Simplicity in TA
- Thread starter Xspurt
- Start date
NUMERICAL RELATIONSHIPS
This support level is what I have referred to in the tread as a Pop OR Drop level meaning there is a lot of air below and some big action is about to take place. Minor penetrations often result in what I call Emergency Reversals and are fantastic trading opportunities. Really these are no-brainer trades if you are proficient in TA.
As last weekend was a holiday I had the opportunity to do a more in depth review which I don't usually have time for, but that is the way you should prepare your trading. If you are trading the ES or YM or NQ or stocks etc. doing prep work on the cash like this pays huge dividends but I often see traders get hammered because their prep is poor. So what does this strong bounce mean? I am going to a wedding this w/e and hope to get time to look ahead and post next weeks Dow action.
I am (very slowly) writing a few books on "Trading that makes TA Work" with the focus on the trading part rather than the typical TA book's postmortem of a chart which is hard for readers to turn into $$$'s. First learn the postmortem, then learn to make it current and finally project it ahead like I do here.
To help make sure I am making sense to readers (unlike what I hear about Al Brook's 1st book) I decided to mentor a couple of guys (and I am so glad I did). One is as raw as it gets as he didn't know a TL from S&R or a bar form a candle so I get a good check on my communication ability, and especially so after one thread reader pulled me up on not being clear. The other guy has a couple of years experience but was not making the progress he wanted. It's fun watching these guys put the pieces together and it reminds me of how much I had forgotten about what it is like trying to figure this trading thing out. All my prior mentoring was with traders with many years of experience so my communication tended to be at that level. I don't think I would have been as bad as AL Brook's, but then again, hmm...
One of the things I love about the market is the Numerical Relationships. Top & Bottoms are almost always related - perhaps always related if we can understand the language.
Catching the bottom reversal was a no-brainer for a few hundred fast points up. The PA stopped close to the major reversal, the down TL was broken, a pattern balanced on the support level and it was pop or drop time. I had already mentioned that the weekly charts were getting some upside energy so the expectation was good for up if it set up.
You can see on the attached chart the down TL break, the base forming and the move up. The top is related to the bottom and we closed on the mid reaction level. The light gray line is from older charts posted here. We had a nice ABC bounce so are we on the way back up? More later
There is a never ending series of numerical relationships that can discovered. Some are fixed like the percentages here. Others are dynamic and flow with prior PA.
When you know the major stop points it makes life easier and knowing how to see market structures is a big money maker.
Enjoy
Quote from Xspurt:
NUMERICAL RELATIONSHIPS
... I had already mentioned that the weekly charts were getting some upside energy so the expectation was good for up if it set up.
You can see on the attached chart the down TL break, the base forming and the move up. The top is related to the bottom and we closed on the mid reaction level. The light gray line is from older charts posted here. We had a nice ABC bounce so are we on the way back up? More later
There is a never ending series of numerical relationships that can discovered. Some are fixed like the percentages here. Others are dynamic and flow with prior PA.
When you know the major stop points it makes life easier and knowing how to see market structures is a big money maker.
Enjoy
Great chart! I have a question - can you explain how you can see the upside energy forming on the weekly charts as mentioned in your post, possibly with a chart?
Also, on the chart posted, I can see the relationship between the bottom and top moves, I think anyway. The problem for me is I can see two future possibilities that both make sense to me. Based on that chart, I would think a bigger down move is coming, like another 50 point drop. At the same time, I could see price using the area it is at now as support and bouncing a couple of times before coming back up. You said more to come later though, looking forward to it!
Hi Jack, thanks for your comments and I don't mind you asking questions in the thread instead of by pm. However some of your questions are at too high a level for the thread meaning it's going to require a separate thread to build a knowledge base to get to a point where I make sense. You probably ask deeper questions because you have 6 years experience under your belt and can make good observations.
Yes re. the max pullback and reversal you saw me comment on. It was indeed the back test and the wick combination that prevents a full double top pull back, and when this sets up it tends to give a big reversal run. Good observation. (It was also a vibration point, see chart attached). And yes, I always watch time with price as time is often more important. On large moves I almost always trade time and not price.
And yes to your question re. the legs up being the same amplitude as it is a common occurrence just like linear time cycle repetition. So does that mean you can expect repetitive amplitudes or time cycles? Up to a point, yes, but then decay sets in so you need a way to measure that. The simple way is to notice the first signs of weakness such as when bars get smaller and recognize change is in the air which brings me to your last post.
A really simple way to see energy levels is by using an indicator like CCI or stochastics and treat it like a gas tank rather than using the 20/80 line. Remember it is an indicator and not a signaler. Then you can learn to build up a composite picture by using the time frame below and above the one you are focusing on (and I have posted a prior example of CCI in the thread) but the clever part is taking the time to learn how to read it.
