Price and Volume

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No one but a floor trader should always be in the market. Those who trade from the tape in an office should assume a neutral position frequently. They should not delude themselves that they can anticipate everything that happens in their favorite stocks. They should take vacations from the tape varying from a walk around the block to a trip into the country for a week or two.

A neutral position clarifies the mind.

Trading should never become a habit (like smoking cigarettes) so that you've simply got to satisfy that craving to jump in and out. Such a practice warps the judgment; eagerness to trade supplants deliberation.

-- Richard Wyckoff
 
db,
On your chart for today, I was wondering if it is significant to not draw your supply line, starting at the last reaction lo, and carry forward from there?

Possible answer is, you're being strict on H/H directly after the L/L?

Even so, it seems like the common price points would be important in the whole P/V, S/D, S/R mechanics.

I drew a line on your chart, to show what and where I'm talking about.
 

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Pretty damn sharp, sulong, pretty damn sharp. You've been paying attention. :p

Drawing a horizontal underneath that 1010 swing low can give you some advance notice of potential action when east meets west, i.e., when price drops to the 1050 low and bounces to the then-drawn DTL.

Personally, tho, I'd make that a separate little line. I wouldn't create a supply line that stretches all the way across the chart, mostly because the price has at that time not yet started to base. Does that make sense? Granted we're only talking about a tick's difference, so who cares? But there may be two different dynamics going on.

In this case, of course, volume really didn't provide any supply clues, so it's difficult to claim that price found resistance at supply. In this case, it more likely found resistance at the farthest reach of apathy. But it pays to do this stuff every day anyway so that you don't have to think about it as much in real time, when it counts.
 
I wouldn't call it confusion. You may be right. Even though I've tried to keep posts to a minimum so that newcomers can get through them without too much of a slog, there are things that will get missed and that should be re-emphasized as the occasion demands. One of those things is the idea of zones rather than lines. If one were to think of your line and mine as both part of a zone, then perhaps the dynamic would be clearer, and any concern about which one was "right" would be set aside and not allowed to interfere with whatever the trading strategy might be.

I don't know if drawing zones rather than lines would make things clearer or more confusing. I do know people who will consider a TL broken if they were to draw it with a thin lead but unbroken if they were to draw it with a thick lead. That's the kind of inappropriate attention to the wrong kind of detail that should be avoided.
 
db wrote," if anyone else sees anything don't be shy"



Well on the NQ anyway , the last 3 days , volume is increasing a little and price range has gotten smaller.

erie
 


I've mentioned that in passing a couple of times, mostly in regard to WRBs, but haven't gone into it in detail yet since there's no rush. But there's a whole dynamic with regard to energy and force and resting and so on. Sometimes, of course, price goes nowhere because nobody's trading.

But there are waves between compression and expansion, trending and oscillation, interest and apathy. The old ying and yang thing. The gurus try to make a big deal out of it with their NR4s and NR 7s and NR9s and try to impress their subscribers with this new idea they stumbled across. But it's just a variation on rest and motion.

There's also the holiday to consider. We could have a great day or a big snore. We'll see in seven hours.
 
To achieve a state of objectivity you need to operate out of beliefs that allow for anything to happen, as opposed to beliefs that allow only for the market to express itself in a limited fashion. If you operate out of a belief that anything can happen, then whatever does happen won't be threatening to you in any way, thereby causing you to avoid or distort certain categories of market information. Any limits you place on the market's behavior will be a compensating factor for your lack of trust and confidence to act appropriately in any given situation. This will be evidenced by the fear, stress, and anxiety that you will feel when the market expresses itself beyond your mental limits and you can't do anything to control the situation.

However, you do have to have some belief or expectation about the future or you wouldn't ever put on a trade in the first place. To be objective, you will need to release yourself from "demand-backed expectations" and make what I call "uncommitted assessments of the probabilities," . . . which simply means that you have no commitment to any particular outcome. You just observe what is happening in each moment as an indication of what will probably happen next.

-- Mark Douglas
 
Several of you have asked me via PM about books and have learned of my enthusiasm for Justin Mamis. Others knew about it already (he gave me the idea for the AVDVd).

I started the thread below to call attention to the changes he's had to make in his methodology due to changes in market dynamics. Those of you who are Mamis fans, or are reading his books, or are thinking about reading his books, will find it interesting.

http://www.elitetrader.com/vb/showthread.php?threadid=30983
 
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