Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

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Old Jan 6, 2007, 7:01pm   #22
 
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Now an even lower high (covering the long), followed by a higher low (trying to cut to the chase here). The lower high and the higher low define "trendlessness", i.e., a search for equilibrium. For most traders, this is not the best environment for profitable trades.
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Old Jan 6, 2007, 7:13pm   #23
 
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And now a "higher high". What do you do with that? It's "higher", but it's also lower than the high set on the 8th. Which is where so many traders wander off into the weeds.

The major high and low were determined almost four weeks back. Anything inbetween is minor. One can trade these minor fluctuations if one wants to, and many do, but if he does so, he is also much more subject to whipsaws. Is this overtrading? Depends on the strategy. If one is going for only a few ticks in any direction, then whether this style of trading is worthwhile or not is entirely up to the trader. But knowing which direction to shoot for, much less whether or not to get into SAR, remains a key question.
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Old Jan 6, 2007, 7:25pm   #24
 
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Now price drops below "S". And the couldawouldashoulda begins.

Should I have shorted that last swing high? If I had, where would I have entered? If I had been long off the last swing low, where would I have covered? Would I? Why?

If I hadn't shorted that last swing high, should I short now? Or wait? Should I go long? What the hell is the direction of price anyway?

And if you're waiting for the other shoe to drop, the shoe is in your hand. All this may seem like a tease because I can't tell you what's best for you.

You have to define your trading environment.

You have to determine how much risk you can stand.

You have to decide how much profit to go for.

You have to decide exactly what price has to do in order to tell you whether you're right or wrong.

You have to decide under what conditions the yellow lights will flash.

None of this is especially difficult, but it is time-consuming. On the other hand, you've been a member for at least four years and have most likely viewed a great many charts. If you determine in advance what it is that you're going to look for, the mess will resolve itself into trend, momentum, "divergence", and so on and you'll begin to be able to screen out the noise that distracts you from your goal.
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Old Jan 6, 2007, 8:31pm   #25
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Question Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread
Quote:
Originally Posted by dbphoenix
And now a "higher high". What do you do with that? It's "higher", but it's also lower than the high set on the 8th. Which is where so many traders wander off into the weeds.

The major high and low were determined almost four weeks back. Anything inbetween is minor. One can trade these minor fluctuations if one wants to, and many do, but if he does so, he is also much more subject to whipsaws. Is this overtrading? Depends on the strategy. If one is going for only a few ticks in any direction, then whether this style of trading is worthwhile or not is entirely up to the trader. But knowing which direction to shoot for, much less whether or not to get into SAR, remains a key question.
Thanks a lot DBP,
The commentary you've provided on these charts should prove a big help, in providing a better framework for how to think in terms of future chart interpretation.

I'm going to absorb this info before posting anything else, thoughts, questions etc..

Just one quick question first -

By SAR do you mean support and resistance S&R, or are you referring to something that I am unfamiliar with?

Many thanks
JT.
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Old Jan 6, 2007, 8:34pm   #26
 
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Quote:
Originally Posted by jtrader
Thanks a lot DBP,
The commentary you've provided on these charts should prove a big help, in providing a better framework for how to think in terms of future chart interpretation.

I'm going to absorb this info before posting anything else.

Just one quick question first -


By SAR do you mean support and resistance S&R, or are you referring to something that I am unfamiliar with?

Many thanks
JT.
Stop And Reverse. In other words, get out of whatever position you're in and take the opposite. (It's also the name of an indicator, but it's easier to type "SAR" than the whole thing.)

In the meantime, if you're interested mostly in intraday, repost your original chart, only start at 13:31 to get rid of those first two long red bars. And no lines or annotation.

Db
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Old Jan 6, 2007, 8:45pm   #27
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Smile Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread SAR = Stop and reverse - the post makes full sense to me now.

Thanks again.

Last edited by JTrader; Dec 20, 2007 at 1:08pm.
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Old Jan 7, 2007, 10:52am   #28
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Arrow Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread
Quote:
Originally Posted by dbphoenix
Now price drops below "S". And the couldawouldashoulda begins.

Should I have shorted that last swing high? If I had, where would I have entered? If I had been long off the last swing low, where would I have covered? Would I? Why?

If I hadn't shorted that last swing high, should I short now? Or wait? Should I go long? What the hell is the direction of price anyway?

And if you're waiting for the other shoe to drop, the shoe is in your hand. All this may seem like a tease because I can't tell you what's best for you.

You have to define your trading environment.

You have to determine how much risk you can stand.

You have to decide how much profit to go for.

You have to decide exactly what price has to do in order to tell you whether you're right or wrong.

You have to decide under what conditions the yellow lights will flash.

None of this is especially difficult, but it is time-consuming. On the other hand, you've been a member for at least four years and have most likely viewed a great many charts. If you determine in advance what it is that you're going to look for, the mess will resolve itself into trend, momentum, "divergence", and so on and you'll begin to be able to screen out the noise that distracts you from your goal.
Hi DBP

the highlighted parts above express some of my thoughts/doubts.

I can now see on the historical charts posted, the potential significance of the lower-highs (LH) and lower-lows (LL).

However, I now need to go on to try and establish ways of deciding whether or not LH's or LL's have formed in real-time in order to be able to decide if and when a trade is appropriate - particarly if trying to trade the minor reversal swings (LL's and LH's) between the more major S & R.
As things stand right now, I would be more comfortable trading for reversals around the very obvious (major) S & R levels, but the swings inbetween major S & R, seem to be more difficult to trade as I have less idea why price is/might be stopping and reversing where it is, as this is inbetween (major) S & R. Hence, I would have more doubts before taking on such a trade, and less good reasons to take on such a trade.

LL's and LH's now seem more obvious on the historical chart, and easy to recognise in hindight, but in real-time it will naturally be more difficult. Recognising when price is running out of steam and forming an LL or LH.
In the run-up to a LH, on a candlestick chart, there are likely to be a few red candles among a majority of green candles. Maybe two red candles form next to each other that makes me think that price has topped and an LH has formed, therefore I may look to short. However, price then continues up and the next few candles are green, until the actual formation of the LH. In the mean-time, I may have had to activate my stop, as it would/I could not tolerate the continuation upwards, against my trade.

Therefore, particularly if I am to make use of LL's and LH's to trade possible reversals inbetween of major S and R, in real-time I need to start to define my criteria for when LL's and LH's have actually been formed, so that I can determine good trade entry points. Getting a better feel for for when price has run out of steam, as opposed to stopping briefly for a breather etc.

Thanks again.
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