Trading NQ via Price Action
- Thread starter k p
- Start date
So we broke below the low of the day. Just drew in a bunch of double tops and bottoms here, but this could drive you crazy if you look for too many I think. In this case though, each provided trades for at least a few points, not that I'm looking to be a scalper though.
Seeing as we broke through the bottom, and we have a series of lower highs and now lower lows, its a down slopping channel you could say. Not sure about where to enter here, but will be watching the opening range.
Seeing as we broke through the bottom, and we have a series of lower highs and now lower lows, its a down slopping channel you could say. Not sure about where to enter here, but will be watching the opening range.
What a great day, and I stayed out!
A - This might be pushing it, but I drew in some lines here for a possible hinge. I am now waiting a few minutes to see how the opening range will form before jumping in, unless perhaps an overnight high or low is breached right away.
B - We hit this high here, right below the midpoint I pointed out in prep. This bar certainly does look like a REJ bar, opens and closes on the low.
C - If we do have a hinge, it was tested up and failed, as Db says the first exit from a hinge usually fails, so here we would have a break out the bottom. Not gonna think about taking the hinge exit. If this turns out to be another range day, I would be shorting right at the low of the day close to the bottom of the range (but I address this in the conclusion).
D - We do in fact break below the overnight low, a sign right there, and drop 5 points quite easily. Niko and I are both waiting for the clear RET which happens at D and marked in. I even told him a short at 83.75 is where it would be. I just didn't feel like taking it, that is all I can say. It would have filled on the next bar and only goes against me by two ticks 2 bars later.
E - Here is a second RET, the short here would beat 80.75 and would go against me only 1 tick. The trouble here is that level of 80 I have outlined. Of course there is no reason not to take the short, this level may not mean much now, and the market is telling you right now that its going down anyway.
F - So now I could be thinking dammit, I should have gone short, and start chasing the market, looking for RETs, like here. This little bar above F is slightly higher than the previous, so one point below here would be an entry, which gets filled 2 bars later and works for a few minutes, but then price rallied up to G.
G - For sure the scratch would have happened way before this point if the entry was in fact at F. Furthermore, I drew in a SL for this drop from the high at B, and we see the line is broken so although I think I missed out on 30 points, I'm fairly certain I would have gotten out here, probably around 74 for 10 points. Would I re-enter? Not sure...
H - Same story here at H, a RET with a low at 66, so entry would be at 65, but 2 bars later price goes to 67.50, so that would be 2.5 points and might have been a scratch.
I - Once again, a RET, low at 64.25, so entry at 63.25, gets filled on the next bar and ends up being a better entry than at H, for a worse price since its a short, but at least this one doesn't get stopped out.
The reason I mention all this is that I had been doing this for the past few days and that is where I have my losses. The first entry is most critical, the second and third can work, but chances are lower. The RETs can really cause you to scratch even if the move is still good. Holding on, taking on a greater loss just to see if the trade works is stupid and will kill you in the end. Today all of these RET work eventually, but you never know where the bottom is, you never know how far the drop is so the good habit is to get in on the first entry and don't chase. Perhaps one caveat could be when you "see" the behavior of the drop and any attempt at a halt is without any force, then sure, short each RET, but its not as good as getting in right away.
J - This level of 55 comes from the mean of a range from a few days ago. It still happened to be on my chart and sure seems to provide a halt, but being a blue dashed line, its a mean, and its the red lines that I use to show stronger price levels that are either support or resistance, mostly seen even on the hourly chart.
K - Like here! This level of 48 has been on my chart for a while, and with this REV here, it will stay there!
So if was still in my short from the top, getting out exactly at 48 would be tough, but by L we form a lower high and start going sideways, It sure would suck to lose 10 points, getting out at 58 versus 48, but its simply impossible to call the absolute tops and bottoms. (except perhaps at these strong levels and watching a tick chart and seeing the micro RETs on the tick chart)
L - A long would set up here as well. A fanned SL would be broken here, and we have a RET. This trade would have to be scratched, but hey, you never know if its gonna be a VREV and shoot straight up. I still remember the 100 point day down and 100 points back up!
