Price Action - NQ

fortydraws said:
Holy smokes, DbPhoenix, I thought that place was dead out of business. I tried to visit a few weeks ago and kept getting a "check the url" message.
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It's pretty much a ghost town, which is what prompted me to put the SLA/AMT in pdf form. I warned people long ago to take whatever they wanted before it winks out. But maintaining focus here is extremely difficult when trying to "teach" something, and I'm still a moderator there. I don't have to worry about alligators and kudzu.
 
dbphoenix said:
If by hourly time frame you mean the 60m bar interval that you illustrate in the first chart in your post, I don't do any of that, except for the last hinge you have drawn. But there is no "correct". If you find doing all that helpful in order to familiarize yourself with the territory, then do it. What I look at it is illustrated in the most recent series of posts at TL (the first five charts). Right now, for example, all that matters, at least to me, is that we're trying to get past the November high. If we do, whatever happened to get us here will be old news.
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For instance, if I were looking at the timeframe you're looking at, January (though this year), I'd approach it this way, first with the weekly in order to place the daily, then the daily in order to place the hourly:

upload_2015-2-16_19-15-20.png


upload_2015-2-16_19-15-42.png


On the basis of this, I'd want to know what traders are doing at and around 4200. I wouldn't be interested in anything else.

However, the chief purpose of observation is to determine just what it is that will be helpful to you to understand price behavior, not solely to zero in on whatever will enable you to make a trade. This is a point that is ignored by nearly everyone.

Take, for example, a first trip to Europe. The first-time traveler is probably going to spend tons of time reading about the places he's going to visit, hotels, restaurants, museums, when things are open and closed, buses, trains, rental cars, currency, visa requirements, etc, etc, etc. But after he's been a few times, he's more likely to just book a flight and go and fool with all the rest of it once he gets there. All of that preparation generates confidence. Same with the observation phase. Without that confidence, one is so fearful that he can't appreciate what's going on around him. In that respect, I suppose the guided tour is analogous to the trading room.
 
January 28th

Premarket (1hr)

NQ 03-14 (60 Min) 28_01_2014.png


1m (part1)

NQ 03-14 (1 Min) 28_01_2014 part 1.png


1m (part2)

NQ 03-14 (1 Min) 28_01_2014 part 2.png


This day the Price Action developed within the ON range, and was pretty choppy
 
February 3rd

Premarket (1hr)

NQ 03-14 (60 Min) 03_02_2014.png


1m (part1)

NQ 03-14 (1 Min) 03_02_2014 part1.jpg


1m (part2)

NQ 03-14 (1 Min) 03_02_2014 part2.png


1m (part3)

NQ 03-14 (1 Min) 03_02_2014 part3.png


PS(I didn’t observe January 31st, because the market replay only let me see it until 2 am or so, therefore I skipped this day)
 
For today I just want to post some activity I did this morning and repost some information that i think is valuable and I want to keep it my thread

1)

Hi Db, I know I am in the observation phase but I fell in the temptation to trade today and I found it very interesting. I would like to know your opinion regarding the next chart. Especially the point 3

NQ 03-15 (1 Min) 23_02_2015.png



Db answer: "Well, here we get into personal preference again, not dogma. I prefer not to take trades that are re-entering the range because they tend not to have much going for them, and I don't like scalping, However, this is something you'll have to test then decide whether or not to pursue it. It's easy enough to test."




2) Posted on Observations an example by 40D

"'ll be honest. I do not know what to make of the activity since the 35.50 to 43 run. I covered enough to make me happy on the way down, and there is no reason, as I see it, to do anything but to stick with my original plan which has me with a 1 point stop loss and a 12 point profit taking limit order on the remaining position. Total remaining risk is only $200 and I took far in excess of that already, so I'm going to let my bracket orders take care of the rest and as I leave for a late lunch with my wife.

Here is the chart cleaned up so as to show my original plan per my plan red = short entry; black = stop loss; blue = profit target

Scale outs are prior hinge midpoints and range midpoints (shown in previous charts).

index.php



"Didn't even get out the door and the trade is obviously done. I'm finished for the day, but anyone following along, here we are, at the top of the range - this is when you should stop reading trading message boards and start really focusing your attention on what price is doing and what it does from here."

"These are the moments from which a trading plan may be born - if price moves higher, what indications did it give that this was likely. If price again fails to move higher, what indications does it give that that was likely? Down the road, it is observing these moments that will allow you to know what will make you get short, what will make you get long, where to place your stop, where to scale out and take profits. I plan my entries around the extremes because it allows me to enter my whole position at once with a very small risk, and then to scale out in pieces while maintaining usually half the position as a core to hold to the other side of the range."

40D
 
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