Trading NQ via Price Action
- Thread starter k p
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No update today. I put the ego aside and dug right back into the AMT-SLA pdf Db provided. Its a much easier read now after so many months, so I'm not exactly starting fresh again.
Its interesting that when you completely put the money aside and take a slightly wider view, this isn't all that complicated. Of course when you hunt for exact entries with money on the line there is more at stake and getting the entry right seems more important. But by following the rules each and every time, knowing that you might be in and out a few times, and not even caring, but just doing what you're supposed to do, then its quite possible to make this work.
Its interesting that when you completely put the money aside and take a slightly wider view, this isn't all that complicated. Of course when you hunt for exact entries with money on the line there is more at stake and getting the entry right seems more important. But by following the rules each and every time, knowing that you might be in and out a few times, and not even caring, but just doing what you're supposed to do, then its quite possible to make this work.
Something interesting that I've been thinking about I wanted to share. If I put all the issues of fear aside (this is a big if at the moment!! 
), but if I do, then here is a thought experiment.
So suppose I'm in a trade that is doing well and then seems to stall. I could just get out and count my money, perfectly sensible. But often times, we see how this turns out to just be a pause/congestion. Now there is nothing wrong with getting out of a trade when you're not quite sure what is happening, but the reason for getting out I think makes all the difference. If the exit is based on thinking that price will turn on me, then why not just take the opposite side of the trade now. If I'm long 1 contract, then just sell two so that now I'm short. But if I don't have the confidence to take the short, then I must be thinking that it might not go down. So if I'm not confident enough in it going down, then why did I exit my long in the first place?
Like I say, its perfectly fine I'm sure to just get out when you're not sure what is happening, but once you get all the fear and issues out of the way, then this question has merit I believe. Perhaps its different if you aren't yet in a trade, then it makes sense to see which way the market is heading first. But if already in a trade, I would think that logically, if I'm not prepared to go short right where I exit the long, then perhaps I shouldn't be thinking of exiting the long in the first place.
I've been thinking like this in the past few days. I've been noticing so many entries in my old charts, and exits at the worst possible places. I'm seeing how the entire move is usually missed, and then I would lose even more money trying to trade a reversal that never happens. Focusing on the forest, looking at the hourly/daily charts, its just amazing how doing less usually means doing it better. Holding over night just means that my trade is working for me while I'm sleeping.
The past few weeks have been exceptional in that we have had such big moves, and have gone from the top of the channel to the bottom and almost back again in only a few weeks. I don't want to have the false expectation that huge moves like this are common and that its easy to just get on the train and keep riding it. But I certainly see that if one knows what to look for and gets in where the major levels are rejected or decisively broken, then so much of this agonizing over this constant fight between the day traders and patterns and entries and profit targets can be just watched without getting lost in the shuffle.
This is of course the theme of Db's Potential NQ Target thread. Trying to make sense of this constant minute by minute push and pull is like, to borrow a quote, rearranging the deck chairs on the Titanic. If the ship is going down, its going down, so don't get distracted by the overwhelming trend. This also comes back to what Db said a few months back about how traders either want to trade or make money. I certainly see how more trading does not lead to more profits. More trading is a result of fear, an ego boost to get more winning trades in perhaps, or who knows what else. Perhaps you can make the case that a 300 point drop between a channel top and bottom can actually be 600 points if you add up all the ups and downs along the way. But for me personally, I think I want to work less.
The trick of course is knowing where to get in, which itself might take a few trades, but getting out has to be for the right reasons as well. Sometimes watching a 30 point gain turn to only a 10 point gain might be the end result. But often I see the NQ inch its way up or down all day, making a fairly significant retracement along the way, only to recover by the end of the day and reach much higher. So the question is, is it more profitable in the long run to watch your trade retrace 50% of the move before you bail, or do you bail just because you have a lower high and lower low when in a long trade? I think that those times where you're up 30 points and then exit for only 10 are much fewer than the times where that 30 points ends up actually going 50 points, even if this means having to hold over night or for a few days.