CONCLUSION
So today is a bit unfortunate. I won't lie, I feel bad about not taking the short, it would have led to at least 10 points and easily reversed the losses of the past few days, and if I re-entered after the large RET, it would have been even better. Plus both entries would have led to barely any fear of price moving against me, a 2 point stop loss would have never hit. But since I called it out in real time, I can at least pat myself on the back for understanding the technical aspect of all this. (i'm of course not doing this to feel good, i'm in it for the money!)
Also, I am thinking that the trade could have been entered even sooner. I see in Bern's journal that he took the short within the range. I did point out the REJ bar, the failure to go above the hinge and then down below. If entered early enough, there was space before the overnight low was hit to allow for an exit if price did reverse back up, and if it did continue down, the rest would all have been just sitting back and watching.
Trading in a range is of course tough, trading around the mean is also not always smart, but my opinion is once I get good, it will provide opportunity. At my level though, I should just be taking the damn SLA trades!!!
A - This might be pushing it, but I drew in some lines here for a possible hinge. I am now waiting a few minutes to see how the opening range will form before jumping in, unless perhaps an overnight high or low is breached right away.
B - We hit this high here, right below the midpoint I pointed out in prep. This bar certainly does look like a REJ bar, opens and closes on the low.
C - If we do have a hinge, it was tested up and failed, as Db says the first exit from a hinge usually fails, so here we would have a break out the bottom. Not gonna think about taking the hinge exit. If this turns out to be another range day, I would be shorting right at the low of the day close to the bottom of the range (but I address this in the conclusion).
D - We do in fact break below the overnight low, a sign right there, and drop 5 points quite easily. Niko and I are both waiting for the clear RET which happens at D and marked in. I even told him a short at 83.75 is where it would be. I just didn't feel like taking it, that is all I can say. It would have filled on the next bar and only goes against me by two ticks 2 bars later.
E - Here is a second RET, the short here would beat 80.75 and would go against me only 1 tick. The trouble here is that level of 80 I have outlined. Of course there is no reason not to take the short, this level may not mean much now, and the market is telling you right now that its going down anyway.
F - So now I could be thinking dammit, I should have gone short, and start chasing the market, looking for RETs, like here. This little bar above F is slightly higher than the previous, so one point below here would be an entry, which gets filled 2 bars later and works for a few minutes, but then price rallied up to G.
G - For sure the scratch would have happened way before this point if the entry was in fact at F. Furthermore, I drew in a SL for this drop from the high at B, and we see the line is broken so although I think I missed out on 30 points, I'm fairly certain I would have gotten out here, probably around 74 for 10 points. Would I re-enter? Not sure...
H - Same story here at H, a RET with a low at 66, so entry would be at 65, but 2 bars later price goes to 67.50, so that would be 2.5 points and might have been a scratch.
I - Once again, a RET, low at 64.25, so entry at 63.25, gets filled on the next bar and ends up being a better entry than at H, for a worse price since its a short, but at least this one doesn't get stopped out.
The reason I mention all this is that I had been doing this for the past few days and that is where I have my losses. The first entry is most critical, the second and third can work, but chances are lower. The RETs can really cause you to scratch even if the move is still good. Holding on, taking on a greater loss just to see if the trade works is stupid and will kill you in the end. Today all of these RET work eventually, but you never know where the bottom is, you never know how far the drop is so the good habit is to get in on the first entry and don't chase. Perhaps one caveat could be when you "see" the behavior of the drop and any attempt at a halt is without any force, then sure, short each RET, but its not as good as getting in right away.
J - This level of 55 comes from the mean of a range from a few days ago. It still happened to be on my chart and sure seems to provide a halt, but being a blue dashed line, its a mean, and its the red lines that I use to show stronger price levels that are either support or resistance, mostly seen even on the hourly chart.
