dbphoenix
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And back to my earlier question regarding why price chose that particular level to percolate and simmer. Perhaps knowing more about the S/R situation makes this easier to understand. The fact that Friday was not only a trend day but a range expansion had a lot to do with it, but that was only part of the story. Price could also have continued the downward move, but it didn't. Why? S? Maybe. In any case, the fact that price didn't fall became the dog that didn't bark, which made an upmove on either Tuesday or Wednesday more likely.
And that's the basic setup, which takes up back to your initial post and your questions.
While one must always be alert, there are times to be hyper-alert and there are times to sit on one's hands and watch. For my style of trading, the available evidence made Monday a time to sit and watch.
And that's the basic setup, which takes up back to your initial post and your questions.
While one must always be alert, there are times to be hyper-alert and there are times to sit on one's hands and watch. For my style of trading, the available evidence made Monday a time to sit and watch.
The seconed part of this set up is how the daily range contracts, with price struggling to make a new low, and the low of fri. still acting as resistance, containg the price in a narrow daily range.
At this point we can see / assume a build up of energy. So now we say to ourselves " if the daily range snaps back to normal, where will we see it about to happen first?
At this point we can see / assume a build up of energy. So now we say to ourselves " if the daily range snaps back to normal, where will we see it about to happen first?
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Back to the original charts, Monday and Tuesday's action, price continually tested the 43-44 area, as a top, and 27-30 or so area at the bottom, with Tues making higher lows as the day wears on.
So now we know that for a breakout "long" the price needs to be better than 1444, and for a breakout "short" ( we'll get in to the advisability of the short side latter) price needs to be less than 1427.
with those targets in mind, we now observe "price" to see which way it goes, if it goes.
Price did in fact break out, and did pull back, so our question is, "how do we enter"? and where to put our initial stop loss?
PS. My trading day is about done now, and I have errands to run. I'll check back this afternoon.
Your ideas of entry techniques, and stop loss placement, would be a great help to keep this dialog going. ( I'm talking to all you silent lurkers)
So now we know that for a breakout "long" the price needs to be better than 1444, and for a breakout "short" ( we'll get in to the advisability of the short side latter) price needs to be less than 1427.
with those targets in mind, we now observe "price" to see which way it goes, if it goes.
Price did in fact break out, and did pull back, so our question is, "how do we enter"? and where to put our initial stop loss?
PS. My trading day is about done now, and I have errands to run. I'll check back this afternoon.
Your ideas of entry techniques, and stop loss placement, would be a great help to keep this dialog going. ( I'm talking to all you silent lurkers)
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erierambler
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erierambler
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dbphoenix said:
Speaking for myself, one has worked too hard to just post it all on a message board. Privately may be a different manner. I'm sure you have ran across this many times Db.
erie
erierambler
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dbphoenix said:
On another thread I posted my market chart which was my entry at that time, not particularly hindsight , in fact it was the day before the entry. No one commented , but you knew. On the chart was annotated key reversal and test. S/R thread.
As far as here, Sulong asked for entry and he got one. Where are all the others'?
erie
dbphoenix
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erierambler said:
Sulong asked for more than entry. Reread the first post.
As for now, there are no others. Maybe there won't be any ever. In which case the thread will go the way of all previous threads like it. And beginners will whine that nobody ever contributes to threads like this one.
erierambler said:
Erie,
Thanks for contributing.
Actually, my intent was to focus on a "pull back" which followed a "break out".
And I thought this was a good example of a BO from a 2day range, in which to study.
I'm a little surprised at the lack of participation from those who could benefit from this exercises the most, But waddaya gonna do?
I for one enjoy doing this sort of thing, and would like nothing more than to do one every week,
There's many types of breakouts, types of double tops/bottoms, and so on.
Doing this sort of work in the privacy of my own work place, is what I normally do. But I find that working by myself, I often run out of ideas to put to the test, and in time get a little lazy.
Sulong and dbphoenix:.. "Waddaya gonna do?" OK.. I'll speak up. I really like reading this type of thread even tho I started investing part time 39 years ago.. I didn't factor in volume untill I started reading dbphoenix about 4 months ago. Wow. Not using the volume information is like flying with half of a wing. I am not very good at typing so I don't post much.. But since both of you are just now wondering why there are not many other posts, I felt I better speak up. THANKS dbphoenix and sulong.. and keep up the GREAT threads.. agpilot
timsk
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Erierambler's Entry?
db / Sulong,
You guys are performing so well that the rest of us are very happy to sit in the audience and admire, much as Agpilot infers! (Bye the bye, welcome to T2W Agpilot). However, as audience participation is requested - here goes.
db - although your criticism of Erierambler is valid, I don't agree with it completely. Like you, most people will ask "why enter there". In some cases, this will result in a more careful analysis of the chart than would have been undertaken had the entry point been accompanied with an explanation.