), but if I do, then here is a thought experiment. So suppose I'm in a trade that is doing well and then seems to stall. I could just get out and count my money, perfectly sensible. But often times, we see how this turns out to just be a pause/congestion. Now there is nothing wrong with getting out of a trade when you're not quite sure what is happening, but the reason for getting out I think makes all the difference. If the exit is based on thinking that price will turn on me, then why not just take the opposite side of the trade now. If I'm long 1 contract, then just sell two so that now I'm short. But if I don't have the confidence to take the short, then I must be thinking that it might not go down. So if I'm not confident enough in it going down, then why did I exit my long in the first place?
Like I say, its perfectly fine I'm sure to just get out when you're not sure what is happening, but once you get all the fear and issues out of the way, then this question has merit I believe. Perhaps its different if you aren't yet in a trade, then it makes sense to see which way the market is heading first. But if already in a trade, I would think that logically, if I'm not prepared to go short right where I exit the long, then perhaps I shouldn't be thinking of exiting the long in the first place.
I've been thinking like this in the past few days. I've been noticing so many entries in my old charts, and exits at the worst possible places. I'm seeing how the entire move is usually missed, and then I would lose even more money trying to trade a reversal that never happens. Focusing on the forest, looking at the hourly/daily charts, its just amazing how doing less usually means doing it better. Holding over night just means that my trade is working for me while I'm sleeping.
The past few weeks have been exceptional in that we have had such big moves, and have gone from the top of the channel to the bottom and almost back again in only a few weeks. I don't want to have the false expectation that huge moves like this are common and that its easy to just get on the train and keep riding it. But I certainly see that if one knows what to look for and gets in where the major levels are rejected or decisively broken, then so much of this agonizing over this constant fight between the day traders and patterns and entries and profit targets can be just watched without getting lost in the shuffle.
This is of course the theme of Db's Potential NQ Target thread. Trying to make sense of this constant minute by minute push and pull is like, to borrow a quote, rearranging the deck chairs on the Titanic. If the ship is going down, its going down, so don't get distracted by the overwhelming trend. This also comes back to what Db said a few months back about how traders either want to trade or make money. I certainly see how more trading does not lead to more profits. More trading is a result of fear, an ego boost to get more winning trades in perhaps, or who knows what else. Perhaps you can make the case that a 300 point drop between a channel top and bottom can actually be 600 points if you add up all the ups and downs along the way. But for me personally, I think I want to work less.
The trick of course is knowing where to get in, which itself might take a few trades, but getting out has to be for the right reasons as well. Sometimes watching a 30 point gain turn to only a 10 point gain might be the end result. But often I see the NQ inch its way up or down all day, making a fairly significant retracement along the way, only to recover by the end of the day and reach much higher. So the question is, is it more profitable in the long run to watch your trade retrace 50% of the move before you bail, or do you bail just because you have a lower high and lower low when in a long trade? I think that those times where you're up 30 points and then exit for only 10 are much fewer than the times where that 30 points ends up actually going 50 points, even if this means having to hold over night or for a few days.
If I put all the issues of fear aside (this is a big if at the moment!!
The decline in fear related to trading is not inversely proportional to time, it is inversely proportional to having a set plan, understanding it and being able to execute it accordingly, if and when required. Fear dissipates with having an exit strategy in place before an entry is taken.
Most trades in a trend fail to break out in the opposite direction. The statistical results of the failure is dependent on many variables. So unless you have a concrete reason (and just having an intuition is NOT a valid reason).
Also, note that, when trying to set yourself up for a fade, you do not have to be very erratic (most times) so as to have to immediately cover and reverse. The only time it may hold valid is if on entry your perspective is proven wrong and the trade has the potential of having a decent move in the opposite direction with a good R:R.
Take this and include it as part of your Top 100 trading quotes.
As mentioned earlier (reversal trades fail most times). So now that you are seeing a pattern, research it persistently. In time, this will help keep you in a trade, or at best prevent you from getting into trades that will lose you money.
Each to his own on this, as it could work very detrimentally against you. You can always hedge yourself accordingly or have some sort of protection, which allows for a good nights sleep.
