Unholy Grail to Success
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maybe he should start a private chat room like anek :eek:
What copyright?!
Other than a couple candlestick diagrams that I ripped off from Stockcharts.com, which I later doctored to suit my own needs, everything is the product of my own colorful imagination. Well, if you can even call it an imagination.
I have not abandoned this thread. I'm merely taking a breather. For the time being, let me know if there's anything in particular you want to deal with.
There are way too many misconceptions about trendlines on this board. Unfortunately, some questions would have been better left unanswered because many have done more harm than good in my opinion. At any one moment in time, you're dealing with 3 trendlines at most. The first line is derived from the long-term trend. Even as a daytrader, you must know what the prevailing trend is for the previous month or two. This trendline usually sticks out on the chart. The second and the third lines come from the intraday chart. Of the two, one is for an uptrend and the other downtrend. That's it!
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Trade School: Market Symmetry
A while ago, I made a bold claim that maket has its innate rhythm. By using price swings, we can readily detect the flow of thsee underlying motions. By taking that concept one step further, I would like to introduce the idea of market symmetry.
There's a pattern of symmetry that exists in the market. According to George Angell, "[this] pattern, when time and price are identical (emphasis added), consists of two legs in perfect symmetry completing one trend. The idea is to use the appearance of the first leg to forecast the magnitude and duration of the second leg. Ideally, there are two trends in a day, one in the morning and one in the afternoon." (Sniper Trading: Essential Short-Term Money-Making Secrets for Trading Stocks, Options and Futures, New Jersey: Wiley, 2002) Furthermore, by adding momentum into this potent mix, we can better forecast the trend and its reversal in the future.
A while ago, I made a bold claim that maket has its innate rhythm. By using price swings, we can readily detect the flow of thsee underlying motions. By taking that concept one step further, I would like to introduce the idea of market symmetry.
There's a pattern of symmetry that exists in the market. According to George Angell, "[this] pattern, when time and price are identical (emphasis added), consists of two legs in perfect symmetry completing one trend. The idea is to use the appearance of the first leg to forecast the magnitude and duration of the second leg. Ideally, there are two trends in a day, one in the morning and one in the afternoon." (Sniper Trading: Essential Short-Term Money-Making Secrets for Trading Stocks, Options and Futures, New Jersey: Wiley, 2002) Furthermore, by adding momentum into this potent mix, we can better forecast the trend and its reversal in the future.
Under a perfect scenario, S1 should equal S2, in both price and time (Figure 1). However, unless you're able to catch S2 at the beginning, you're very likely to miss a big portion of the move. So how would you determine where the reversal point is in advance?
Suppose ES rallied 20 points in the morning and you're certain that there will be another 20-point rally in the afternoon. Having done your homework the night before, you came up with 900 as HOD and 850 as LOD. Based on those two numbers, provided that they're accurate, you come up with 880 (900 - 20) as the pivot point. (Figure 2) However, you must also be mindful of both time and momentum. For example, if the morning rally took 1 hour and there's roughly over 2 hours still left in the day, what are you suppose to do with the extra hour? Just sit there? What about the strength of the counter-trend? Is it a relatively a weak one to warrant a continuation rally in the afternooon?
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Important note: Allow me to be blunt. I don't like to bitch anymore than I have to but there's a good reason why this thread was written in a chronological order. If you're new to this thread, start from page 1 and don't skimp on details!
Suppose ES rallied 20 points in the morning and you're certain that there will be another 20-point rally in the afternoon. Having done your homework the night before, you came up with 900 as HOD and 850 as LOD. Based on those two numbers, provided that they're accurate, you come up with 880 (900 - 20) as the pivot point. (Figure 2) However, you must also be mindful of both time and momentum. For example, if the morning rally took 1 hour and there's roughly over 2 hours still left in the day, what are you suppose to do with the extra hour? Just sit there? What about the strength of the counter-trend? Is it a relatively a weak one to warrant a continuation rally in the afternooon?
[edit]
Important note: Allow me to be blunt. I don't like to bitch anymore than I have to but there's a good reason why this thread was written in a chronological order. If you're new to this thread, start from page 1 and don't skimp on details!
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Are you asking how much the retracement amount is or what you're supposed to do during the two hours while you wait for the move?
Estimating the retracement amount depends on what type of strategy you employ. It can be a general 50% retracement or a calculation based on pivot points, Gann, Elliot, Fibbonacci, or standard deviation. They all have their merits but you have to choose one method and be consistent.
As for the waiting issue, well that's the drawback of only trading one security (ES). You have to wait for the good trade. Fortunately, I trade stocks so I have a lot of potential plays to choose from!
Estimating the retracement amount depends on what type of strategy you employ. It can be a general 50% retracement or a calculation based on pivot points, Gann, Elliot, Fibbonacci, or standard deviation. They all have their merits but you have to choose one method and be consistent.
As for the waiting issue, well that's the drawback of only trading one security (ES). You have to wait for the good trade. Fortunately, I trade stocks so I have a lot of potential plays to choose from!
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