When price is in a range why do some people buy at the top? lol

[propwarrior]

So how are you going to know it's in a range? Do you have all the prices for the past few months memorized?

Let me give you an example. I like to buy coffee capsules for my coffee machine. I can buy them from quite a few different vendors. The price is typically 25c to 30c per capsule, I have seen them as high as 40c but not higher. Sometimes a vendor runs a promotion and they go as low as 15c but most of the time they are around 25c to 30c. I don't keep a chart of the prices I just know from memory that this is the typical price range.

Now. Suppose I want to buy some capsules, is it better for me to wait until I see them at 15c or snap them up at 40c. the mind boggles.

 

[viruscore1]

Please educate me as to why institutional traders 'buy anywhere' and are price insensitive. Here is a clue, you can't because they don't just buy anywhere only a small subset of them do.

Look it up. Hint, mutual funds and etf can only hold a certain amount of cash. You must be a prop trader lol.

 

[propwarrior]

My argument is it lets me take plenty of opportunities at low risk. What I mean is I only make trades off daily charts, finding that the constructs on these such as range boundaries, channel boundaries, support and resistance, trump those on 4H, 1H or lower.

Of course lower and lower and lower time-frames might make my entry look premature (or late, depending on which way you look at it) but to coin a phrase, where do you draw the line?

yeah this thread was more about trading in ranges and less about how you actually trade but thanks.

 

[learner2007]

Let me give you an example. I like to buy coffee capsules for my coffee machine. I can buy them from quite a few different vendors. The price is typically 25c to 30c per capsule, I have seen them as high as 40c but not higher. Sometimes a vendor runs a promotion and they go as low as 15c but most of the time they are around 25c to 30c. I don't keep a chart of the prices I just know from memory that this is the typical price range.

Now. Suppose I want to buy some capsules, is it better for me to wait until I see them at 15c or snap them up at 40c. the mind boggles.

Yeah, I think I can handle that when it comes to shopping. But when it comes to knowing the prices of hundreds of stocks and futures for the past few weeks or months, that's going to be rough even for all the great minds here on ET. Charts solve that.

 

[propwarrior]

Look it up. Hint, mutual funds and etf can only hold a certain amount of cash. You must be a prop trader lol.

That's cool different opinions are fine that is the essence of a market. I maintain that the majority of institutional traders are price sensitive, the non price sensitive traders who are typically hedgers and utility traders are a small subset of these. Typically the client will want to hedge and will pass the instruction to the broker. The broker will then work the trade as best they can, they look for value, that's their job. GL

 

[propwarrior]

Yeah, I think I can handle that when it comes to shopping. But when it comes to knowing the prices of hundreds of stocks and futures for the past few weeks or months, that's going to be rough even for all the great minds here on ET. Charts solve that.

yes it would be. I am able to establish price ranges from charts and without charts.

 

[learner2007]

yes it would be. I am able to establish price ranges from charts and without charts.

Ok, it's now clear that you are not using the term 'range' as most of us do. You are just talking about the high and low for a given period, aren't you?

 

[propwarrior]

Ok, it's now clear that you are not using the term 'range' as most of us do. You are just talking about the high and low for a given period, aren't you?

False.

 

[learner2007]

False.

Then what's true?

 

[Scataphagos]

If price has been in a range for sometime why do some people insist on buying when the price is well above the average price of that range? It's just a really dumb thing to do. When these people go shopping do they actively seek out overpriced items to buy and ignore the cheaply priced items.

I'd guess most often that they are anticipating a breakout to the upside and want to get on it "early".... not the percentage play.