Well the reason for my feelings from today was after the initial long bar up the second bar after the long bar rejected lower prices but immediately after the 3rd bar rejects higher prices, makes a lower high, and the following few bars remained near the low of the second bar only moving up about halfway or so of the third bar. Sorry if this is confusing. All this bar talk lol.
Trading Price:Phase One:Observation
- Thread starter dbphoenix
- Start date
Price has a breakout above the congestion area. There's a brief retracement when price slowly comes down a bit an then there's a sudden surge upwards. Price shot up significantly very quickly and then has a quick drop. This is a drop though it holds above the congestion, suggesting demand, although not completely in charge, is also not completely out of the game yet.
There is an attempt by demand to push price up but it fails. Now just because one attempt failed doesn't directly mean the upside is a no go. It does open the possibility that the supply after thwarting that upside attempt might get bold and attempt to find value at lower price levels. Still, we can't forget the price is holding above the congestion and hasn't dropped below it.
The critical juncture, and now I know the price eventually dropped, is reached but is almost 50/50 in either direction. I do think seeing the price fluctuate within the bars might have given some indication of the struggle between demand and supply but just looking at static bars I can only conclude that there's uncertainty. There is a second attempt there, a meager attempt at that, but price fails to continue up and stays below. Another sign of demand unable to overcome supply. Still, all this is happening above the initial consolidation on the left.
So far supply has been doing the preventative work and keeping demand from seeking higher value. Whenever buyers tried to pay more the sellers started dumping in equal measure, satisfying the buyers.
When the eventual burst of supply shows up and price drops it becomes clear then that the supply is overwhelming demand. However, before that point, I would have not been able to tell which side had the upper hand, as in my view price could have gone either way. Although, I would have been ready in case price dropped as it was clear something strong was about to take place, as is evident by the serious struggle taking place. I actually might have had a slight bias towards the upside as we are getting higher lows :eek:.
Gringo
Bar 10 did not breach the high of bar 6 â breach of this would be a good stop
Bar 13/14 is a PB â good for a short entry from a trader needing confirmation (already know where the stop is so what are ya waiting on)
Bar 14 â 17 â the opens are higher than the closes â hmm must mean price is moving down
Bat 18 open higher than the close â hmm control shifting???
Bar 19 breaches the most recent near term down trend â exit
Bar 22/23 pullback that does not come close to breaching the recent low â long
Bar 23 / 25, 26 make a foundation for a up TLâ¦
Not to mention bar 25/26 have an equal low (think stop placement)
Not to mention the up TL grows steeper
Not to mention bars closes are higher than their opens (for the most part)
Bar 42 â wtf â the long party seems to have withered - time to exit
Bar 44 â 46 â a channel / PB to the down TL
Down TL holds (bar 41/42) / price breaks to the down side of the aforementioned
channel
Short
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Repeat as price dictates
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We do no get paid for entering winning trades..., we earn our money managing all trades - winners & losers alike
RN
Not confusing at all. Very astute observations.
At this point, I think that those who have participated get the general idea. I suggest that interested individuals post examples of "phenomena" that they didn't foresee, that they didn't expect, an opening that went in a completely different direction than they thought it would, a move that came out of left field. In this way we can look at what preceded it and determine whether or not the observations were faulty and if so how, or if the moves, whatever they might have been, were completely unforeseeable. This is not CouldaWouldaShoulda but Who'd've Thought, or What Did I Miss?
2 things of note that stood out which should always be warning signs to watch closely, as who would of thought. (from NQ june contract 21/3/2014 - at levels around 3700 - sorry no chart attached)
point 1) The one large up bar, engulfed any potential target one might have out of its previous range. This also happened in one move very quickly.
Implies a panic of sorts - not an orderly meeting of buyers and sellers matching.
Who would have thought it would do that after 4.5 hours of being in a similar sized range?
Then the almost as quick retracement gives you time to think.
In trying to observe price behavior as oppose to think of entries and exits.....
a) continuation of the recent move is the default for me. Recent move here was up, with a spike, buyers pushed it higher.
b) hence where would it be reasonable to think that there buyers are not going to be there and that sellers will hit a vacuum (that airspace whereby buyers step back and sellers are forced to hit any bid they can)
Point 2) The 4 bars of chop were at the breakout level, and showed buyers either ran into a wall of selling, and could not force prices higher, or the buyers who spiked it higher were not really aggressive buyers. (why buy it higher in panic then suddenly not be willing to push it again, who would have thought.)
