Trading Price:Phase One:Observation

[SIUYA]

I've tried that but it didn't go very far. Focusing on the line or lines makes it abstract, and people start focusing on the lines rather than on price (like the Darvas Box), and price movement is where it's at, not what sort of line the movement creates. Learning to trade via lines becomes analogous to learning how to play the piano by painting numbers on the keys.

So after several years of futzing with various kinds of lines, I focused on the tick, i.e., the transaction, and for whatever reason people begin to understand. And once one begins to understand, the fear begins to evaporate. And once the fear evaporates, one can get down to business.

Just for clarity - I meant the line which is the price. - not demand lines, trend lines, horizontal lines.
For those who can watch the tick line that fine, for other even a 5min line of the close (or a series of three lines close, high, low) to see the flow and extremes.

Its always and interesting issue of what makes something click for different people, and maybe the abstract works for some, of for others its a narrative they can relate to, and you are spot on - you need to get to the essence of something to eliminate that fear (of loss, or being right or wrong, of mummys wrath or whatever) however its done.
You have a lot of experience in teaching others and I so I defer to you. Personally I relate more to abstract ideas so I thought it a suggestion. Everyone needs to find their own ways of seeing the world.

(its kind of fascinating in its own right and for those interested check out 'threshold concepts' http://www.etl.tla.ed.ac.uk/docs/ETLreport4.pdf --- totally off topic but worth 15mins of reading just for the cooking example)

 

[boru]

Well, no. To do so results in counter-trend trading. Buyers buy on both upwaves and downwaves just as sellers sell since each transaction requires both. Their motives, however, will be different according to circumstances. Professionals, for example, will buy declining prices in order to support them. Amateurs will buy in an effort to catch a falling knife. But whereas professionals will tend to hold onto what they've bought and accumulate a position, amateurs will more often panic and throw their shares back onto the market as sellers. This helps fuel the cascade.

There are all sorts of misconceptions about supply and demand and buying pressure and selling pressure. I've attempted to correct a couple. But for the purposes of this phase of plan development, let's just say that the idea of demand overwhelming supply does not mean that buyers are beating sellers into submission and wresting the shares or contracts from their death grips; it means rather that buyers are more than happy to pay whatever sellers are asking because they anticipate being able to sell what they've bought at a higher price. Why else would they buy in the first place? Sometimes buyers are manipulated into paying ever-higher prices. Sometimes sellers sell too soon and smack themselves for having done so. There's really no way of knowing until the music stops and you have a sort of Wile E. Coyote moment where there's nothing under buyers to support them.

This is much easier to see on a 1t chart. Those plunges you see so often, such as the one after the Fed announcement, can literally consist of empty space. If one is plotting a bar chart or a line chart, it looks like there are trades all the way down, but this is not necessarily the case. One transaction may be far below the last, but, again, unless one is looking at a 1t chart, this will be masked. This becomes not a matter of buyers supporting the price all the way down but rather there being no buyers at all.

Thank you for opening this thread thread, I thought I had an understanding of buying/selling, looking forward to this.

 

[green.green]

This one to me looks like you have an established uptrend. There isn't too much excitement on either side of the market. Bar 37 shows an effort to move higher followed by 6 bars of coiling before it expands to take out the previous swing.

Bar 37, 40 and 44 all show strong buying but that doesn't result in any movement. Bar 44-48 shows the market searching on both sides to complete trades. There is the dip below bar 40, up above the high of 37, back to the midpoint of the swing and then makes one more high followed by the rejection at bar 49. Volatility dies back down as the bottoms hold while the tops decrease.

From bar 61 -64 we can see some expansion. Buyers seem to be trying to hold the market up but they aren't making any progress higher. The market looks bearish.

 

[dbphoenix]

Buyers seem to be trying to hold the market up but they aren't making any progress higher. The market looks bearish.

The chart to which you're referring takes us up to a few minutes before the open.

The following chart includes the first few bars. Does this alter your assessment?

 

[boru]

10. Price has declined low enough that buyers are buying aggressively enough to halt the decline and lift price to the highs just prior to 20.

20.-40. I always thought that the price rise from 20-40 was due to buyers being more aggressive than sellers, but if I understand you correctly its the sellers who are in control, because they will be able to sell at a higher price. Also the buyers who bought at 10 or 20 or 30 will be able to sell at 50-60 and make a profit.

50. buyers are unwilling to pay higher prices and are also taking profits.

60. I don't see aggressive short selling yet but the LHs suggest weakness.

 

[green.green]

The chart to which you're referring takes us up to a few minutes before the open.

The following chart includes the first few bars. Does this alter your assessment?

I know the date is front and center on all of these but I'm trying to look at them independently.

I think the market looks more bearish after the extra bars on the updated chart have completed but obviously there is the 10 points I would have missed with a bearish point of view. After the spike up again there is no follow-through and at least one more move up which is again rejected before some temporary agreement was reached between buyers and sellers.

Your question suggests I'm missing the mark? Am I off in left field?

 

[dbphoenix]

I know the date is front and center on all of these but I'm trying to look at them independently.

I think the market looks more bearish after the extra bars on the updated chart have completed but obviously there is the 10 points I would have missed with a bearish point of view. After the spike up again there is no follow-through and at least one more move up which is again rejected before some temporary agreement was reached between buyers and sellers.

Your question suggests I'm missing the mark? Am I off in left field?

Missing the mark? I wouldn't say so. Since you picked up on the date, you know what happened next:

 

[dbphoenix]

These posts represent the payoff for learning how to observe. I understand why so many would rather skip this and move on to setups and entries and trading, but by doing so one learns to look for setups and entries and trades and never really sees price. Therefore it takes him far longer to make money, if he ever does, than someone who's laid the groundwork.

 

[eminiman414]

After the open I could feel that price did not want to go higher and was going to drop. That "feeling" is that a good thing or something that should be avoided? Not that I felt any emotion towards it, just more intuitive. Could that lead to problems because I've been getting that a lot lately.

 

[dbphoenix]

After the open I could feel that price did not want to go higher and was going to drop. That "feeling" is that a good thing or something that should be avoided? Not that I felt any emotion towards it, just more intuitive. Could that lead to problems because I've been getting that a lot lately.

The observations made in the above posts beat feelings. If you can articulate the reasons for your feelings, you'll be way ahead.