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

[MadeMan]

Quote from fortydraws:

the context of XXX and where price was.

speaking of ....... here is a trade i just took in the Fdax and
managed..

Context :

price reacted at a former MP 8651 , traded towards former
support @ 8611 where buyers came in . and as price reacted at
arround 8639 i drew in a SL and as the reaction off the MP could be considered weak aswell as the price was on its way down,
context is weak perse ... but we reacted at sup. and the following
retr. ended at arround 50% mark of the buying wave off sup., as
price traded back to the swing high @ 8639 and we yet again
failed to at least takeout the low (50%) i knew the bulls are in ..
and the bears are about to puke or at least under pressure.. the
trade itself is agrressive.. as we trade into a MP of a sloppy channel .. but then again.. i take full responsibility

context = weak / with buyers at support !!!
Price = didnt react bearish at bears territory ..

all in all we head bears who where in charge and they couldnt compete with buyers steppin up ...

therfore took the long ... after that just managed the trade .. after
we took out the MP , and we reacted at a SL (higher TF) , gave it
room till MP to react off ... and as the double topish action took
place was ready to get out at the break of the bars low.. wich
never happened .. so i stayed in and let the DL play it out...
as the grind higher got a lil heavy.. and the DL broke .. i got out at
the break of a bars low..

i could have stayd in longer , and it would have played out well.. as of now .. but iam in a hurry and its an ok trade ..
iam just fine with that..

 

[bmwhendrix]

Yes, I would say it was "ok".! Good hold.

 

[dbphoenix]

God knows I don't want to offend anybody, but this has come up elsewhere, and given the number of people who can't spell "lose" or know that a sentence begins with a capital letter and ends with a period, it's entirely possible that whatever schools attended, if any, failed to communicate the following to their students. Therefore:

• 

This is the process whereby one creates a consistently-profitable trading plan, as distinct from picking up a big bunch of something and throwing it against the wall to see what sticks, or spraying bullets everywhere as in a video game (see "overtrading"), or buying something because it appears to be "going up" or shorting something because it appears to have risen "too far".

 

[dbphoenix]

Quote from dbphoenix:

I should also point out with regard to the trade 40d mentions and the chart he posted that this provides a good example of the entry which "anticipates" a breakout that Wyckoff talks about but doesn't provide much guidance on. Whether it's "high risk" or not depends I suppose on the trader. It's not something I recommend to anyone who hasn't done the work.

In this case, if one plots a 1m chart of the morning, he will see a trend that begins at 0300, second point at 0400, third at 0530. If he then plots the lower limit line, he will see that price makes a higher low off that at 0910. If one sees this as a signal, he can then act accordingly regarding a long entry.

Those of you who are following this will have noted that the breakout "failed", i.e., it did not rocket to new highs, at least immediately. Rather it returned to the middle of the range, perhaps for more fuel. Or it forgot its lunch. Proper management, however, resulted in a 5-7pt profit, which is nothing to be sneezed at.

Those who stuck around at that point may have noticed that price eventually formed a hinge. Price broke out of that hinge at 1020 and retraced at 1022/23. It then congested at 1025 for 5m, providing yet another chance to go long.

These whatever-you-want-to-call-thems occur again and again and again. Traders who study charts via replay will see that and be able to take advantage of them in real time without having to pay the host of a trading room, who probably wouldn't see them anyway. Those whose stomachs still turn over at the prospect of stepping off the curb in these situations have not yet spent enough time in process. But that's what testing and experimentation are for.

 

[MadeMan]

Quote from dbphoenix:

God knows I don't want to offend anybody, but this has come up elsewhere, and given the number of people who can't spell "lose" or know that a sentence begins with a capital letter and ends with a period, it's entirely possible that whatever schools attended, if any, failed to communicate the following to their students. Therefore:

• 

This is the process whereby one creates a consistently-profitable trading plan, as distinct from picking up a big bunch of something and throwing it against the wall to see what sticks, or spraying bullets everywhere as in a video game (see "overtrading"), or buying something because it appears to be "going up" or shorting something because it appears to have risen "too far".

Ahem, no offence taken.