If this is the approach you prefer, it may work. However, you will quickly realize that in return for soothing the agony, you will be minimizing you profits, extending your losses and have a skewed R:R at times. To overcome this, you will have to be VERY selective in the trades you take and you will only have a few viable trades that qualify.
You will surely benefit from using the longer term charts for extracting information, but if you do not switch quick enough to trade that information in day trading mode, it may hurt you.
Day trading is a very different game from swing and position trading.
@k p I hold you to a higher standard and for that reason you should dissect the above quote on your own and state the multiple scenarios and outcomes they may have.
For one, a 50% retracement has an easy 3 trades in it. The first long, followed by a short and finally, the second long; all with decent R:R. What if the retrace fails to take off and falls flat? That is a lot of time and energy wasted. I will hold myself back here and allow you to do the research (it'll just get drilled in better that way).
Just remember, trading is not about being +ve in your PnL. It is about how well you trade. That is reflected by how much you leave on the table or take from it, how you conserve your energy and mental equity, and how effectively you make use of the allocated time. The aim is to squeeze every last penny the market is going to have on offer (and that will come with time).
Just a quick post. So the context for today really was being quite close to the ultimate high of 4120, but of course also the PDH of 4100. Overnight we had a fairly big drop when we opened but have climbed up since then. Since the FED news is today, it made sense that perhaps traders would be cautious. We're very close to a top, we have made such a huge climb up, but I guess nobody knows right now which way we will go, if we do break higher, or reject these highs.
A - Before the open, I notice a fairly wide hinge.
B - Just as I draw it in, it breaks. When things happen this quickly and the volume is so huge, especially for overnight, to me it must be stops getting run. So then I wonder if the buying interest is really there just yet.
C - We see price retrace 50% of this move and eventually drop down.
D - After the open we drop down but stop short of the hinge bottom, but we can also think of this as our 5 min SL that we don't even reach.
E - This is as high as we can go as well. So for a few minutes, we have a very short term hinge as well perhaps, or rather traders trying to find trades and wondering where we go from this opening range.
F - After we try down again below this but can't go further, I mark in this long (we can even reach the previous low). Granted, I might be buying at the top if this turns out to be a trading range, but since the lows just before this are higher than D, and in the back of my head I'm thinking we might at least test the PDH, its easy to mark this in.
G - Going up almost 10 points and then enter some consolidation. On the 15 sec chart, a hinge complete with an apex really stands out, and even 6 bars later I can see how price comes up to test the apex of this hinge, but this is so micro that I just don't want to act on it, although I can't help seeing it.
H - The drop down stops just short of 50% of this up move so this shows strength.
I - Unable to clear the previous high, and the micro DL drawn below breaks on the next bar.
J - Beautiful RET here, so although we had strength at the 50% level, we couldn't make a HH, so a short here makes sense to at least the low at H.
K - We cannot penetrate the previous low at D.
L - Once again, we stop at 50%, but this time, its 50% of the down move. So now we can see strength in this down move.
M - Lower high from L, a short below this might work, but I don't really get a chance to mark this in.
N - Very quickly we come down to here and even break below D and K, although this is bought up quickly.
SUMMARY
Ok... I know, marking possible trades and explaining what happened isn't getting me that much closer to putting on profitable trades, but I just wanted to focus today on price. Could I place these trades in a SIM environment? Of course! Now I'm not sure where the exits would be, and this is of course critical to trading, so to most people reading this, they might find all this to be crap which is fine. But I don't know... it makes sense to me to follow price like this. I do fully realize that testing to make use of this is critical, so there is unfortunately lots left to do.
A - Before the open, I notice a fairly wide hinge.
B - Just as I draw it in, it breaks. When things happen this quickly and the volume is so huge, especially for overnight, to me it must be stops getting run. So then I wonder if the buying interest is really there just yet.
C - We see price retrace 50% of this move and eventually drop down.
D - After the open we drop down but stop short of the hinge bottom, but we can also think of this as our 5 min SL that we don't even reach.