K - Like here! This level of 48 has been on my chart for a while, and with this REV here, it will stay there!
So if was still in my short from the top, getting out exactly at 48 would be tough, but by L we form a lower high and start going sideways, It sure would suck to lose 10 points, getting out at 58 versus 48, but its simply impossible to call the absolute tops and bottoms. (except perhaps at these strong levels and watching a tick chart and seeing the micro RETs on the tick chart)
L - A long would set up here as well. A fanned SL would be broken here, and we have a RET. This trade would have to be scratched, but hey, you never know if its gonna be a VREV and shoot straight up. I still remember the 100 point day down and 100 points back up!
CONCLUSION
So today is a bit unfortunate. I won't lie, I feel bad about not taking the short, it would have led to at least 10 points and easily reversed the losses of the past few days, and if I re-entered after the large RET, it would have been even better. Plus both entries would have led to barely any fear of price moving against me, a 2 point stop loss would have never hit. But since I called it out in real time, I can at least pat myself on the back for understanding the technical aspect of all this. (i'm of course not doing this to feel good, i'm in it for the money!)
Also, I am thinking that the trade could have been entered even sooner. I see in Bern's journal that he took the short within the range. I did point out the REJ bar, the failure to go above the hinge and then down below. If entered early enough, there was space before the overnight low was hit to allow for an exit if price did reverse back up, and if it did continue down, the rest would all have been just sitting back and watching.
Trading in a range is of course tough, trading around the mean is also not always smart, but my opinion is once I get good, it will provide opportunity. At my level though, I should just be taking the damn SLA trades!!!
Wouw - if I just had been trading this day...
Anyway just kidding, but why didnt you not go into a short trade, lets say around 8.45 - a E point, there was a clear unbroken simple line defining a unbroken downtrend??
By the way do you use a DOM to watch the bid and offer, or are u only trading by looking at the chart?
keep up the good work...
Anyway just kidding, but why didnt you not go into a short trade, lets say around 8.45 - a E point, there was a clear unbroken simple line defining a unbroken downtrend??
By the way do you use a DOM to watch the bid and offer, or are u only trading by looking at the chart?
keep up the good work...
Ya... if only. This is the thing though, nobody can say when the drop will happen. You gotta take each setup for a short as it comes and eventually it will drop. If your entries are good, you can scratch for minimal loss and re-evaluate. If it sets up again, gotta take it again. I'm trying to find the absolute best entries. If only I did what I say!
As to that second short at E, well, yes, it was still high up enough that I wouldn't have been chasing the market, but I had that 80 level to contend with, but I know this has held me back needlessly before so I have to be careful using this as an excuse. Honestly though, I think that maybe just the past few days of loses were on my mind so I was being more careful, which is stupid. You gotta remember that before the drop, in real time, it all looks like it can be a double bottom or even a higher low when price goes up in the RET.
Yes, I do have DOM on my second monitor, but its not for watching price. I watch price on either a little tick chart I have in the corner, but mostly just the price bar in the one minute chart or the 15 second chart. The DOM is strictly for order entry where I just drag my Stop Limit button onto a price level in either the buy or sell column, and to that an OCO order is automatically attached once its filled for safety.
It really is unfortunate about the short. I'm sure with this system, using a 2 point stop loss and looking for just the entries in a RET I am bound to break even. By not taking trades, I am messing with this. In fact, if every trade is taken as should, your profits are guaranteed I would say. Doing SLA for a whole week and following it to the T will make you positive at the end of the week. But when you start skipping on legitimate trades like I am, you're not allowing the system to work.
But I am still making progress and one more week of delay is nothing in the whole grand scheme of making a living from trading for the rest of your life!
PREP FOR MAY 16
Overnight, price is bound by the limits of 3551 and 3567, with a mean of 3559. Its not exactly a trading range, but the high was rejected a few times, and now most recently so was the low, so we are getting close to the top again.
