One Trade at a Time

Quote from Chris_Anonymous:

Could you help break this down for me?
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CA
Yes Sir…..


I can draw them on $NDX.X, which is sitting at 2633.46

Or I can use the QQQ, which is sitting at 64.67

No matter to me – you pick

(I ask because I don't know which is more correlated to the NQ - not that it matters for learning..., but it may make it easier for you)

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As for trend lines, channel lines.. AND so we start off on the same page


You want to begin big picture – then drill down to finally the trading chart

Or

Start at the trading chart – and go big


I strongly suggest the first – but again you decide

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This’ll take some time… and practice on your part… Time to help you develop a feel…. Practice to help train your eye

And you’ll be doing some drills to help

(Just looking for your patience and commitment)

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Also – the proper mindset is important

We’re not out to have price respect our lines – price doesn’t even know we, or our lines – exist


We are out to build context we can trade with in - that is, until our context goes stale


So our goal is to have price acknowledge our lines (this’ll show we’re in sync with price)…., then we can use our lines..., even press against them… at least for a little while

But all the while we must know – at some point price will no longer acknowledges our lines – as it moves on…

So of course then we’ll simply adjust/ redraw our lines… and always use stops to save our capital - for when those times do come

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Tell me which stock symbol to use…where you want to begin… that you’ll remain open minded (meaning our goal is have price acknowledge our lines, not respect them… and be willing to abandon / redraw when price moves on)… and you're willing to do some work (drills)

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On another note

I like your horizontal S&R lines a lot

And I like your trend lines a lot - both capture exactly what we're looking for



My only suggestion would be to copy your uptrend line…., then move “the copy” up…, and to the other side of the PA (IOW on the top side of the same candles) to form an up channel

Also do the same for the downtrend line – meaning;

Copy your down trend line, then move “the copy” down…, and to the other side of the PA (IOW on the bottom side of the same candles) to form a down channel

Get used to doing both please whenever you draw a trend line - copy it and make a channel (it'll help you get good at seeing the channel)

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First installment....

In my view, parallel diagonal lines, (aka a channel), is just as valid for S&R…. as is parallel horizontal lines (aka typical S&R lines)

I use them

They both give us low risk entries..., targets... clues to price's intentions... and more



Good Stuff

RN
 
Quote from Redneck:


Tell me which stock symbol to use…where you want to begin… that you’ll remain open minded (meaning our goal is have price acknowledge our lines, not respect them… and be willing to abandon / redraw when price moves on)… and you're willing to do some work (drills)
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RN,

1. Let's go with $NDX.X. From what I can see it's the most closely correlated.

2. Let's go with the Big Picture and work down to the Trading Chart, like you suggest.

3. I'm more than willing to remain open-minded, although I imagine this will take some time to be consistent with the proper mindset. Nevertheless I will do my best to respect what price is doing rather than what I want price to do.

4. And of course, I'm definitely fine with doing work, drills, practice, exams, homework, quizzes, etc.. As they say, practice makes perfect, or better, or whatever word fits best.

Also, it's good to know I'm on the right track with horizontal lines and diagonal lines. It makes sense to me, but I think it's also good to have others check one's progress.

And with that said, I'm going to begin drawing channels.:D
 
CA

My goal is not to get you seeing a chart / trading like me… it is to get you started on your way to doing both – your way

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Every chart I post will be $NDX.X

At times I will omit the time scale.. and/ or price because – I want to focus on the channels… and not get wrapped around the time frame

And at times it may seem counterintuitive – but it’ll work itself out in the end


Assumptions

Intraday trades taken off the 5 minute
Use the 30 minute for intraday direction

Use another TF for overall trend (and no the actual time frame ain’t a secrete – its like I said, I don’t want your to get wrapped up in the time frame, but instead focus on the channel)

Remember – this is Big Picture first


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Let’s talk about the bigger picture channel – what it is, and what it ain’t

It encompasses PA
It shows the overall trend
But as we know, trends happen within trends… that happen within trends.., that happen within trends… blah blah

And who can say which of these trends will be the one we end up day trading – but we will figure it out…

I don’t think in terms of trading this or that trend… I trade moves… my point is let’s not get hung up the term trend… instead lets build some diagonal context which will help us identify opportunity

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So what we need first is an understanding of a channel

It’ll slant up, or down – depending on PA

It’ll have outer boundaries, and a half way mark (for now)

Seldom will it fit perfect… but it will capture what PA is saying

Within the channel, price will be moving “with” the over all slant… then against it – then back with the overall slant, then against it…. and of course sometime price will move sideways…

Imo people get too wrapped around trying to define “the” trend

I don’t…

If price is moving up – it’s an up move, if price is moving down it’s a down move… and we’ll label the over all trend – either up, or down


Move (trend) defined in my terms

HL’s = up move/ uptrend

LH’s – down move/ down trend

KISS

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Within a channel there will be

With slant moves
Pullbacks
Pivots (either a high or low… and not to confused with normal pull packs)
Ranges (which typically just chew up time until price hits a diagonal line – then price will shoot off)

There will also be smaller moves (trends if you will) both with the slant, and counter the slant – that are very tradable…

btw; Instead of focusing on “the trend” I would rather focus on extracting money from whatever move we can identify – I give a shit what anyone wants to call it

Question – Are you comfortable identifying a pull back/ vs. a pivot… if so cool… if not we’ll talk about it


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Please ask any questions you have

Next two posts will be charts of the over all view

Third post will contain a drill I would like you to do

RN
 
The drill – and I would like to you do it for the next few days… even pull up historical data and use it to do this



On your trading TF chart


For an up move

Throughout the day look for two adjacent candles where the tail of the second candle forms a HL – when compared to the first candle

Draw a 45 degree up trend line connecting the two bottom tails (make sure it is 45 degrees as I would like you to use the same type of line, each time you draw it)

Copy that line.., then move the copy up, forming a channel – obviously you question is going to be; how high up do I move it…. For now I just say – allow price forming tell you that

Just look at it, while price is forming and see what you see… think how you could trade that


Granted sometimes price will bust down and out of the bottom channel line – yeah okay – we’re not there yet (meaning we have not discussed how to identify the intraday move we should be trading)

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For a down move

Do the same as above with the following exceptions

Look for two adjacent candles where the second forms a LH (talking tails remember)

Use a -45 degree slanted line to connect the upper tails

Copy the trend line to form a down channel, then simply see what you see

Two additional charts comming

RN
 

Attachments

The down move


Granted these are prime example, but I never know which move will work.. and which will fail

So identify them all - and erase the ones that fail... lines are cheap

But it also helps to know the intraday slant :)


RN
 

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Quote from Redneck:

Overall zoomed in
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CA

One important note...

Just because the zoomed in over all - has a down slanted channel within the up channel

Please don't think I am biased short

I have absolutely no clue what price will do tomorrow

I always let it tell me - and I tag along for the ride

RN
 
Quote from Redneck:


Question – Are you comfortable identifying a pull back/ vs. a pivot… if so cool… if not we’ll talk about it
More...

RN,

I'm attaching an image of what I consider pull-backs versus pivots just so we're on the same page. If not, let's work on that first.
 

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