 

[Gringo]

SLV dropped below the tight consolidation around 21. The drop came before the market open so only those paying attention to the futures got a chance to enter.

Now this doesn't mean someone couldn't have shorted yesterday. I on the other hand wasn't keen on entering while the price action wasn't clear enough to me. With price getting closer to 18 more opportunities might show up especially if there's a successful test of the lows. For now I am an observer letting less than optimal opportunities whiz by. This is where a plan comes into play where a person's risk tolerance and where and when to enter for better odds come to the fore.

So far SLV is heading down and we'll have to see if there's a halt or a continuation of sorts. On the weeky chart it is easily visible that a test might be in the offing. Whether it is successful or not, as of now we don't know. It's when the price decides to turn upwards we'll have to gauge whether the opportunity to enter is worth taking or not.

SLV Weekly for the bigger picture:

Gringo

 

[Gringo]

Here's the SLV Daily chart to show the break downwards from the mini consolidation. It is significant to note that not every wiggle is a missed opportunity if the message isn't clear enough to the reader of the price. Preservation of capital is a noble endeavor in itself. When the time is right and a person has had some experience it becomes much easier to recognize a higher probability entry than the ones being offered right now as far as SLV is concerned. I must again reiterate my dislike for gaps.

SLV Daily:

Gringo

 

[dbphoenix]

Quote from Gringo:

Now this doesn't mean someone couldn't have shorted yesterday. I on the other hand wasn't keen on entering while the price action wasn't clear enough to me. With price getting closer to 18 more opportunities might show up especially if there's a successful test of the lows. For now I am an observer letting less than optimal opportunities whiz bye. This is where a plan comes into play where a person's risk tolerance and where to enter for better odds come to the fore.

It helps to remember that as price enters important zones, the water becomes increasingly murky (this is one way of knowing whether or not the zone one has conjectured is real or imaginary). Weak traders get shaken out and unprepared traders (unprepared? really?) trap themselves (yes, themselves) on the wrong side of price movement. If one is trading emotionlessly, he can observe all this and take advantage of it. Otherwise, he's likely to get caught up in the same net as everyone else who's "playing".

 

[fortydraws]

My second ES trade. Price tested the 50% retrace of the August - September rally yesterday, and participated in the same "V" reversal discussed during yesterday's NQ trading. I bought this morning on a limit a tick above yesterday's high, 1681.25.

Price slogged around a bit before the NY open, but then rallied to 1682.75, bounced three points or so, then made a slightly lower pullback low at 1682.25, and resumed the rally, making a higher rally high at 1992.25 just before the NY close.

Like my short trade from last week, I am only trading 2 contracts. The current rally is 25 1/2 points, and the halfway back level is 1679.50. So should price get back to that point, I'll evaluate whether to continue with the trade or get out. So long as price does not retrace more than 50% of the rally, I will continue to hold. I will be watching price closely at 1696.75, which would be the 50% retrace of the decline from 1726.75, and, of course, should price rally back to its highs, I'll be keeping tabs on it there, always watching for a potential failure on the part of buyers to keep moving price higher at key moments.

 

[fortydraws]

Quote from dbphoenix:

Ah. That's one for the advanced class. This requires concentrated study of Wycoff's charts and commentaries, a lot of replay (and I mean a LOT of replay), a thorough understanding of support and resistance, and egoless and fearless trading.

My Goal: "Of all the things that are most desirable to know about the stock market, these two are most important:

(1) First, to be able to determine the final top of a bull market, and second, to determine the top of the intermediate swings, and finally the top of the minor moves.

(2) To be able to determine the final low in a bear market, the bottom of the intermediate swings, and the end of the minor moves.

Master this branch of the subject thoroughly, it is vital." - Richard D. Wyckoff

My Ultimate Goal:

"But there is one step more: Your education will not be complete until you can cover all your shorts and go long at the bottom of a panic, a depression or of an intermediate swing, and sell out all long stocks and go short at the top of a boom or an intermediate bull movement. This will be the result of practice, training, and experience. It requires great flexibility of mind and absolute control of your emotions. You can learn to do it if you will study and faithfully practice this Method." - Richard D. Wyckoff