We haven't look at the channel front for a while. If I just eyeball it, it seems like we have a slightly up-slopping channel for the past 30 days or so, but it also appears more recently to be heading just sideways as we aren't ever making much headway to breaking previous highs.
Just as I type this, 3566 has been rejected, so the top level is getting strong as resistance.
Overnight, price is bound by the limits of 3551 and 3567, with a mean of 3559. Its not exactly a trading range, but the high was rejected a few times, and now most recently so was the low, so we are getting close to the top again.
We haven't look at the channel front for a while. If I just eyeball it, it seems like we have a slightly up-slopping channel for the past 30 days or so, but it also appears more recently to be heading just sideways as we aren't ever making much headway to breaking previous highs.
Just as I type this, 3566 has been rejected, so the top level is getting strong as resistance.
Oppps.. forgot the chart. I should also point out that after the drop yesterday, we formed a hinge, with an apex of roughly 3551, which is the level that has provided support overnight today. So after price left the hinge, it came back down to test it and bounced off. Also, as per Niko and Bern, we are very close to the apex of the hinge on the daily which is at 3550.
Who knows what traders have in mind today though.
Who knows what traders have in mind today though.
A - We broke out the overnight high 15 mins before the open, but stall at 71. I'm not sure why Niko had this on his radar, but he mentioned it. I went back and see some instances of 71, but 70 was for me more pertinent, although this 71 level worked beautifully. I didn't have this level on my one minute chart, so it didn't exactly stand out. If anything, I see we broke out the top, and coming back down to test, setting up a possible long in a RET.
The series of slightly lower highs makes me draw in that little SL, so not really looking for a long at all though. Once you have that first lower high, you gotta be careful.
B - At the open, watching with intent! Price shoots up, but it only takes seconds to see its rejected. At the time I'm thinking, its screaming to go short. We form a clear double top with A at roughly 71, but no way to get in. Trying to show patience, but let me tell you, when I get good, that tick chart is gonna be my best friend! This short would have been the trade of the day!
C - We come back to the overnight range, and I'm seeing this short set-up, but not ready to pull the trigger yet. Perhaps its bad because my first instinct is usually good, but I'm practicing restraint of waiting for the clear RET on the one minute. Each person has a different data feed, so maybe some have it when I don't, so I keep this in mind too if the bars are really overlapping a bit or if the RET could almost be there if only the bottom of the bar was higher by a tick or two.
Price would have come up to my entry on the next bar, even have gone against me by more than two points. I have not done enough testing, both in back testing and forward testing so I don't know if its better to scratch at BE once price went lower but comes back, or still go to a 2 point loss. Here the BE scratch is better, other times a BE scratch stops you out of your trade just before the drop resumes. Its a tough call really. The trades you see on an EOD chart where you get filled and price just drops I don't think can be hunted down with any predictability.
D - Here we have a clear RET, the higher low in the bar before this bar, so a stop one point below that low makes me place my sell stop. Price goes 4 points up, so I'm thinking its not gonna come down to my entry, but it sure does, and then the heart rate picks up!
Price does drop, but comes back, even against me by a few ticks. A minute later I am in the clear, but the next 5 minutes it just doesn't go anywhere. I am wanting to get out, partly because of emotion, but partly because price isn't doing what I thought it would do, dropping! I desperately want that $20 of profit! (pathetic way of thinking... isn't it? i know its all wrong, so that's good, and all i can do is get more comfortable with it so that these feelings eventually dissipate and leave)
This is all happening around the mean of that range of course. I start moving my stop loss down to just slightly above break even and I can remember myself "willing" price to go down. Don't these traders know that after I enter my short they should be refusing to buy at these high prices??? LOL.... Being a bit dramatic here I know, but writing down the stupid thoughts will hopefully help with clearing them from my mind. I don't think I have that much mental work to undo, just gotta get through the initial stumbling blocks. I'm learning to walk here dammit, and if I was a baby, all of this would actually be cute!