I looked at the chart and offer this assessment of Erierambler's entry point:
1. Friday's downtrend continued until mid morning on Monday when the trend line was breached at the 1433 mark - the point(ish) at which Erie' entered the next day.
2. Confirmation that the downtrend was over and that a reversal was underway was needed before a long position could be opened.
3. Some might argue that NQ went into a sideways continuation pattern and, around 9.00am on Tues, it looked as if the downtrend was set to continue.
4. However, this didn't happen and (presumably) no short entry was triggered, so it's a case of 'wait and see'. The 9.00 am low was followed by two higher lows which form the start of the ascending triangle and offer a technical signpost that a reversal may be underway.
5. Confirmation of this comes when the reversal breaches the end of the previous downtrend, i.e. around the 1433 mark on Tuesday afternoon. This is also the trigger to enter a long position. A possible stop could be the breach of Tuesday's 9.00 am low around the 1427 mark?
I'm probably way off beam, but he ho. :cheesy:
Tim.
db / Sulong,
You guys are performing so well that the rest of us are very happy to sit in the audience and admire, much as Agpilot infers! (Bye the bye, welcome to T2W Agpilot). However, as audience participation is requested - here goes.
db - although your criticism of Erierambler is valid, I don't agree with it completely. Like you, most people will ask "why enter there". In some cases, this will result in a more careful analysis of the chart than would have been undertaken had the entry point been accompanied with an explanation.
I looked at the chart and offer this assessment of Erierambler's entry point:
1. Friday's downtrend continued until mid morning on Monday when the trend line was breached at the 1433 mark - the point(ish) at which Erie' entered the next day.
2. Confirmation that the downtrend was over and that a reversal was underway was needed before a long position could be opened.
3. Some might argue that NQ went into a sideways continuation pattern and, around 9.00am on Tues, it looked as if the downtrend was set to continue.
4. However, this didn't happen and (presumably) no short entry was triggered, so it's a case of 'wait and see'. The 9.00 am low was followed by two higher lows which form the start of the ascending triangle and offer a technical signpost that a reversal may be underway.
5. Confirmation of this comes when the reversal breaches the end of the previous downtrend, i.e. around the 1433 mark on Tuesday afternoon. This is also the trigger to enter a long position. A possible stop could be the breach of Tuesday's 9.00 am low around the 1427 mark?
I'm probably way off beam, but he ho. :cheesy:
Tim.
OK, now for how to enter. The way I see it there are at least 2 ways.
1. After the breakout, from the 46 area,the price climbed about 5-5.5 points, (to 1451+/- ) and then found some R.
One could have simply put in a limit order at around the 47 area,( the top of previous congestion) and hope that what you're seeing is in fact a pullback, from a successful breakout. And a stop at 44.5, figuring that a pull back that far is actually not a pullback, but rather a return to congestion, for further churning.
2. The other way, is to wait till you're sure that you are in fact looking at a pullback, and enter at the highest high, of the last down bar, with a stop loss set at the bottom of the same bar.
The stop loss's would be about the same distance from entry, And in both cases, the stop loss being triggered would tell the same story, a return to congestion.
1. After the breakout, from the 46 area,the price climbed about 5-5.5 points, (to 1451+/- ) and then found some R.
One could have simply put in a limit order at around the 47 area,( the top of previous congestion) and hope that what you're seeing is in fact a pullback, from a successful breakout. And a stop at 44.5, figuring that a pull back that far is actually not a pullback, but rather a return to congestion, for further churning.
2. The other way, is to wait till you're sure that you are in fact looking at a pullback, and enter at the highest high, of the last down bar, with a stop loss set at the bottom of the same bar.
The stop loss's would be about the same distance from entry, And in both cases, the stop loss being triggered would tell the same story, a return to congestion.
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erierambler
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sulong said:
Sulong
Not trying to confuse you but your study of a breakout from a 2 day range is occurring while the $INDU, $NYA, and $SPX are experiencing reversals. For me reversals mean that one gets in as close to support as possible and gets out at resistance. (Which is why I study the $NYA and $INDU as proxy for my trades.) It increases the probability for success.
erie
dbphoenix
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erierambler said:
I wouldn't say he's confused. He's interested in the retracement setup. If you'd like to go into as much detail as he has only in regard to a reversal setup, I'm sure many people would get a great deal out of it.
As for entering at S and exiting at R, that's certainly an option, but it means cutting profits short. As for the use of NYA and INDU increasing the probability for success, perhaps you could provide data on that.
