Wyckoff's Monster

Here is the hourly about 30 minutes before the open. We are at the top of the trend channel. I've included the over-bought line from our last poke through but it doesn' change the plan - long if we go up, short if we go down.

I suspect that we are a little weak beneath. There wasn't much time spent at any one level on the way up so the path of least resistance is likely down. As we stand now a reversion to the mean would bring us to 3600 depending on the speed.

I included a 50% extension of the small up channel but this is just to see how much further price extended from the smaller (and possibly no longer meaningful) mean. I think of it as an extra standard deviation away.
 
Interesting day today. It's days like this where I get why DBP ends at 11. There were still a couple of decent opportunities if one could stay focused long enough.

We start off in a range and break above it during the opening. price pulls back below the mean which should give us pause if we were thinking long. We make another high before falling back into the range. We test the other side of the range as expected and come back into the range and this time the mean is rejected. I take an aggressive short here on the DL break and the rejection of 58. Buyers step up around 46 and price goes back in the range.

Sitting on my hands until 1 pm I notice we form another hinge. Price falls out of it around noon (no pullback to short) and returns to the range. We then get 3 rejections of the mid-line of the hinge. We break below the range and get a pullback and triggers the next short. This one makes a new low before returning to test the 50% area of the move out of the range. We now have a lower high and a lower low.

I try to get short off the small retracement after the DL break (14:16) but exit 1 minute later. We immediately get a strong rejection of the 50% level and I get short again. This time, however, there is no new low. There is a rejetion of 3645 and no further progress down is made (labeled DTDB).

This sets up a long which gets us back into the range. I decide since we are back in the range to keep the DL tight and get an exit after finding resistance at the top of the range.

Done for the day - definitely an exercise in patience.
 
A more zoomed in view. We can see that price spent a lot of the overnight session revolving around the mid line of yesterday's hinge and now we are forming a range there as well.

I'll definitely be standing aside until we are above 62 or below 50.
 
I took 3 trades today. One was a 6 tick loss (1). One was a 10 tick win (2). One was a 13 point winner.

The first two I shouldn't have taken at all as I was still inside that pesky range. The first one was bad location, bad price action - pretty much bad. The second one has better reasoning behind but SLA indicated I was in chop and should stand aside. I have no problems with the third entry. In my mind this reinforces a couple of things. Keeping loses small makes everything possible. Even if you get in for the wrong reasons (or no reason) you can still manage the trade and sometimes get a little something out of it.

I drew the channel because it frames things nicely and shows good interplay around the mean but it isn't necessary at all.
 
Here is a look at the hourly. I'm not sure if the upslopping channel is still in play. I think this is one of those times when the upper channel line should be moved but I'm not sure. I've include a second hourly with this change. Maybe DBP will weigh in.
 
green.green said:
Here is a look at the hourly. I'm not sure if the upslopping channel is still in play. I think this is one of those times when the upper channel line should be moved but I'm not sure. I've include a second hourly with this change. Maybe DBP will weigh in.
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When you have so many channels criss-crossing each other they become meaningless. At the very least, they provide little to no guidance as to what you should do, at least in real time.

All that matters in terms of AMT is the daily TL which is drawn across 3670. SLA kicks in after that. I'll probably post something about this in the backtesting thread later because there was quite a bit going on today that seemed like a great idea in hindsight that may or may not have been such a good idea in real time due to the lack of testing. I'm concerned that people might make changes in their strategies and tactics after today that will turn around and bite them in the ass the next time something similar comes up.
 
dbphoenix said:
When you have so many channels criss-crossing each other they become meaningless. At the very least, they provide little to no guidance as to what you should do, at least in real time.

All that matters in terms of AMT is the daily TL which is drawn across 3670. SLA kicks in after that. I'll probably post something about this in the backtesting thread later because there was quite a bit going on today that seemed like a great idea in hindsight that may or may not have been such a good idea in real time due to the lack of testing. I'm concerned that people might make changes in their strategies and tactics after today that will turn around and bite them in the ass the next time something similar comes up.
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Dont worry about me, I am not into trading in the Chop, although I usually seem like trying :), and hard.

For the other members, today was a great day to think about how to spot congestion, as bulls failed to take prices higher and bears failed to push prices lower, the opportunities for profit start to diminish.

Of course, one is always tempted to take the trade around the top and hope for a BO in the other side of the range, but then is the whole concept that starts to crumble, as one begins to look for smaller and smaller ranges and get more reasons to trade even in the worst of the conditions with the respective impact in P&L. Whenever you get the urge of risking your money in the chop, remember you are gonna need it for weeks like the previous one.
 
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