Son of If You Can Draw a Straight Line . . .

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Quote from llIHeroic:
Can you elaborate further on the difference in function between diagonal trend/directional/consolidation lines, and to the fixed points of Support and Resistance that we perceive? You begin with diagonals to get a general sense of influence on price, identify points of Support and Resistance, and then what is the following process that occurs in your mind? It is this process in my own mind that seems to need modification.
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A trend channel has little to do with support and resistance since trendlines don't provide it. The trend channel tracks the stride of price around a mean, at least according to auction market theory. Once price reaches one or the other of these extremes, it will reverse back toward the opposite extreme unless traders seek a different value range, in which case the trend will change and a new mean will be created. So far the trend has lasted four years.

As for the process, this is addressed at the beginning of the thread and again throughout.

Quote from llIHeroic:
Also, thank you for clarifying to me the incorrect usage of the hinge. I feel as if I was partly correct in making the statement that this structure will force price to a decision soon, which will create increased movement, which is similar to what I've read and perceived happen with the classical hinges that you've referenced. I knew the lines on the SI chart weren't the standard hinge, so I referred to it as a vague one. Can you use this opportunity to inform me of any additional implications that the real hinge is capable of, as opposed to this false hinge that I have referred to?
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If no elaboration is forthcoming from anyone (I don't have time to look for the posts), do a search using my name and "hinge". You'll find more than you want to know, with charts.

Quote from llIHeroic:
Lastly, I've attached a chart with the largest scale lines that I had been factoring into my analysis of the opening price movements in the NQ yesterday. It seems that this blatant misjudging of the long standing trend channel was the primary factor which caused me to fail to perceive the clear strength of the Resistance and subsequent downward pressure on the movement throughout the day.
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When I use "long-term", I'm referring to the trend from '09. Nonetheless, one can use much shorter frames of reference if he is interested primarily in the immediate trend of the market. In any case, none of this has much to do with the specific point of entry or the management of the trade, as I posted again yesterday. It does, however, provide needed context, so that one isn't trading with a penlight in the dark. Again, many examples of this are provided in the thread, with charts.

As for your trend channel, the upper line is drawn incorrectly. It begins at the first swing high between the two swing lows. In this case it doesn't matter because the slope of the line would be the same either way, but it helps to draw them correctly as a matter of course. Your "midpoint" is also off. The mean is of course the center, midway between each extreme. Instructions for all of this can be found at the beginning of the thread.
 
SLV is shown here. I have on purpose removed some supply lines to focus a bit more on what price actually is doing instead of getting lost in the lines. Lines are awesome for trade management and even before but one can't overly rely on the lines to make all the decisions. At the beginning of this thread it is shown that one can use the lines to survive, and I totally agree with that statement. Lines have corrected my direction more often than not, and I use them quite extensively. What I don't do is become a prisoner of these lines. Perhaps those who are newer might need the lines to keep them focused, but after a while even though the lines are on the chart, it's the price action itself that's the real deal, and the lines are like the very talented and useful backup singers.

So the tight closes are the focus today. Why is price closing so tightly? Isn't it a bit unusual that something like this would happen? For some reason I keep remembering the Reminiscences of the Stock Operator by Livermore. He mentions a few times when a group or syndicate would gather and support a level and won't allow the price go too much beyond a close band. Whenever price is dropping they buy and when supply is exhausted and as a natural consequence price starts to rise the syndicate would post offers to ensure price doesn't just shoot up. This goes on until the required line is accumulated.

Now, here I must be clear that we don't really know whether it's accumulation or distribution that's going on. We don't even know if anything at all is going on for that matter. But, the tight closes are somewhat intriguing, isn't it? What can we do about it? Can we profit from it? Perhaps yes. Usually, if it is an accumulation or distribution and when the required lines is accumulated or dumped, an energy is released and price is allowed to go unimpeded. We could stay alert to that happening, even though there's no certainty that will happen. All we can do is act on the behaviour we see. Price is moving in a very tight range and sooner or later it's going to exit that range. Either it will be a clean move or a fake and price could go the other way. We don't know what's going to transpire, but we do know that we'll be there ready to pounce on the opportunity when that happens, and to capitalize on it by hopping on the elephant when it starts to run.

SLV Daily:

attachment.php


Another interesting thing to note is the price drop from around 24 to 21 is about 50% of the price run from 18 to 24. Price hangs in a balance.

Gringo
 

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DB and Huyang,

Thank you both for taking the time to respond to my inquiries, although I feel undeserving of the effort you've put forth to re-iterate the information that I have an incorrect perception of, even though it is readily available in the introduction of the thread. I am disappointed that I have not put in the time and effort required to develop a competent grasp of these fundamentals.

I will go back and study the materials in the beginning of the thread, at TL, and in the Wyckoff course once again, in addition to the readings on hinges, and return when I feel that I am able to engage in the discussion in a constructive manner. A contributing factor may be that I have been reading the subsequent discussions of these concepts for so long that some of the basic principles have faded from my mind.

Please accept my apology for reverting the conversation to topics that have already been sufficiently expounded upon.
 
Quote from llIHeroic:

I will go back and study the materials in the beginning of the thread, at TL, and in the Wyckoff course once again, in addition to the readings on hinges . . .
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Actually the thread isn't about Wyckoff per se, though anyone wanting to pursue that course of study is encouraged to do so. Rather the thread is about drawing straight lines as explained in the first three and fifth posts. The purpose of the lines is to corral the focus, deflate the ego, and enable the trader to trade price without a lot of -- or any -- overthinking and micro-management. It is obvious after 1500 posts that this presents considerable difficulty for many people. But that lies not with the approach but with what the individual brings to it.

This is, after all, just a simple approach to trading price. It's not therapy. Those who approach it in order to prove to (*) that they're not such losers after all, or who approach it as flagellants, or who race toward it like Daffy Duck in Ali Baba's cave will not likely find success here. Ordinary folks, however, who are not afflicted with excessive testosterone levels or out-of-the-ordinary neuroses or psychoses and who are willing to submit themselves to the currents of the market may just find themselves picking up some change.
 
Quote from Gringo:

Now, here I must be clear that we don't really know whether it's accumulation or distribution that's going on. Another interesting thing to note is the price drop from around 24 to 21 is about 50% of the price run from 18 to 24. Price hangs in a balance.
Gringo
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Gringo:
It seems that likely accumulation is going on to test 22 and it may go down again before going up but i am new to price and vol thing, so likely my understanding is incorrect.

weekly: http://i.imgur.com/1y5ibLT.jpg
daily: http://i.imgur.com/JuDOvdg.jpg

llIHeroic:

i was just sharing with you what i may know, considering even after you find it drawing a channel in the first 5 threads, you could use the chart to check your understanding. I learned by asking all kinds of different questions and am new to Wyckoff material. Good luck with your learning.
 
Quote from Gringo:

Now, here I must be clear that we don't really know whether it's accumulation or distribution that's going on.
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How many shares outstanding?
 
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