O - So the open is marked, and based on the one minute chart there isn't much to do. But lets dig into the 15 sec.
A - Just before the open we have a tight little range which holds for a minute or two, with the upper resistance line at the open indicated by this line.
B - Any attempts to go lower are bought up, forming higher lows. I am already visualizing these lines before I draw them in. Basically, if we can break above A, it should be a good move. I could enter long at one point above A.
Now when I look on the one minute, I don't see this, I just have to wait until we get to C. The SLA entry could be at one point above this, indicated by the green arrow on the one minute, but it never triggers. In the 15 sec, we see a few attempts to breach 3990 but can't. A previous swing low at D is what I'm gonna watch.
D - For 3 minutes we are in this tight range, but once price drops below D, down we come!
I know that I mentioned how crazy it is to take trades off the 15 sec, but using this in conjunction with the 1 minute which shows you the general trend is I think a winning combination. I guess in a way I am thinking about just making a few points. I need the steady stream of points, I want the wins, the consistency. The market is a bit choppy these past few weeks, maybe this is what the summer session is all about. Db does after all say you have to characterize your market, and doing this for an entire year would be great, and so if this is what the summer is like, then I cannot hold through deep RETs as I am seeing with my trading thus far. I get stopped out, I enter moves too late.
Anyway... moving on.
E - So the drop brings us below the opening price, and although we have some hesitation here, I do put in some sell stops in accordance with SLA. The second one is moved up to reflect the higher low on the bar. I get a fill as you can see and draw in my SL. I have seen in the past how I could just get a fill for a short at what turns out to be a higher low, so I'm watching very closely.
F - My exit is above here. I see the bounce, I realize that 79 was a level of congestion yesterday I outlined, and because I am trading by way of my P&L, which is bad, and because I need a good day, for emotional reasons, which is just as bad, I'm out. (at least I had a solid reason based on price!)
As it turns out, our SL does break, so the exit isn't so bad.
I'm up $56.
G - So we just every so barely breach the SL but come back down, perfect for a re-entry. I don't take it, but its marked where it should be. It would fill, just before price shoots back up.
H - In fact, this could almost set up a long here. If we wanted to be anal, which I guess you can't be with trading, gotta be more fluid, but we could say this is a RET for a long, which happens just at the SL break. Works for a point or two, but back down we come.
Now we have a down trend as we can see in hindsight from just after the open, but this bounce from F at 77 to just above H at 84 is a pretty serious recoil. I even have the DL drawn in and it has a higher low.
A fellow member has been emailing me and pointed out how, or rather reminded me, just as Db says, that losing the lines is important. They do get broken, and are very arbitrary depending on how you draw them is what I am myself seeing. They help, but can't be used religiously. They are only mean to show you when price is moving up or down.
I - Anyway, after saying all that, if we do draw in the next SL, we have a RET here for a short. It ultimately fails, but if we get out at the line break or just above, its a BE trade. There is still a LH and LL, so really, our down trend hasn't ended, just our SL has broken. This makes the entry difficult mind you, and you're in negative territory for a while if you keep holding, but the proper entry is higher up anyway so this is just a recoil that breaks the SL in an otherwise down trend.
J - Now this is just another lower high right now, but its used later.
K - This is just another lower low for now, but it too has significance.
L - Here we fail to make a lower low, so I'm gonna watch this level to see if we drop below. We have after all fanned our SL a few times, so the down trend is running out of steam.
M - Here we actually make a higher high, but it matches the level at J, so I can draw this line, and I'm setting up a range here.
N - Here we drop below, and I'm inclined to take a short perhaps, thinking that we are now going below this area of congestion, but it ultimately doesn't go anywhere.
P - We ever so slightly go above the J-M resistance line, but turn back down again. Selling at 75 and buying at 70 is money in the bank!
Q - Is this a hinge? When a hinge happens in a range, its just part of the range mostly, but perhaps this can launch a good move. Ideally we would also either go above 75 or below 68 to really have faith in the move. I should also point out that all of this is happening around the overnight low at 72, the mean of all of this action for the past hour is this 72 level.
Oppps... took the screen capture of my chart too late so we can see how we just trickle out into more sideways action, not a huge surprise given how price got too squeezed, its supposed to exit before the hinge closes for the move to have strength, and it also happens in a well defined range, so another negative for the hinge this time.
SUMMARY
So only one trade, and obviously for money reasons to stay positive today. I felt very sure about what I outlined at the beginning, the first long followed by the short, but I didn't take them because its not tested. I can also say now that we failed to reach the overnight high, so that makes the short also have more strength, but so much of this is after the fact realization.
We have a very clear down trend, but the SLA entries are a bit problematic if I get freaked out with price going against me 2 or 3 points, which I do. But it is a move down of 20 points, 10 of which would almost be easy to capture.
Also showing a second chart. As I type this, the hinge action cleared itself up, but when I look on my other monitor where I have a more compressed one minute chart, here is what I see. I see the range, the top pink line. I also see price getting squeezed up against the upper resistance line by way of the line that tracks price up, the DL I guess, although I draw it in thick to not be a DL but to show the effect of this squeeze, and I see the little break. Sure enough, it takes off! Once it takes off, it has left the range, and its a good reason to take a long. There is even a nice RET in there with one point above getting you in the move at roughly 77 worth a solid 5 points now, a very low risk 5 points is what I figure based on my observations thus far of seeing this behavior in ranges.