E - This is as high as we can go as well. So for a few minutes, we have a very short term hinge as well perhaps, or rather traders trying to find trades and wondering where we go from this opening range.
F - After we try down again below this but can't go further, I mark in this long (we can even reach the previous low). Granted, I might be buying at the top if this turns out to be a trading range, but since the lows just before this are higher than D, and in the back of my head I'm thinking we might at least test the PDH, its easy to mark this in.
G - Going up almost 10 points and then enter some consolidation. On the 15 sec chart, a hinge complete with an apex really stands out, and even 6 bars later I can see how price comes up to test the apex of this hinge, but this is so micro that I just don't want to act on it, although I can't help seeing it.
H - The drop down stops just short of 50% of this up move so this shows strength.
I - Unable to clear the previous high, and the micro DL drawn below breaks on the next bar.
J - Beautiful RET here, so although we had strength at the 50% level, we couldn't make a HH, so a short here makes sense to at least the low at H.
K - We cannot penetrate the previous low at D.
L - Once again, we stop at 50%, but this time, its 50% of the down move. So now we can see strength in this down move.
M - Lower high from L, a short below this might work, but I don't really get a chance to mark this in.
N - Very quickly we come down to here and even break below D and K, although this is bought up quickly.
SUMMARY
Ok... I know, marking possible trades and explaining what happened isn't getting me that much closer to putting on profitable trades, but I just wanted to focus today on price. Could I place these trades in a SIM environment? Of course! Now I'm not sure where the exits would be, and this is of course critical to trading, so to most people reading this, they might find all this to be crap which is fine. But I don't know... it makes sense to me to follow price like this. I do fully realize that testing to make use of this is critical, so there is unfortunately lots left to do.
Attachments
Beautiful... just beautiful. I see this 100%, and fully understand both the point about the inverse proportionality as well as the need for exit strategy fully in place.
The only thing for me at the moment, as per even my post today, is that this exit would be based on price telling me as opposed to a set price level in mind. As per KDA who I've been conversing with, this may be a problem in that it seems to me that this could be a little random. One day I could claim a consolidation area means trouble so get out, and another time I can say its only consolidation so no need to leave. The expert trader I think already has a very firm grasp of what good and bad consolidation areas look like, so he might be able to do this, but I do grant that my exits wouldn't be based nearly enough on statistical outcomes.
Exactly, and hence why I am of the belief that exiting a trade better damn well be because I really believe that price will drop so much that the opposite trade can be taken, otherwise, the need to exit just isn't strong enough.
OMG... did I actually finally get something right???
My feeling on this is that in a strongly trending market, just we've had these past few weeks with straight down and then straight up again, I would be losing too many points by not getting in on the overnight moves. Being on the west coast, I can't get up early enough to take advantage of the good moves that happen at 3 or 4 AM ET. The stop loss order would be in place, so if I'm stopped out over night, so be it. And the idea is that I'm only staying overnight if already into profit, not that I"m holding a loss overnight. So at worst, I would give up 50% of my profit to stay in the game. I think over enough instances of this, the few times I lose will more than make up for waking up to another 30 or 40 point gains. But of course, testing is key.
I think where I'm going with this is that day trading will get me into traders, but I see that holding through the day is usually more profitable than following every swing. Yesterday is good example. I saw the long opportunity right after the open at 4057, and then there was this huge consolidation with a mean of 4072. Then we broke out to 4080 followed by a big drop to 4070 again, but still finished the day at 4090. Of course we can't tell that it will go up, but I worry that trying to trade up, then down, then back up again might not be any better than just leaving the first long alone and seeing that we haven't retraced more than 50% of the up move.
Yes, drilling it into myself will for sure be the better way. As you say, conserving energy and mental equity is key, hence why I think in the long run, trading less will be easier, but I fully understand what this may do to a R:R ratio. There are times where getting into a trade might take a few tries, so I think small losses and exiting is prudent, but being able to take a short minutes after just exiting a short is perhaps the way to keep losses small but making sure to get into the trade. I know myself I would hate to take the same trade that I just took, but this is an emotional excuse and has no place in trading.
