Day Trading & Forex Forum

FX_Cowboy

I really don't have any deep insight to offer here. At the time the chart was made, price had failed to break out through resistance that had held for quite some time, and had retraced to a support area. In other words, for the last day or so, price had been falling (look at the first bar from 7/31 and compare to the last bar printed on the chart).

Given that scenario, I would not be considering a long for the sole reason that I see no indication that price will head back up again. Sure, price was at a level that had provided support in the past -- and also had been broken in the past. But price breaks through support and resistance levels all the time. All I was saying was that there was no indication (that I could find) for a long, so I would not have initiated a long at that point. I should add that I certainly did not know at that point that price would continue to fall either (perhaps a more experienced trader could have seen that coming). So, with no reason to initiate either a long or short position, I would have waited for some reason to enter a trade.

firewalker99

Thanks for answering that question, so I can state that "absence of evidence" was evidence to NOT enter a trade. I understand what you're saying. Could you let me know your comments on my charts of today? It just looks quite similar situation there...

FX_Cowboy

It looks like a nice up trend. I hope you're long.

Seriously, I'm not sure what you want me to comment on. And I'm not sure I catch your meaning concerning the similarities. How do you see the situations being similar?

firewalker99

Well, perhaps I didn't put it as cleary but what I meant is I thought I saw a similar situation as yesterday on the monthly chart after that air pocket as dbphoenix mentioned a high probability short.

* air pocket appearing at 1100 -> air pocket on 07/28 just past the middle of the day
* following bars aren't able to reach much higher -> same here
* volume drops and price moves down slowly on 07/31 -> same here between 1100 and 1200
* it has been an uptrend from 07/24 till 07/31 -> uptrend from start of day

If I'm seeing things that just aren't there, please point out so.
I took a long entry at 09:30 actually... (but got out of the trade by that down spike around 10:15)

dbphoenix

Sorry, but you're showing me three charts which appear to be unrelated and which have no annotations that relate to what you're asking, so I don't know what you're looking at or what the focus of your question is.

As to the "air pocket", I erred in assuming that that, plus the S/R line you'd drawn, was the reason why you took the short. Since that had nothing to do with it, please explain why you did take that short.

Incidentally, your second chart has no date, so I don't know the context.

Db

__________________
Db

firewalker99

Sorry, I'll fill in the blanks and edit the original post.
I left out any annotations because I'd wanted to leave them blank as you could make your comments on them without my S/R, trendlines, etc interfering...

Mainly I shorted because that support was broken with a large down bar on higher volume, it went under by more than 5 points and then I shorted when it retraced a little back to 5720 (around 9:25)

That one is of today

firewalker99

Russell 2000 chart

with and without annotations

Attached Thumbnails

   

firewalker99

I've attached my comments on a chart of dbphoenix (see his appendix) with my lines indicated in bold red. db, I left your lines on it, but the purple line is only made up of two points?
The smaller led lines are just crossed up/down multiple times, also volume remains quite constant on most of the bars...

I also added a small red line, where I find more action because it goes through it and then reserves just to touch it slight and move away from it again.

The cyan line is one I'd also be drawing, but as for the rest...?

Attached Thumbnails