Simplicity in TA

[dv4632]

Thanks X,

What I did was take the upper wedge line and get its approximate value for today. I drew it on the intraday chart as a horizontal line (since it's derived from the daily chart, it will be the same price all day). Then I was simming it on YM trying to play bounces off the line.

I went short just after 13:00, long on what looked like BSOT's at 14:15 and 15:00, then short the 123 pattern into the close for my only winner!

 

[Xspurt]

Quote from dv4632:

Thanks X,

What I did was take the upper wedge line and get its approximate value for today. I drew it on the intraday chart as a horizontal line (since it's derived from the daily chart, it will be the same price all day). Then I was simming it on YM trying to play bounces off the line.

I went short just after 13:00, long on what looked like BSOT's at 14:15 and 15:00, then short the 123 pattern into the close for my only winner!

Put arrows on where you traded and tell me the signal you used to enter the trade so I can give you a fix.

 

[dv4632]

I was just using candle breakouts on the first three. For example on the first short, I entered short (in YM) when price traded below the low of the bar that touched the line. I exited when the bull bar broke above the mini-double bottom (or lower timeframe 2B) for a few ticks loss. My bad on the next two longs as my read of things said there might not be much gas left in this thing, so should have stopped at breakeven instead of letting them go to small loss.

The only one that had a valid setup was the fourth one, which was a 123.

 

[Xspurt]

Quote from dv4632:

I was just using candle breakouts on the first three. For example on the first short, I entered short (in YM) when price traded below the low of the bar that touched the line. I exited when the bull bar broke above the mini-double bottom (or lower timeframe 2B) for a few ticks loss. My bad on the next two longs as my read of things said there might not be much gas left in this thing, so should have stopped at breakeven instead of letting them go to small loss.

The only one that had a valid setup was the fourth one, which was a 123.

Ok you are trading after the short took off and scalping minor swings with a lot of problems in your technique.

Take a look at the pink horizontal scalp lines on my last 60m chart. These are instant eye catcher no-brainer levels. I don't need to calculate anything and I know these are important reversal or continuation guide lines.

Now look at your 5m chart and put a horizontal on the mid of the big red candle and see what happens. This is where the big money is more likely to be waiting. Can you see that?

If you believe in the set ups you were using then the low of the day is a screamer set up and from that the mid of the big candle is a great target. To me your minor swings are high risk set ups that need a lot more evidence to get my attention. Use the trend line with the stronger S/R

See attached...

 

[achilles28]

Quote from Xspurt:



Now look at your 5m chart and put a horizontal on the mid of the big red candle and see what happens. This is where the big money is more likely to be waiting. Can you see that?

Two steps forward, one step back...?

 

[dv4632]

Quote from Xspurt:

If you believe in the set ups you were using then the low of the day is a screamer set up and from that the mid of the big candle is a great target. To me your minor swings are high risk set ups that need a lot more evidence to get my attention. Use the trend line with the stronger S/R

Point taken on the low of day signal. I did not know about using big candle midpoints as S/R. Had I known about that I may have taken that one. Even without that it's something I should have spotted on my own. My bad there.

I still don't see how my first short trade is especially high risk. It had backtested a recently broken trendline from the daily chart and appeared to roll over. If it went down from there everyone would call it a perfect technical short trade.

I agree the two longs were high risk, my bad again. The last short looks good, just a little late on the entry.

I will have to give this some more thought.

 

[jack411]

Quote from dv4632:

Point taken on the low of day signal. I did not know about using big candle midpoints as S/R. Had I known about that I may have taken that one. Even without that it's something I should have spotted on my own. My bad there.

I still don't see how my first short trade is especially high risk. It had backtested a recently broken trendline from the daily chart and appeared to roll over. If it went down from there everyone would call it a perfect technical short trade.

I agree the two longs were high risk, my bad again. The last short looks good, just a little late on the entry.

I will have to give this some more thought.

Hey Dv,

I can see that 1st short being a scalp (1st red down arrow on your chart you mean, right?). IMO, I think the huge red candle is what makes it more high risk and only a scalp. It looks to be climactic selling. Then price reversed back up right after. This could mean a change in sentiment, that bulls may be in control now. I'm not sure what you mean as far as appearing to roll over on the daily chart though. Based on the charts you have posted, it looks like the daily would have been right at support re-testing after breaking above your TL a few days ago.

My read could be off though. We'll see what X says.

 

[dv4632]

X, do you consider the blue trendline here to be of any interest?

It's interesting that the SPX hit that trendline in late February and then broke above it shortly thereafter. But the Dow has still yet to hit its corresponding trendline (though March 16 was ~25 pts off so probably close enough to call it a hit).

Right now it looks like the Dow had an overshoot of a rising wedge, fell back into it and on Friday tested the lower limit of the wedge. Where does that leave us now? If I put on my market analyst hat it looks to me that as long as the SPX is holding above it's blue breakout level then it's still full bull and no reason to exit long positions. Am I right?

 

[Xspurt]

Quote from Xspurt:

The Dow looks bullish here popping out of the wedge but I want to look for a short as I think this is as real as the FTSE's break. Two weeks back I said I wanted short we got 200+ drop in a day into the wedge base with a clear reversal set up.

Since that we have 7 consecutive up days and Gann would place a stop under the low of the 7th day and every higher bar bottom. I like to use the idea more as an alert and look for a reversal signal rather than stop out.

The Dow doesn't show any resistance that I can see in a quick analysis so I am using the FTSE as a guide.

I like the daily and the 4hr cycle for an attempt to the downside so let's see how we go. The 60m pattern usually has a drop, pullback and then the real move but this is a less reliable read over the weekend when there is a bigger chance of a gap opening.

The selling volume on Friday was very heavy and I like the look of that.

Everything worked perfectly for a 200+ point short including the prediction for the 60m top.

The Dow once again fell to the rising wedge base and gave a great double bottom and buy signal on the 30m. I am now reversed long and protected by the wedge base.

I only had 10 mins to take a quick look at this week's action and it while it looks simple on the daily there is a lot more going on from what I see at a glance.

For a start popping out of the top of the wedge can cause a sideways pause and new pattern to develop that is more complex. Of greater interest is the 2 day chart that is looking like signaling a move similar to the 60m prediction meaning this move up will fail and a much bigger move will set in.

For now the base is giving the direction and I will attempt to get a chance to do a more in depth analysis before the week's out.

Attached is the daily and hourly which gave easy trades all seen in advance.

 

[Xspurt]

Quote from dv4632:

X, do you consider the blue trendline here to be of any interest?

It's interesting that the SPX hit that trendline in late February and then broke above it shortly thereafter. But the Dow has still yet to hit its corresponding trendline (though March 16 was ~25 pts off so probably close enough to call it a hit).

Right now it looks like the Dow had an overshoot of a rising wedge, fell back into it and on Friday tested the lower limit of the wedge. Where does that leave us now? If I put on my market analyst hat it looks to me that as long as the SPX is holding above it's blue breakout level then it's still full bull and no reason to exit long positions. Am I right?

The blue lines are structural lines and will give trade opportunities but they are likely to lose influence because of prior violations. Personally I wouldn't read the blue lines as the bull market lines. Doesn't mean you can't make them work for you as such.