I should mention that these longer term trades are only attractive at certain areas as outlined by AMT. These very long term trend channels would set these up. Bouncing off from the top or bottom would be where, as well as perhaps bouncing off from the mean. If I didn't get in on a move like this, then yes, being in the middle of nowhere means taking what you can get and doing more trades perhaps through the day. But when you see a very long term level being rejected or supported strongly on the hourly or daily charts, constantly being in and out just doesn't make sense if a major low or high has been rejected.
How I'm going to learn to hold for 30 points profit when I can barely hold for a few points right now I don't know, but its something I will have to learn. I just cannot continue like I did in the past by taking small profits and holding the losers hoping they turn around. This is clear stupidity.
I really want to thank you AT for your reply. I was hesitant about posting all of this because it sounds like I'm all over the place, which in a way I am, but I really do thank you for focusing on just the content of what I'm thinking and making comments specifically about the strategy.
Ps. Isn't there a bit of a contradiction in your quote above about trading not being about a postive PnL, but rather about trading well? You end with saying your aim is to extract every last penny... so this would be about a positive PnL, no?
Trading well is important, but when you trade well, that PnL should naturally fall into place of course, so I do get it. The question of course is does trading less lead to more profits. There has been 400 points between the low at 3700 and 4100. Of course calling the top and bottom is hard, so lets say 300 could be captured. Saying this, was someone able to capture more than 300 points along the way in the past 2 weeks? Granted, the market doesn't move this quickly all the way down and all the way up again, but its still an interesting thought.
@k p no need to thank me. Life is a long journey with it's little funny twists and turns. Playing a part in improving someone else's life is the least one can do. Saying a little prayer for us should suffice.
I was hesitant about posting all of this because it sounds like I'm all over the place, which in a way I am, but I really do thank you for focusing on just the content of what I'm thinking and making comments specifically about the strategy.
Anyone that seems a good trader here, has been there, done that (being all over the place). You seem a far better "trader" than I in my "hey days!!!"
Ps. Isn't there a bit of a contradiction in your quote above about trading not being about a positive PnL, but rather about trading well? You end with saying your aim is to extract every last penny... so this would be about a positive PnL, no?
The consequence of trading well is a better PnL most times. In holding the notion of "trading well", consistency (with good profits) comes to light. Without consistency, your takings for the day mean nothing, as it is only a matter of a few hours before you give it away to someone. It is a zero sum game after all.
The answer is yes and no. Look at the results produced by position traders and day traders (and maybe scalpers, which has further sub-definitions to it). In general, the smaller the time frame, the smaller the rewards and better the risk management and vis-versa. In short, for giving up the work effort of trading the lower time frame, you pay by reducing your returns.
It's virtually impossible on a consistent basis. Calling tops and bottoms is what newbies do.
I am sure there are a few who may have (using various methods), but most of them are not on ET or any other forum unfortunately.
KP.... what part of the west coast do you live in?
cheers
toucan
cheers
toucan
Beautiful... just beautiful. I see this 100%, and fully understand both the point about the inverse proportionality as well as the need for exit strategy fully in place.
The only thing for me at the moment, as per even my post today, is that this exit would be based on price telling me as opposed to a set price level in mind. As per KDA who I've been conversing with, this may be a problem in that it seems to me that this could be a little random. One day I could claim a consolidation area means trouble so get out, and another time I can say its only consolidation so no need to leave. The expert trader I think already has a very firm grasp of what good and bad consolidation areas look like, so he might be able to do this, but I do grant that my exits wouldn't be based nearly enough on statistical outcomes.
Exactly, and hence why I am of the belief that exiting a trade better damn well be because I really believe that price will drop so much that the opposite trade can be taken, otherwise, the need to exit just isn't strong enough.
OMG... did I actually finally get something right???