A - Just before the open we have a tight little range which holds for a minute or two, with the upper resistance line at the open indicated by this line.
B - Any attempts to go lower are bought up, forming higher lows. I am already visualizing these lines before I draw them in. Basically, if we can break above A, it should be a good move. I could enter long at one point above A.
Now when I look on the one minute, I don't see this, I just have to wait until we get to C. The SLA entry could be at one point above this, indicated by the green arrow on the one minute, but it never triggers. In the 15 sec, we see a few attempts to breach 3990 but can't. A previous swing low at D is what I'm gonna watch.
D - For 3 minutes we are in this tight range, but once price drops below D, down we come!
I know that I mentioned how crazy it is to take trades off the 15 sec, but using this in conjunction with the 1 minute which shows you the general trend is I think a winning combination. I guess in a way I am thinking about just making a few points. I need the steady stream of points, I want the wins, the consistency. The market is a bit choppy these past few weeks, maybe this is what the summer session is all about. Db does after all say you have to characterize your market, and doing this for an entire year would be great, and so if this is what the summer is like, then I cannot hold through deep RETs as I am seeing with my trading thus far. I get stopped out, I enter moves too late.
Anyway... moving on.
E - So the drop brings us below the opening price, and although we have some hesitation here, I do put in some sell stops in accordance with SLA. The second one is moved up to reflect the higher low on the bar. I get a fill as you can see and draw in my SL. I have seen in the past how I could just get a fill for a short at what turns out to be a higher low, so I'm watching very closely.
F - My exit is above here. I see the bounce, I realize that 79 was a level of congestion yesterday I outlined, and because I am trading by way of my P&L, which is bad, and because I need a good day, for emotional reasons, which is just as bad, I'm out. (at least I had a solid reason based on price!)
As it turns out, our SL does break, so the exit isn't so bad.
I'm up $56.
G - So we just every so barely breach the SL but come back down, perfect for a re-entry. I don't take it, but its marked where it should be. It would fill, just before price shoots back up.
H - In fact, this could almost set up a long here. If we wanted to be anal, which I guess you can't be with trading, gotta be more fluid, but we could say this is a RET for a long, which happens just at the SL break. Works for a point or two, but back down we come.
Now we have a down trend as we can see in hindsight from just after the open, but this bounce from F at 77 to just above H at 84 is a pretty serious recoil. I even have the DL drawn in and it has a higher low.
A fellow member has been emailing me and pointed out how, or rather reminded me, just as Db says, that losing the lines is important. They do get broken, and are very arbitrary depending on how you draw them is what I am myself seeing. They help, but can't be used religiously. They are only mean to show you when price is moving up or down.
I - Anyway, after saying all that, if we do draw in the next SL, we have a RET here for a short. It ultimately fails, but if we get out at the line break or just above, its a BE trade. There is still a LH and LL, so really, our down trend hasn't ended, just our SL has broken. This makes the entry difficult mind you, and you're in negative territory for a while if you keep holding, but the proper entry is higher up anyway so this is just a recoil that breaks the SL in an otherwise down trend.
J - Now this is just another lower high right now, but its used later.
K - This is just another lower low for now, but it too has significance.
L - Here we fail to make a lower low, so I'm gonna watch this level to see if we drop below. We have after all fanned our SL a few times, so the down trend is running out of steam.
M - Here we actually make a higher high, but it matches the level at J, so I can draw this line, and I'm setting up a range here.
N - Here we drop below, and I'm inclined to take a short perhaps, thinking that we are now going below this area of congestion, but it ultimately doesn't go anywhere.
P - We ever so slightly go above the J-M resistance line, but turn back down again. Selling at 75 and buying at 70 is money in the bank!
Q - Is this a hinge? When a hinge happens in a range, its just part of the range mostly, but perhaps this can launch a good move. Ideally we would also either go above 75 or below 68 to really have faith in the move. I should also point out that all of this is happening around the overnight low at 72, the mean of all of this action for the past hour is this 72 level.
Oppps... took the screen capture of my chart too late so we can see how we just trickle out into more sideways action, not a huge surprise given how price got too squeezed, its supposed to exit before the hinge closes for the move to have strength, and it also happens in a well defined range, so another negative for the hinge this time.
SUMMARY
So only one trade, and obviously for money reasons to stay positive today. I felt very sure about what I outlined at the beginning, the first long followed by the short, but I didn't take them because its not tested. I can also say now that we failed to reach the overnight high, so that makes the short also have more strength, but so much of this is after the fact realization.
We have a very clear down trend, but the SLA entries are a bit problematic if I get freaked out with price going against me 2 or 3 points, which I do. But it is a move down of 20 points, 10 of which would almost be easy to capture.
Also showing a second chart. As I type this, the hinge action cleared itself up, but when I look on my other monitor where I have a more compressed one minute chart, here is what I see. I see the range, the top pink line. I also see price getting squeezed up against the upper resistance line by way of the line that tracks price up, the DL I guess, although I draw it in thick to not be a DL but to show the effect of this squeeze, and I see the little break. Sure enough, it takes off! Once it takes off, it has left the range, and its a good reason to take a long. There is even a nice RET in there with one point above getting you in the move at roughly 77 worth a solid 5 points now, a very low risk 5 points is what I figure based on my observations thus far of seeing this behavior in ranges.
I just fully believed that today would be a big drop and I'm so happy to have gotten in early.
