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

[game]

Quote from niko:

After reviewing the day I am not so sure about the 3rd and 4th trades as I was in the chop, although they were not losers I think the fact that price made a LH below the bottom of the premarket range and just after making a HL after 10:00 was an indication.

Now if I don't take the third trade I don´t have a way to take the short on the plunge as the RET occurs before the bottom of the range is broken

I would suggest that instead of assuming that every point between two swing zones is chop, you pay attention to the quality of movement between those zones.

Do you see a marked difference in compression between the 2nd and 3rd short?

What about the context? The second short is triggered as the Reversal of the bigger down move from 3348 fails. It's an opp to join the weakness at a low price risk point. But what is the 3rd short betting on? There is tested R above and tested S below. So why short?

 

[slugar]

There were a lot of lines today but depending on your method there were some trades today and the lines kept you on the right side of the trend even though most were short lived!

 

[niko]

Quote from game:

I would suggest that instead of assuming that every point between two swing zones is chop, you pay attention to the quality of movement between those zones.

Do you see a marked difference in compression between the 2nd and 3rd short?

What about the context? The second short is triggered as the Reversal of the bigger down move from 3348 fails. It's an opp to join the weakness at a low price risk point. But what is the 3rd short betting on? There is tested R above and tested S below. So why short?

I am in the process of adding context, I restarted the whole thing (Currently focusing on lines and RETs) in order to find out what was I missing, thanks for your comments they will be taken into account.

Regarding your question the second short was pointed out because the line was broken and there was a RET.

Now as you point out, there is compression, that was not the case in the second short, and one could argue the third short was taken within the context of a hinge, not a very good idea.

 

[niko]

Quote from slugar:

There were a lot of lines today but depending on your method there were some trades today and the lines kept you on the right side of the trend even though most were short lived!

Looks good from here, you should also think about tightening your lines when price movement turns parabolic, or else your line will be broken after the RET.

 

[slugar]

Quote from niko:

Looks good from here, you should also think about tightening your lines when price movement turns parabolic, or else your line will be broken after the RET.

Thanks Niko I noticed that after I printed out the whole day

 

[niko]

Quote from dbphoenix:

For those who are interested, these charts will provide a visual to what was posted last Friday. If you haven't printed out those posts, or at least the latter one or two which include the entire sequence, I suggest you do so.

Unless you never opened a chart until last Friday, you know that the monthly is up, the weekly is up, the daily is up, and if you can tell up from down, you know that the hourly is/was up, unless you began trading at midnight, but that's not the focus of this exercise. By 1500 (all times are EST, regardless of what's on the chart), price had reached 3208 (all prices are +/-; this isn't math class). Why did it stop there? Because sellers ran out of buyers. That's all one needs to know. It then dropped to 3176. Why did it stop there? Because sellers weren't willing to sell for anything less. And that's all one needs to know there. If one had been trading this all night, the DLs that bigmoose drew would have been accurate. However, otherwise they are not necessary. Price is/was nonetheless rising. Or had been.

Which brings us to this hinge that so many have drawn. The "hinge" is not really a part of this. Nonetheless, this is not a hinge since it is not "filled with price". This is a range from 3208 to 3176 that resolves itself into a trading range between 3192 (the mean of the range) and 3203 (note how the last bar rejected the bottom reached by the bar five bars previous). It is not crucial that price hold above 3192. But the fact that it has by the time one has opened up the chart is informative. The Dog That Didn't Bark. It has not fallen by now, so . . .

The only line that matters, then, and the only one that matters with regard to the open, is the following:

You then have to determine exactly what it is you're going to look for when the market opens in a few minutes. How is what you have right in front of you going to help you make a trading decision?

I am trying to follow this exercise and trying to come up with THE ONLY LINE that matters.

So far buyers lost control of the market at 60, then failed to go above the LSH, therefore weakness is the thing to look for. That was confirmed during this hour as sellers broke through the LSL.

At the time of the post we are at 43, and sellers stopped putting pressure on the market above 41 which is the 50% level of the upswing from yesterday´s low.

Therefore that is what I will focus on during the next hour, will buyers be able to hold prices above 40 or will sellers be able to break through it.

Comments are not only welcomed but needed.

 

[dbphoenix]

The mean of the range from 77 to 22 is 50. This daily supply line intersects here as well. I've been getting a lot of questions about the relevance of the daily and hourly. This is a good example.

If one is looking for a retracement to short on the daily, this could well be it. We'll see how the day goes. Somebody trading the hourly would already be short.

 

[niko]

Quote from dbphoenix:

The mean of the range from 77 to 22 is 50. This daily supply line intersects here as well. I've been getting a lot of questions about the relevance of the daily and hourly. This is a good example.

If one is looking for a retracement to short on the daily, this could well be it. We'll see how the day goes. Somebody trading the hourly would already be short.

Spot on at 50, but why was this the most important level? Because of the intersection with the daily?

 

[dbphoenix]

Quote from niko:

Spot on at 50, but why was this the most important level? Because of the intersection with the daily?

For the reasons I stated. Plus it was tested for four hours last night.

P.S. Does that count as a "real-time" call?

 

[niko]

Quote from dbphoenix:

For the reasons I stated. Plus it was tested for four hours last night.

P.S. Does that count as a "real-time" call?

Thanks