My feeling on this is that in a strongly trending market, just we've had these past few weeks with straight down and then straight up again, I would be losing too many points by not getting in on the overnight moves. Being on the west coast, I can't get up early enough to take advantage of the good moves that happen at 3 or 4 AM ET. The stop loss order would be in place, so if I'm stopped out over night, so be it. And the idea is that I'm only staying overnight if already into profit, not that I"m holding a loss overnight. So at worst, I would give up 50% of my profit to stay in the game. I think over enough instances of this, the few times I lose will more than make up for waking up to another 30 or 40 point gains. But of course, testing is key.
I think where I'm going with this is that day trading will get me into traders, but I see that holding through the day is usually more profitable than following every swing. Yesterday is good example. I saw the long opportunity right after the open at 4057, and then there was this huge consolidation with a mean of 4072. Then we broke out to 4080 followed by a big drop to 4070 again, but still finished the day at 4090. Of course we can't tell that it will go up, but I worry that trying to trade up, then down, then back up again might not be any better than just leaving the first long alone and seeing that we haven't retraced more than 50% of the up move.
Yes, drilling it into myself will for sure be the better way. As you say, conserving energy and mental equity is key, hence why I think in the long run, trading less will be easier, but I fully understand what this may do to a R:R ratio. There are times where getting into a trade might take a few tries, so I think small losses and exiting is prudent, but being able to take a short minutes after just exiting a short is perhaps the way to keep losses small but making sure to get into the trade. I know myself I would hate to take the same trade that I just took, but this is an emotional excuse and has no place in trading.
I should mention that these longer term trades are only attractive at certain areas as outlined by AMT. These very long term trend channels would set these up. Bouncing off from the top or bottom would be where, as well as perhaps bouncing off from the mean. If I didn't get in on a move like this, then yes, being in the middle of nowhere means taking what you can get and doing more trades perhaps through the day. But when you see a very long term level being rejected or supported strongly on the hourly or daily charts, constantly being in and out just doesn't make sense if a major low or high has been rejected.
How I'm going to learn to hold for 30 points profit when I can barely hold for a few points right now I don't know, but its something I will have to learn. I just cannot continue like I did in the past by taking small profits and holding the losers hoping they turn around. This is clear stupidity.
I really want to thank you AT for your reply. I was hesitant about posting all of this because it sounds like I'm all over the place, which in a way I am, but I really do thank you for focusing on just the content of what I'm thinking and making comments specifically about the strategy.
Ps. Isn't there a bit of a contradiction in your quote above about trading not being about a postive PnL, but rather about trading well? You end with saying your aim is to extract every last penny... so this would be about a positive PnL, no?
The question of course is does trading less lead to more profits. There has been 400 points between the low at 3700 and 4100. Of course calling the top and bottom is hard, so lets say 300 could be captured. Saying this, was someone able to capture more than 300 points along the way in the past 2 weeks? Granted, the market doesn't move this quickly all the way down and all the way up again, but its still an interesting thought.
So things are going to get pretty interesting I think. The action surrounding the news itself was interesting because although it looked like we were heading down, I was quite surprised by the rally back up.
Anyway, yesterday I didn't post, but I noted that there was a perfect place to go long as outlined on this first chart.
a - There was the range prior to the open with an attempt to go lower that was rejected.
b - A SL could have been drawn in that broke, although taking the first RET after this break within that range would cause a scratch/loss. This is before the open so I wouldn't be hunting yet, nor do I think I want to take each and every RET.
c - By the time we get to here, the range is shaping up nicely, and also the DL would break, which isn't a big surprise in a range.
d - We try down first, and seeing price come back up, I felt that a long was a high probability trade above the first bar after the open. It clearly worked.
---------
Now I brought this up just because as I'm looking at the hourly chart for today, I notice this long that I brought up yesterday is on this hourly chart at B. The DL that you see comes all the way from the low at 3684. It had to be fanned a few times, most recently at A. But notice how as the trade was setting up on the 1 minute chart, here on the hourly, we have more confirmation since price essentially bounced off the long term DL here.
Ok... so moving along...