If they were real buyers and wanted to hold it they might have stepped back into the range. 50% of this is a reasonable suggestion, to provide buying support again.
Then the sharp drop, on nothing into the range, and straight through, the mid point, and then straight through the bottom of the range tells you - buyers have left the building.
For those less aggressive or nimble, now is the time to think about trades as the scene has been set. ....the game has changed.
point 1) The one large up bar, engulfed any potential target one might have out of its previous range. This also happened in one move very quickly.
Implies a panic of sorts - not an orderly meeting of buyers and sellers matching.
Who would have thought it would do that after 4.5 hours of being in a similar sized range?
Then the almost as quick retracement gives you time to think.
In trying to observe price behavior as oppose to think of entries and exits.....
a) continuation of the recent move is the default for me. Recent move here was up, with a spike, buyers pushed it higher.
b) hence where would it be reasonable to think that there buyers are not going to be there and that sellers will hit a vacuum (that airspace whereby buyers step back and sellers are forced to hit any bid they can)
Point 2) The 4 bars of chop were at the breakout level, and showed buyers either ran into a wall of selling, and could not force prices higher, or the buyers who spiked it higher were not really aggressive buyers. (why buy it higher in panic then suddenly not be willing to push it again, who would have thought.)
If they were real buyers and wanted to hold it they might have stepped back into the range. 50% of this is a reasonable suggestion, to provide buying support again.
Then the sharp drop, on nothing into the range, and straight through, the mid point, and then straight through the bottom of the range tells you - buyers have left the building.
For those less aggressive or nimble, now is the time to think about trades as the scene has been set. ....the game has changed.
After the low on bar 6 we have a push upwards. Any attempt to bring the prices down is met with an immediate strong reaction back up to the highs of the range, and each drop ends at a higher low.
There is a sudden breakout on bar 24 and then no attempt to reverse the rise. Price consolidates into a series of small ovelapping bars in a slight uptrend, before breaking out again.
The massive rise on bar 37 seems to be the limit that buyers will pay for NQ right now, and we see a consolidation while they try to figure out if we are at value or need to reverse.
One attempt to reverse the rise at bar 4 fails, but no sign that anyone wants to buy at a higher price either, until we get another large bar at 44, which makes a big attempt to get below 37 and fails. It rises straight through the highs and the following bars cannot get back within the prices of the recent consolidation between bars 37 and 44.
By the time we reach bar 60, we have made a series of lower highs, but still not penetrated the previous consolidation. This will probably indicate a volume area to look out for when price trades near this area again.
There is a sudden breakout on bar 24 and then no attempt to reverse the rise. Price consolidates into a series of small ovelapping bars in a slight uptrend, before breaking out again.
The massive rise on bar 37 seems to be the limit that buyers will pay for NQ right now, and we see a consolidation while they try to figure out if we are at value or need to reverse.
One attempt to reverse the rise at bar 4 fails, but no sign that anyone wants to buy at a higher price either, until we get another large bar at 44, which makes a big attempt to get below 37 and fails. It rises straight through the highs and the following bars cannot get back within the prices of the recent consolidation between bars 37 and 44.
By the time we reach bar 60, we have made a series of lower highs, but still not penetrated the previous consolidation. This will probably indicate a volume area to look out for when price trades near this area again.
Since all of you will be spending hours in replay this weekend, I'd like to point out that this post is a good example -- though not the only one -- of what I'm talking about. It's not about how the market is trying to trick you or catch you or steal your money or any other such nonsense. It's about what price is doing and how it's doing it and where and when it's doing it. Only after one understands this approach and becomes adept at it can he even begin to thing about entries and exits (which will of course be the subject of other threads).
Incidentally, I've been asked what the hell happened at the open on Friday. Take a look at MSFT, GOOG, and QCOM. Futures are after all tied eventually to stocks, particularly those stocks which are most heavily-weighted in the NDX.
