S/R and the Mirror of Erised

This is a discussion on S/R and the Mirror of Erised within the Technical Analysis forums, part of the Methods category; Dbphoenix (and Szimba, and anybody else who's interested): I've tried my best at previous day's chart (FDAX). Trying to focus ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Aug 10, 2006, 2:27am   #64
 
firewalker99's Avatar
Joined Jul 2006
Identifying significant points on a chart

Dbphoenix (and Szimba, and anybody else who's interested):

I've tried my best at previous day's chart (FDAX). Trying to focus on what's happening instead of what I should or should not do. It takes a different approach, but I hope this can be a step in the right direction. Red lines indicate S/R lines of previous days, left 5675 out of it as I don't see price reacting around that level... There are probably more significant points, but I tried to limit the exercise to those I found most interesting.

1) Af a small zone of horizontal accumulation between 0815 and 0845, price turns higher but is not able to break through resistance. This further strengthens the 5695 level which we've seen on previous days.

2) Price is back where we started the day, at 5670, buyers are coming in and push price higher again up to 3.

3) Buyers are done, and from this point on sellers take over. They push price all way down to 4.

4) Little hammer which reaches above 5650, previous support.

5) Sellers appear done for now, after two wide spread down bars closing near the high which could indicate a reversal because this happens on support.

6) Back to the 5650 level where price fizzles around, closing above and below the line. Buyers and sellers are trying to figure it out.

7) At this point 5 appeared to be a selling climax. Buyers are able to push price much higher in a short time frame.

8) From 7 to 8 a little retracement, before the upmove continues.

9) Similar bar to 7, buyers are still very strong and price closes on the high.

10) Back to what appeared to be a reversal point earlier and again price turns away instantly but fails to go very far away this time...

11) Would you call this an airpocket?

12) Noise from opening of American stock exchanges and a swing low but still above the support at 5695.

13) The first time prices fails to make a higher high after the uptrend, and incidently this happens on a hammer.

14) None of the upbars are able to put on a spurt to push price much higher.

15) Buyers are still in the game, but none of the upbars close on the high. Traders aren't interested in buying at this level.

16) Last of the buyers attempt to keep price above support, but fail to do so as shown by the very small spread upbars.

17) Price spikes up from the 5695 level after which buyers and sellers are in search for an agreement...

18) From this point on price finds no support and keeps declining.
Attached Thumbnails
20060809-b.gif  
firewalker99 is offline   Reply With Quote
Old Aug 10, 2006, 2:37pm   #65
 
dbphoenix's Avatar
Joined Aug 2003
dbphoenix started this thread
Quote:
Originally Posted by firewalker99
Dbphoenix (and Szimba, and anybody else who's interested):

I've tried my best at previous day's chart (FDAX). Trying to focus on what's happening instead of what I should or should not do. It takes a different approach, but I hope this can be a step in the right direction.
Much improved, but I'll leave it to others to make specific comments.

Db
dbphoenix is offline   Reply With Quote
Old Aug 10, 2006, 9:20pm   #66
 
Szimba's Avatar
Joined Aug 2004
Nice job Firewalker!

Who am I to give you advises? I'm just a same novice as you, but since you mentioned my name here are my thoughts:

I just added a couple of S/R line which I would have drawn, probably you already seen them.

You can get more evidence (or not) of selling exhaustion at 5, if you can see volume.
Later you call 5 as selling climax. Although this is the bottom for the day, in my terms this is not a climax. I require the last bar to be the longest during a downtrend to call it climax. But it is not as important how you call it, until you translate trader behaviour well.
What is important, to have constant definitions for your own use. (Also for accumulation. I wouldn't call it as accumulation, but maybe your definitions are the same as mine.)
Volume also could be a help after 14.

What I like most in your work, that you started to think about what buyers and sellers are doing and what is the result of their transactions.

Regards
Szimba
Attached Thumbnails
firewalker.jpg  
Szimba is offline   Reply With Quote
Old Aug 11, 2006, 7:42pm   #67
 
firewalker99's Avatar
Joined Jul 2006
Quote:
Originally Posted by Szimba
You can get more evidence (or not) of selling exhaustion at 5, if you can see volume.
You say you're a novice, but you sure have a bitter handle of this price action stuff than me. So perhaps you're not so novice after all Anyway, I added a chart with volume, as you can see there was quite some around what I called a potential SC. At point 14 again there was high volume.
What bothers me though is the extremely high volume around 1500, shouldn't one assume this is a serious sign of weakness because a lot of people where selling within that bar? In what way do you include volume in your analysis?

For the moment, I'm still leaving volume out of my charts because I don't feel I have a complete understanding of price movements.
Attached Thumbnails
20060809.jpg  
firewalker99 is offline   Reply With Quote
Old Aug 11, 2006, 7:48pm   #68
 
firewalker99's Avatar
Joined Jul 2006
Quote:
Originally Posted by dbphoenix
Much improved, but I'll leave it to others to make specific comments.

Db
I've noticed in earlier posts and charts you're using a lot more references to volume than in more recent comments. Why the change or is there a specific reason for? Take for example #56 from your PV thread, I know it goes way back about 2 years but I was interested in knowing your motives for changing -or refining- your approach.
firewalker99 is offline   Reply With Quote
Old Aug 11, 2006, 8:06pm   #69
 
dbphoenix's Avatar
Joined Aug 2003
dbphoenix started this thread
Quote:
Originally Posted by firewalker99
I've noticed in earlier posts and charts you're using a lot more references to volume than in more recent comments. Why the change or is there a specific reason for? Take for example #56 from your PV thread, I know it goes way back about 2 years but I was interested in knowing your motives for changing -or refining- your approach.
You'll notice in post #5 of the PV thread that I point out that volume is just trading activity. I've always looked at volume that way. However, beginners -- and many not-so-beginners -- insist on looking at volume as some sort of indicator and focusing on the individual bar as being weighted with meaning. How much of this has to do with candlestick theory and VSA, I have no idea. But I eventually had to stop including volume on my charts entirely because they couldn't see price action through their volume-filtered glasses, so much so that they found trading without volume virtually impossible. Many if not most beginners -- and not-so-beginners -- also have an unhealthy dependence on the "bar", and the length of the bar, and the shape of the bar, and counting bars, which is one reason why people who don't have so much to unlearn seem to have an easier time of it.

Db
dbphoenix is offline   Reply With Quote
Old Aug 11, 2006, 8:10pm   #70
 
dbphoenix's Avatar
Joined Aug 2003
dbphoenix started this thread
Quote:
Originally Posted by firewalker99
What bothers me though is the extremely high volume around 1500, shouldn't one assume this is a serious sign of weakness because a lot of people where selling within that bar?
I know you're asking Szimba, but there's no reason why one should consider this a "serious sign of weakness". A lot of people are selling, but a lot of people are also buying, which is why the "volume bar", i.e., the trading activity, is so high. All that matters is who is exerting the greater pressure. And you know that by what's happening to price. Price is rising. Therefore . . .
dbphoenix is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
The Market Is a Mirror CJIA Psychology, Risk & Money Management 7 Jun 16, 2007 2:24pm
Stocks That Mirror The Index? peedee Stocks 11 Jan 8, 2004 10:17pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)