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

[bigmoose]

The run appears to be loosing a bit of it's steam. It quickly returned to the 50% of the last move up; however we are still well above the 3204 ish 50% point of the last fanned DL.

We would stay in long. Observe for "pauses" on the tape, indicating a deeper sentiment change... we will likely consolidate here for a bit... close long position if we drop to 3203.5

As said, not a time to take a coffee break.

Thanks DB for taking it step by step, keeping it focused, pushing for conclusions/decisions, and straightening out our thought process.

 

[dbphoenix]

Quote from Gringo:

We stay in long. Create a new DL.

Not exactly. It's testing the new DL you already created when price broke the last one.

To continue:

1000: Price makes a higher high then drops back to test the fanned demand line. What does one do now?

1003: Price makes a higher high. Demand line intact. Trade now worth 14pts.

1006: Price consolidating.

1007: Price makes higher high. Trade now worth 15pts.

1010: Demand line broken. What does one do now?

There are many ways to characterize traders but one way is to compare those who are looking for reasons to get out to those who are looking for reasons to stay in.

Guess who makes more money?

 

[Gringo]

Quote from dbphoenix:

Not exactly. It's testing the new DL you already created when price broke the last one.

Agreed.

 

[bigmoose]

I see 5 waves in this move (purple). It has taken the last 4 to go the distance that the first one did. The last wave up is the shortest and gained the least, and it has the flattest slope. I am still in, but alert. If the next swing high is lower, I would be out of the long.

 

[dbphoenix]

OK.

1011: Price drops below last swing low. What does one do now?

 

[burt_schroder]

Quote from dbphoenix:

OK.

1011: Price drops below last swing low. What does one do now?

depends on the style and parameters of trade management.

 

[jl1575]

3300 was mentioned as a potential maximum price level, is that right?

 

[llIHeroic]

It gets difficult to know what I would do when actually placed in this situation, but I would hope that I would have just exited after the break of the last blue demand line I drew in my last picture. Demand has already been starting to show hesitation, and this steep of an incline clearly can't last forever.

Not feeling as confident in continued demand especially since the latest RET has passed the 50% mark of the most recent up-move. At the very least, I would think that I would at least be looking at 3208 as my line in the sand excepting something unusual that changes my mind. Both the initial demand line, and the one that was temporarily in existence during the deep mini-RET both seem to converge around that point.

Part of me may be starting to tire from managing this relatively long-standing trade, and beginning to affect my decision making. There will always be an opportunity for re-entry if the selling pressure evaporates quickly.

 

[dbphoenix]

Quote from llIHeroic:

It gets difficult to know what I would do when actually placed in this situation, but I would hope that I would have just exited after the break of the last blue demand line I drew in my last picture. Demand has already been starting to show hesitation, and this steep of an incline clearly can't last forever.

Not feeling as confident in continued demand especially since the latest RET has passed the 50% mark of the most recent up-move. At the very least, I would think that I would at least be looking at 3208 as my line in the sand excepting something unusual that changes my mind. Both the initial demand line, and the one that was temporarily in existence during the deep mini-RET both seem to converge around that point.

Part of me may be starting to tire from managing this relatively long-standing trade, and beginning to affect my decision making. There will always be an opportunity for re-entry if the selling pressure evaporates quickly.

If you get tired, just think of all the money you're making.

It is true that as the trade matures, the number of elements one has to consider may increase. In the chart posted above, for example, price dropped 25%. But it didn't drop below the next swing low. One may already be out, but he has to monitor all this in order to determine when and where to re-enter and/or where to enter a short.

Here, for example, price failed to make a higher high. What does one do with that?

 

[slugar]

Quote from dbphoenix:

If you get tired, just think of all the money you're making.

It is true that as the trade matures, the number of elements one has to consider may increase. In the chart posted above, for example, price dropped 25%. But it didn't drop below the next swing low. One may already be out, but he has to monitor all this in order to determine when and where to re-enter and/or where to enter a short.

Here, for example, price failed to make a higher high. What does one do with that?If trading multiple contracts take one off when it failed at the last swing low and look for a retracement to get long but do not thin k about a short until the 50% line is taken out!