for a short.
At this point, you have three options: a reversal, a breakout, or a retracement. If, for
example, price bounces off or launches itself off the bottom of the range (support), trade
the reversal and go long. If instead it falls through support, short the breakout (or
breakdown, if you prefer). If you don’t catch the breakout, or you prefer to wait in order to
determine whether or not the breakout was “real”, prepare yourself to short whatever
retracement there may be to what had been support and may now be resistance.
Some might mistake it for a trading plan of sorts.
Although defining the range can be problematic, which is where "judging the market by its own action" becomes important. Today, for example, price clearly chose 86 to be the upper limit, and that fail at 1050 would have been a good entry. However, the trader would have to be willing to place a stop, mental or otherwise, at the danger point, which in this case would be no lower than 87. This would be unacceptable to nearly everyone.
But, whether or not one takes the trade, AMT has done what it's supposed to do. What one does about yet another test of 76 is another subject.
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