There are zillions of relationships going on and once you find a working connection you can extend it to see if you catch a PA set up. Often that is the only way to get a reversal that seems to come from nowhere. For fun and stimulation rather than discussion see the vibration chart attached for something different. It makes use of Time, Space and Price to get start points that begin in space. The 1st contact with price is counted as point 2 so you can trade the next contact as point 3 (whereas with traditional trend lines this 3rd point is point 2, but there is no way to make use of it other than to project a TL for later use which often fails to give a point 3 reaction).
Btw, The horizontals here are 1/3's plus the mid. Gann said the market moves in 1/8's or 1/3's and the last was quarters. If you examine the prior move for which is in use you will find it tends to repeat for a time.
Yes re. the max pullback and reversal you saw me comment on. It was indeed the back test and the wick combination that prevents a full double top pull back, and when this sets up it tends to give a big reversal run. Good observation. (It was also a vibration point, see chart attached). And yes, I always watch time with price as time is often more important. On large moves I almost always trade time and not price.
And yes to your question re. the legs up being the same amplitude as it is a common occurrence just like linear time cycle repetition. So does that mean you can expect repetitive amplitudes or time cycles? Up to a point, yes, but then decay sets in so you need a way to measure that. The simple way is to notice the first signs of weakness such as when bars get smaller and recognize change is in the air which brings me to your last post.
A really simple way to see energy levels is by using an indicator like CCI or stochastics and treat it like a gas tank rather than using the 20/80 line. Remember it is an indicator and not a signaler. Then you can learn to build up a composite picture by using the time frame below and above the one you are focusing on (and I have posted a prior example of CCI in the thread) but the clever part is taking the time to learn how to read it.
There are zillions of relationships going on and once you find a working connection you can extend it to see if you catch a PA set up. Often that is the only way to get a reversal that seems to come from nowhere. For fun and stimulation rather than discussion see the vibration chart attached for something different. It makes use of Time, Space and Price to get start points that begin in space. The 1st contact with price is counted as point 2 so you can trade the next contact as point 3 (whereas with traditional trend lines this 3rd point is point 2, but there is no way to make use of it other than to project a TL for later use which often fails to give a point 3 reaction).
Btw, The horizontals here are 1/3's plus the mid. Gann said the market moves in 1/8's or 1/3's and the last was quarters. If you examine the prior move for which is in use you will find it tends to repeat for a time.
This is ridiculous nonsense, there is no need for all this rubbish. Trading is much much simpler than you portray Xspurt. It looks to me that you are testing to what extent the gullible will follow this crap.
To paraphrase what a wise man once said 'if you draw enough lines on a chart then eventually price will coincide with some of them.'
Quote from Mysteron:
This is ridiculous nonsense, there is no need for all this rubbish. Trading is much much simpler than you portray Xspurt. It looks to me that you are testing to what extent the gullible will follow this crap.
To paraphrase what a wise man once said 'if you draw enough lines on a chart then eventually price will coincide with some of them.'
Jack Hershey Part II lol
Quote from Mysteron:
This is ridiculous nonsense, there is no need for all this rubbish. Trading is much much simpler than you portray Xspurt. It looks to me that you are testing to what extent the gullible will follow this crap.
To paraphrase what a wise man once said 'if you draw enough lines on a chart then eventually price will coincide with some of them.'
Xspurt is a joke.. everyone knows that but his disciples....it took him 500 words just to say NOTHING....
Shoulder confluence preventing price from filling the upside gap.
Pressure is down and will continue down until that resistance can be decisively cleared.
It looks like we are on our way now to completing the white head and shoulders and the battle for its neck will commence between bulls and bears.
Bulls will defend the neck break, bears will push to try to turn it into resistance, should that occur, the bear move would be deadly, otherwise if the bulls succeed defending the neck we will go back up to try to take the right shoulder we were unable to break this week.
It's an upslanted head and shoulders, a cousin of an uptrend channel, with one head fake, it's head, so I wouldn't place all my bets into assuming that the neck will be flipped and broken by the bears, we need to see what happens down there and trade it accordingly before making any assumptions.
No bias is the key.
Pressure is down and will continue down until that resistance can be decisively cleared.
It looks like we are on our way now to completing the white head and shoulders and the battle for its neck will commence between bulls and bears.
Bulls will defend the neck break, bears will push to try to turn it into resistance, should that occur, the bear move would be deadly, otherwise if the bulls succeed defending the neck we will go back up to try to take the right shoulder we were unable to break this week.
It's an upslanted head and shoulders, a cousin of an uptrend channel, with one head fake, it's head, so I wouldn't place all my bets into assuming that the neck will be flipped and broken by the bears, we need to see what happens down there and trade it accordingly before making any assumptions.
No bias is the key.