E - So we finally make it in the clear, and I see that profit window hit $200. Another bad thing is to have this displayed because focusing on profit and loss just gets you in the wrong frame of mind. I will look into changing it later, but for now just gonna go with how I have it set up.
I'm happy to see price dip below the overnight low and think I'm set up quite nicely for a 30 or 40 point drop.
Sadly, this bar is a clear REJ bar, opens and closes on the high. Lets give price a bit more room though, its easier to take all of this of course when I know I'm in the clear. I like what Niko said in his journal yesterday. He was also giving price room because he thought there was more to the drop, but more importantly, he knew that at worst the trade would be break even. Anything you gotta say to yourself to calm yourself down is probably not a bad thing, as long as you're not reinforcing bad habits though.
Back to price though, after this REJ bar we still go higher, and on the next bar, the SL is broken, although it is fanned down to be steeper, and hence the top doesn't connect with the first high. I am already 5 points above the low we hit, so I'm thinking its time to get out so I close the trade.
Looking at the action that continued, it didn't go anywhere, just sideways, but I clearly exited at the top of what ended up being the trading range. If I hung in a bit longer, I could have exited at a better price, but I can work on these nuances later. The fact that this REJ happened at the overnight low is pretty significant, its not a just another RET in the middle of nowhere, it could very well be a reversal and I'm not sticking around to see if there is a higher low or not. (but yes, I see on this chart that waiting just a bit longer would have given me a few stabs at trying to break below 51, which would be a better reason to get out, and my exit could have been better by a few point at 52 versus 56.
G - This is where price refuses to go down, at this level around G. Price also refused to go up, barely going past 57, so we have a bit of a range here, but I'm out already anyway. Was looking for a re-entry to go short but it never happened.
H - So we make it back up to the mean, which is now showing more significance, and price even makes it to almost the top of the range. In fact, this top at H matches the previous top of the bar that I entered my short at. This is hence a double top, and it too was screaming for a short. Entry could have been one point below this bar, at 60.25, but I didn't mark it in because I wasn't actually thinking about placing it with conviction. This would have been an excellent trade, and quite legit given that it is looking to be very much of a range now.
I - So we make it down here, break the previous low at E, and I think if we just get below that level at 48, the short might be good. I just don't want to mess with my win today so I don't actually place the trade but lets follow it. We do get an instant drop, but no follow through, and on this chart, its an obvious REJ bar. Once again, getting out at BE here seems like a good rule, especially when you're hoping for a break below a key level, so if price comes back up like this so quickly, perhaps a BE stop is good practice. If the drop is legit, then it shouldn't come back up like this so quickly. Of course, waiting for a RET after breaking through a level is also good practice!
J - Here is another clear REJ bar, but not watching so much anymore. Because we failed to go below 48, and have gone sideways for 10 minutes, price really has to go somewhere else to make a trade worthwhile so you don't get chopped up.
So done for the day. Up $111, hardly anything to get excited about since I'm still down for the week, but I'm taking baby steps, focusing on just putting on a trade and trying to not have a heart attack at the same time!
(and in my book, consistent 5 points is fabulous.... if you trade with 10 contracts!)
The series of slightly lower highs makes me draw in that little SL, so not really looking for a long at all though. Once you have that first lower high, you gotta be careful.
B - At the open, watching with intent! Price shoots up, but it only takes seconds to see its rejected. At the time I'm thinking, its screaming to go short. We form a clear double top with A at roughly 71, but no way to get in. Trying to show patience, but let me tell you, when I get good, that tick chart is gonna be my best friend! This short would have been the trade of the day!
C - We come back to the overnight range, and I'm seeing this short set-up, but not ready to pull the trigger yet. Perhaps its bad because my first instinct is usually good, but I'm practicing restraint of waiting for the clear RET on the one minute. Each person has a different data feed, so maybe some have it when I don't, so I keep this in mind too if the bars are really overlapping a bit or if the RET could almost be there if only the bottom of the bar was higher by a tick or two.