Been dragging my feet responding to see if anyone else would add their 2c
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This is the hardest chartâ¦, and probably the most beneficial to break down imo
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Volatility;
A condition where price chews on the same real-estate â repeatedly
Could be in the form of substantially overlapping adjacent bars
Could be over a period of time where wide bars retrace back (up or down) to the same price(s) previously covered during the session
I hate trading volatility â and this chart is fraught with it
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Bars; (-1) thru 3 form a range (not sure I would have taken the B/O trade though as it still early in the open)
Note â Bar (-1) is the first bar shown on the chart
Bar 4 â 18 form another range (with Bar 19 â 23 remaining in this range)
Bar 24 breaks the Bar 4-18 range & the bar (-1) â 3 range
Bar 25/26;
Do not make it above the close of bar 24
Do pull back to the top of the bar 4 â 18 range.., but doesn't breach it
Price then proceeds with an up move (this area is the first clear PA & where I would have entered â the stop being the breach of the top of the range formed by bars 4 - 18
Price proceeds up normally till bar 37 (long bars always give me pause) â likely I exit here
Bars 38 â 43 form a range / and canât breach the close of bar 37 â Iâm definitely out
Bar 44 â again long bars give me pause â Iâm observing
Note;
Now â one could say well price formed a range and pulled back (bar 44) to the up TL formed by the previous PA
I think that is hindsight
This PA is volatile and exhibiting weakness.., I would not be eager to enter long
Bars 45/46 â low's pierce the range formed by bars 38 â 43â¦, then moves up.., but doesnât breach the high of bar 44 â Iâm still observing
And again â weakness is present
Bar 47 breaches the high of bar 44 â 46 â but look where it closes (again shows weakness)
All bars past 47 are;
Volatile
Forming a range
Canât breach and sustain above the close of bar 47
I am still observing
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My overall assessment of this chart / PA
1 valid trade
A lot of observing required
Volatile PA present
Weakness from bar 38 on
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Aside;
Observing how price is acting around previous bar(s) opens and /or closes is important
S or R will, at times, form around these â then it possible to identify an entry with the stop placed just on the other side of either the clustered opens and/or closes
just a thought
RN
Sideways with downward drift
bar 5 lower high and lower low
bar 6 till 10 within overlap of bar 5
Slow Downmove
bar 13 penetration of low of bar 5
bar 14 lower high
bar 15 till 18 slow downmove
bar 18 but close higher than open
Slow Downmove halted and transformed into upmove
bar 19 and 20 price moves above overlap of 18 and 19
bar 21 relative long up bar
bar 22 lower high
bar 23 till 30 bar moves up to test high of bar 5
bar 31 higher low
bar 32 till 40 unhindered upmove
Upmove halted and transformed into downmove
bar 41 close lower than open
bar 42-44 breakedown of overlap of bar [40, 41] and downmove
bar 45 breaking top of bar 44, moderate pauze of downmove?
bar 46-48 continu down to bar 20 area
Downmove halted and transformed into upmove
bar 49-50 fast umpove to area bar 45 high
Upmove halted and transformed into downmove
bar 53 close penetrates high of bar 45 and bar [51,52] but close lower than open
bar 54 breakedown of overlap 52 and 53 and move down
bar 55-57 downmove
bar 58 of the lows above bar 20
bar 5 lower high and lower low
bar 6 till 10 within overlap of bar 5
Slow Downmove
bar 13 penetration of low of bar 5
bar 14 lower high
bar 15 till 18 slow downmove
bar 18 but close higher than open
Slow Downmove halted and transformed into upmove
bar 19 and 20 price moves above overlap of 18 and 19
bar 21 relative long up bar
bar 22 lower high
bar 23 till 30 bar moves up to test high of bar 5
bar 31 higher low
bar 32 till 40 unhindered upmove
Upmove halted and transformed into downmove
bar 41 close lower than open
bar 42-44 breakedown of overlap of bar [40, 41] and downmove
bar 45 breaking top of bar 44, moderate pauze of downmove?
bar 46-48 continu down to bar 20 area
Downmove halted and transformed into upmove
bar 49-50 fast umpove to area bar 45 high
Upmove halted and transformed into downmove
bar 53 close penetrates high of bar 45 and bar [51,52] but close lower than open
bar 54 breakedown of overlap 52 and 53 and move down
bar 55-57 downmove
bar 58 of the lows above bar 20