C - We hit a high here of 4100 yesterday. There is the ultimate high from a month ago at 4119 marked, the red line, so by the end of the day, we didn't quite reach it to test it. (this is also why I had my long post yesterday about holding onto trades. The long that set up at 4057 was good for a solid 20 points or so before there was lots of sideways action and even shorts would set up. But nothing on the hourly chart would make one exit, and if you continued to hold, the trade ended up being worth 40 points if it was held till the end of the day. The next day/evening of course opened up much lower though)
D - ON, we broke the DL, which does often happen, but we could not make a HH so couldn't fan the line.
E - This high below here is as far as we could make it before price turned down.
F - After the news release, it was a surprise to see the drop stop, and I carry forward this previous swing low.
There is no trade here mind you that I could see at the time based on this swing point on the hourly chart. But I can now draw in a new SL and see where this goes. The short was already set up today just below E where I outlined in my post analysis for today before the news release. If I was in on it and still holding through the news release, once you see price get quickly bought up, it perhaps might be reason enough to collect some profits. But looking at it now, all we get is a lower high to connect our SL to.
So going into tomorrow, we will have to either break the highs at 4100, and then 4120 isn't far away, or perhaps break this low at F. Of course we could just go sideways too. Before we had the big plunge a month ago, we spent quite a bit of time going sideways and riding the upper channel line. All of this is happening right now between the upper channel line and the mean. If we have trouble making it to the top of the channel, then this will perhaps show that we have a change in trend and hence a new mean. So I think going forward things will be quite interesting.
(If Roffe is reading... I'd love your take since you seem to be quite good at this long term analysis. The guys who post less always seem to be better at this dammit! LOL)
Anyway, yesterday I didn't post, but I noted that there was a perfect place to go long as outlined on this first chart.
a - There was the range prior to the open with an attempt to go lower that was rejected.
b - A SL could have been drawn in that broke, although taking the first RET after this break within that range would cause a scratch/loss. This is before the open so I wouldn't be hunting yet, nor do I think I want to take each and every RET.
c - By the time we get to here, the range is shaping up nicely, and also the DL would break, which isn't a big surprise in a range.
d - We try down first, and seeing price come back up, I felt that a long was a high probability trade above the first bar after the open. It clearly worked.
---------
Now I brought this up just because as I'm looking at the hourly chart for today, I notice this long that I brought up yesterday is on this hourly chart at B. The DL that you see comes all the way from the low at 3684. It had to be fanned a few times, most recently at A. But notice how as the trade was setting up on the 1 minute chart, here on the hourly, we have more confirmation since price essentially bounced off the long term DL here.
Ok... so moving along...
C - We hit a high here of 4100 yesterday. There is the ultimate high from a month ago at 4119 marked, the red line, so by the end of the day, we didn't quite reach it to test it. (this is also why I had my long post yesterday about holding onto trades. The long that set up at 4057 was good for a solid 20 points or so before there was lots of sideways action and even shorts would set up. But nothing on the hourly chart would make one exit, and if you continued to hold, the trade ended up being worth 40 points if it was held till the end of the day. The next day/evening of course opened up much lower though)
D - ON, we broke the DL, which does often happen, but we could not make a HH so couldn't fan the line.
E - This high below here is as far as we could make it before price turned down.
F - After the news release, it was a surprise to see the drop stop, and I carry forward this previous swing low.
There is no trade here mind you that I could see at the time based on this swing point on the hourly chart. But I can now draw in a new SL and see where this goes. The short was already set up today just below E where I outlined in my post analysis for today before the news release. If I was in on it and still holding through the news release, once you see price get quickly bought up, it perhaps might be reason enough to collect some profits. But looking at it now, all we get is a lower high to connect our SL to.
So going into tomorrow, we will have to either break the highs at 4100, and then 4120 isn't far away, or perhaps break this low at F. Of course we could just go sideways too. Before we had the big plunge a month ago, we spent quite a bit of time going sideways and riding the upper channel line. All of this is happening right now between the upper channel line and the mean. If we have trouble making it to the top of the channel, then this will perhaps show that we have a change in trend and hence a new mean. So I think going forward things will be quite interesting.
(If Roffe is reading... I'd love your take since you seem to be quite good at this long term analysis. The guys who post less always seem to be better at this dammit! LOL)