Price would have come up to my entry on the next bar, even have gone against me by more than two points. I have not done enough testing, both in back testing and forward testing so I don't know if its better to scratch at BE once price went lower but comes back, or still go to a 2 point loss. Here the BE scratch is better, other times a BE scratch stops you out of your trade just before the drop resumes. Its a tough call really. The trades you see on an EOD chart where you get filled and price just drops I don't think can be hunted down with any predictability.
D - Here we have a clear RET, the higher low in the bar before this bar, so a stop one point below that low makes me place my sell stop. Price goes 4 points up, so I'm thinking its not gonna come down to my entry, but it sure does, and then the heart rate picks up!
Price does drop, but comes back, even against me by a few ticks. A minute later I am in the clear, but the next 5 minutes it just doesn't go anywhere. I am wanting to get out, partly because of emotion, but partly because price isn't doing what I thought it would do, dropping! I desperately want that $20 of profit! (pathetic way of thinking... isn't it? i know its all wrong, so that's good, and all i can do is get more comfortable with it so that these feelings eventually dissipate and leave)
This is all happening around the mean of that range of course. I start moving my stop loss down to just slightly above break even and I can remember myself "willing" price to go down. Don't these traders know that after I enter my short they should be refusing to buy at these high prices??? LOL.... Being a bit dramatic here I know, but writing down the stupid thoughts will hopefully help with clearing them from my mind. I don't think I have that much mental work to undo, just gotta get through the initial stumbling blocks. I'm learning to walk here dammit, and if I was a baby, all of this would actually be cute!
E - So we finally make it in the clear, and I see that profit window hit $200. Another bad thing is to have this displayed because focusing on profit and loss just gets you in the wrong frame of mind. I will look into changing it later, but for now just gonna go with how I have it set up.
I'm happy to see price dip below the overnight low and think I'm set up quite nicely for a 30 or 40 point drop.
Sadly, this bar is a clear REJ bar, opens and closes on the high. Lets give price a bit more room though, its easier to take all of this of course when I know I'm in the clear. I like what Niko said in his journal yesterday. He was also giving price room because he thought there was more to the drop, but more importantly, he knew that at worst the trade would be break even. Anything you gotta say to yourself to calm yourself down is probably not a bad thing, as long as you're not reinforcing bad habits though.
Back to price though, after this REJ bar we still go higher, and on the next bar, the SL is broken, although it is fanned down to be steeper, and hence the top doesn't connect with the first high. I am already 5 points above the low we hit, so I'm thinking its time to get out so I close the trade.
Looking at the action that continued, it didn't go anywhere, just sideways, but I clearly exited at the top of what ended up being the trading range. If I hung in a bit longer, I could have exited at a better price, but I can work on these nuances later. The fact that this REJ happened at the overnight low is pretty significant, its not a just another RET in the middle of nowhere, it could very well be a reversal and I'm not sticking around to see if there is a higher low or not. (but yes, I see on this chart that waiting just a bit longer would have given me a few stabs at trying to break below 51, which would be a better reason to get out, and my exit could have been better by a few point at 52 versus 56.
G - This is where price refuses to go down, at this level around G. Price also refused to go up, barely going past 57, so we have a bit of a range here, but I'm out already anyway. Was looking for a re-entry to go short but it never happened.
H - So we make it back up to the mean, which is now showing more significance, and price even makes it to almost the top of the range. In fact, this top at H matches the previous top of the bar that I entered my short at. This is hence a double top, and it too was screaming for a short. Entry could have been one point below this bar, at 60.25, but I didn't mark it in because I wasn't actually thinking about placing it with conviction. This would have been an excellent trade, and quite legit given that it is looking to be very much of a range now.
