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

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Quote from Huyang:

DB:

I wish you could comment on my trade on ES 5m chart using your drawing a straight line method. Thank you.
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Well, while your participation is welcome, I have no idea what I'm looking at or how this relates to the first five posts of the thread. There's no context provided, you're using candles and indicators, this appears to be a 5m bar interval and I have no idea what "B77H" means.

When and where are buyers in control and for how long and to what extent? What about sellers? When and where and how does this balance change? If you've read the first five posts and you can't answer these questions, then I suggest you read them again.

Make every effort to simplify. Then simplify some more. You can't trade price if you can't see it.
 
The whole day turns out to be a fairly decent looking hinge. And unlike the 23rd and 25th, where sellers took price down below the channel but buyers immediately stepped in to push it back up, buyers seem unwilling to let go of the forward progress that has been gained above the channel.

The hinge has become unhinged to the upside. What remains to be seen is whether buyers can maintain the rally and test last week's 41.50 high, or do we see yet another hinge where the initial movement out of the hinge is sharply reversed.

I closed my short ES today for a gain of 32 points, or 128 ticks.

I am now long the NQ from 3221. My long entry is marked on the attached chart. I bought when price came back up through yesterday's high after having sold off so quickly from the opening rally.

In the context of this discussion thread, the NQ has now retraced more than 50% of its decline from its 41.50 high, and the upper channel line shown in this chart is essentially a supply line drawn across the daily bar intervals. That supply line was broken today.

Over a longer time frame, the NQ is trading above (dare I say it :eek: ) the midpoint of its trend channel, and the upper limit of that channel looks to be close to 3400. I'm not saying that its going there or that its on its way, only that right here (well, about 10 points lower than right here ) is a good place for me to put my line out in the water, risking a minnow to hook a whale (potentially).

Anything I state here that is deemed correct is all DbPhoenix's fault. The fault for any errors in my thinking is, of course, my own.
 

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Thanks DB for your time. I do watch mainly 5m candle bars. I feel your straight line method can be used for 5m candle chart too and applied it on my previous chart.

I donot use any other indicators except moving averages to guide me about trend. After thinking about your questions asked in the post, i changed the chart and only put 60bar exponential moving average to the chart. Now clearly the second long is better. please see attached for details. Please help to comment. Thank you.
 

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Quote from fortydraws:

Over a longer time frame, the NQ is trading above (dare I say it :eek: ) the midpoint of its trend channel, and the upper limit of that channel looks to be close to 3400. I'm not saying that its going there or that its on its way, only that right here (well, about 10 points lower than right here ) is a good place for me to put my line out in the water, risking a minnow to hook a whale (potentially).
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As to your trend channel, notice how price probes below it then pulls back into it, like the Blob trying to reach under the freezer door to get at Steve McQueen. This may be an "indicator" of buyer determination.

As to its "midpoint", it's a "mean" :).

And as to 3400, we're running out of time. But if we get there, what a short that will make.
 
Quote from Huyang:

Thanks DB for your time. I do watch mainly 5m candle bars. I feel your straight line method can be used for 5m candle chart too and applied it on my previous chart.

I donot use any other indicators except moving averages to guide me about trend. After thinking about your questions asked in the post, i changed the chart and only put 60bar exponential moving average to the chart. Now clearly the second long is better. please see attached for details. Please help to comment. Thank you.
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First, it is not my "straight line method", if it can be called a method. It is merely an adaptation of what I've learned from Wyckoff.

Second, these lines can be used on any chart, even a monthly or annual chart. But they won't help you unless you already have a thorough understanding of supply and demand, support and resistance, and trend. Since you must use a moving average to tell you whether price is going up or down, you do not understand trend, much less how to track it. Without that, these lines are useless.

Third, in order to trade price, you have to be able to see it. What you're looking at is a series of 5m summaries of price. That is insufficient.

Fourth, you must not only have a trading plan but one which is thoroughly tested and consistently profitable. Apparently you do not. If you do, then open up a journal and post your plan. If you don't, then begin studying the material at the Wyckoff Forum at Traders Laboratory, particularly the stickie on Developing a Plan. Until you've gone through that process, which may take months, there is nothing that these lines will do for you. In the meantime, if you're trading, stop.
 
Quote from Laissez Faire:

What is your prediction for S&P 500 today or say the next days/weeks?

Thanks.
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If this question is directed toward me, I have no idea. How does it relate to the content of the thread?
 
Quote from fortydraws:

The hinge has become unhinged to the upside. What remains to be seen is whether buyers can maintain the rally and test last week's 41.50 high, or do we see yet another hinge where the initial movement out of the hinge is sharply reversed.
More...

Overnight I carried a stop 2 points below the hinge's 24.25 midpoint, and I am out of the short as result.

Time to go looking for the next trade :)
 

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