I - So we make it down here, break the previous low at E, and I think if we just get below that level at 48, the short might be good. I just don't want to mess with my win today so I don't actually place the trade but lets follow it. We do get an instant drop, but no follow through, and on this chart, its an obvious REJ bar. Once again, getting out at BE here seems like a good rule, especially when you're hoping for a break below a key level, so if price comes back up like this so quickly, perhaps a BE stop is good practice. If the drop is legit, then it shouldn't come back up like this so quickly. Of course, waiting for a RET after breaking through a level is also good practice!
J - Here is another clear REJ bar, but not watching so much anymore. Because we failed to go below 48, and have gone sideways for 10 minutes, price really has to go somewhere else to make a trade worthwhile so you don't get chopped up.
So done for the day. Up $111, hardly anything to get excited about since I'm still down for the week, but I'm taking baby steps, focusing on just putting on a trade and trying to not have a heart attack at the same time!
(and in my book, consistent 5 points is fabulous.... if you trade with 10 contracts!)The formation of the hinge today is just nothing short of remarkable. The fact that it also forms with the apex roughly around the mean of the overnight range is almost predictive.
I keeping thinking now, as a result of Db's constant notes, what are traders thinking... what do they want... where are they unable to find trades.... what is the LOLR.... if they can't go down, do they have trouble going up. The foundation of looking at the behavior of traders and what they want is absolutely the way this stuff actually works. Everything else is second to tracking the balance between supply and demand, and everything you see on the chart is a reflection of this simple principle. Traders want to trade, and if they can't find trades here, they look for them elsewhere. The evidence of this is so clear on the chart, and the trick is seeing it in real time and acting on it without fear or emotion.
Also, just noticed that Db has mentioned in his post that we are abandoning the lines too soon. I find this as perfect timing since I was just telling Niko this morning that my homework for the weekend will be to go over this entire week and just draw in the SLs and DLs and take trades based on mechanical setups without even looking at levels. I will report back with the drawn in charts as well as point total. Of course there are quick decision that have to be made in real time, such as whether to fan the line or not, how much of a break do you look for before an exit, etc. But I know now what I look for, so I should be faithful with doing this chart in hindsight to what I would do with the bars forming in real time.
I keeping thinking now, as a result of Db's constant notes, what are traders thinking... what do they want... where are they unable to find trades.... what is the LOLR.... if they can't go down, do they have trouble going up. The foundation of looking at the behavior of traders and what they want is absolutely the way this stuff actually works. Everything else is second to tracking the balance between supply and demand, and everything you see on the chart is a reflection of this simple principle. Traders want to trade, and if they can't find trades here, they look for them elsewhere. The evidence of this is so clear on the chart, and the trick is seeing it in real time and acting on it without fear or emotion.
Also, just noticed that Db has mentioned in his post that we are abandoning the lines too soon. I find this as perfect timing since I was just telling Niko this morning that my homework for the weekend will be to go over this entire week and just draw in the SLs and DLs and take trades based on mechanical setups without even looking at levels. I will report back with the drawn in charts as well as point total. Of course there are quick decision that have to be made in real time, such as whether to fan the line or not, how much of a break do you look for before an exit, etc. But I know now what I look for, so I should be faithful with doing this chart in hindsight to what I would do with the bars forming in real time.
So price is taking off without me right now... I'm just watching it casually. But what is interesting is that when you look back, you can see this fairly big void in price, airspace as Db calls it where many trades didn't happen. On the way up a week ago price flew up, on the way down it dropped, so now as it goes back up, this is just an area where many trades did not happen, where traders cannot find trades, so we have to go from one mean to another.
Of course if you are following SLA, you would already be in a long, or you could even be in a long from breaking out of the hinge that formed over this entire day, or you could even be in a long from breaching the opening level highs of 71.
Of course if you are following SLA, you would already be in a long, or you could even be in a long from breaking out of the hinge that formed over this entire day, or you could even be in a long from breaching the opening level highs of 71.