Stunning Charts Thread

[Splitlink]

Crikey, I don't have to work you out or ask myself anything! None of us knows the other, here, or their track records. All this philosophical stuff is patronising, to say the least ,and very personal. The thread is about one chart pattern and we are on post 22 and page 3.

 

[Mr. Charts]

"Richard...........Setting traps though? Why?" posted by RUDEBOY

I posted because only Socrates was trying to keep the thread on subject and I felt someone else needed to help the thread along in the promising direction set by timsk.

To pose a question is not to set a "trap".
I asked "long, short or pass".
Why is that a "trap"?
There is a pattern in that chart, that is self evident; so "pass" is unlikely to be an option anyway.......also I said "post an entry shot", so clearly I went long or short at the time of the screen shot.

Why is that a "trap"?

Anyone else brave enough stick their head above the parapet on this board to post an opinion on the chart?
There are three choices with every chart:
buy
short/sell
pass
Most of the time the best answer is pass anyway.
What I personally did at the time of that screen shot was based purely on evidence and a lot of experience of that particular set up over the years.
People contributing such charts are trying to provide good set-ups to everyone's mutual benefit.
That is what this thread is about.
Or that's what I thought, anyway.
I keep thinking from time to time that there is really no point posting on t2w what I believe are sometimes helpful or interesting charts. At least the abuse has stopped but it would be great to have a sensible debate with positive contributions (thanks contrakt and spitlink) without all the other irrelevant material.
I'm all for light diversions about the mental capacity of cows, but could we also please have some good set ups too?
Do all threads have to degenerate into oblivion?
If so I will simply post trades, set ups, other material on my own blog, which unlike t2w, doesn't have an auto-trash facility.
Richard

 

[SOCRATES]

"Richard...........Setting traps though? Why?" posted by RUDEBOY

I posted because only Socrates was trying to keep the thread on subject and I felt someone else needed to help the thread along in the promising direction set by timsk.

To pose a question is not to set a "trap".
I asked "long, short or pass".
Why is that a "trap"?
There is a pattern in that chart, that is self evident; so "pass" is unlikely to be an option anyway.......also I said "post an entry shot", so clearly I went long or short at the time of the screen shot.

Why is that a "trap"?

Anyone else brave enough stick their head above the parapet on this board to post an opinion on the chart?
Are are three choices with every chart:
buy
short/sell
pass
Most of the time the best answer is pass anyway.
What I personally did at the time of that screen shot was based purely on evidence and a lot of experience of that particular set up over the years.
People contributing such charts are trying to provide good set-ups to everyone's mutual benefit.
That is what this thread is about.
Or that's what I thought, anyway.
I keep thinking from time to time that there is really no point on t2w posting what I believe are sometimes helpful or interesting charts. At least the abuse has stopped but it would be great to have a sensible debate with positive contributions (thanks contrakt and spitlink) without all the other irrelevant material.
I'm all for light diversions about the mental capacity of cows, but could we also please have some good set ups too?
Do all threads have to degenerate into oblivion?
If so I will simply post trades, set ups, other material on my own blog, which unlike t2w, doesn't have an auto-trash facility.
Richard

It is already late to act on what is presented.

The correct price entry level is at 59 dead level or better.

But it looks as if it is going to go up, even if not very far, and I would have gone long at 590000 or better with a very tight stop, and watched it like a hawk..

 

[panda]

I agree with Mr Charts,

I don't have much to offer at the moment , but have a great deal to learn. It would be nice to be able to read a thread without all the phsychobabble (spelling ?) and seemingly pointless posts / remarks.

With all the sniping and put downs that get posted it's not surprising that only a few people make the effort to post constructively out of how many thousand members.... 45000 ?

 

[Mr. Charts]

You are, as usual, correct Socrates, in so far as 59 and change would have been the optimum entry for a certain type of set up.
This is a different and later set up ;-)
Richard

PS Please keep the cow analogies coming, they'll come home eventually for some........ ;-))

 

[Atlantic Trader]

Panda:
I agree iam here to learn not try to pick through the rantings ?

 

[panda]

Mr Charts, can you expand on why 59 would be the correct entry price ?

Thanks A

 

[pttrader]

Tell them the rest Rudeboy, looking is not enough, looking has to be accompanied by understanding.

After all a cow in a field can watch a train go by. It does not mean that the cow understands the significance of railways, passengers or timetables.

Soc,

What you need to understand IS: the market is after YOUR money.

 

[Mr. Charts]

If you don't mind, panda, I'll wait till others have had a chance to contribute their ideas, then I'll explain.

Interestingly and unexpectedly I've had four emails and a PM offering explanations and comments.
Every single one of those five messages have included the observation that the authors don't want to post openly because of all the aggro prevalent on these threads. What a shame.
I'm awaiting the first bout of abuse myself and I know who it will come from.
I'll reply to all the messages tomorrow or later in the week - busy schedule in the next few days.
Richard

 

[timsk]

The correct price entry level is at 59 dead level or better.

SOCRATES,
This is interesting, as this means you would be long before the small 2 bar pull back on low volume. Would I be right in thinking that the very high volume that accompanied the strong bull reversal candle is, by itself, enough for you to be reasonably certain that there is plenty of support for price at or just below the 59.00 level? Many people would argue that entry at 59.00 on a reversal candle is a high risk trade?

I agree with contrakt's assessment, although I'm inclined to enter sooner than the breach of the swing high as this level will be getting a tad too close to the decade number where some resistance is likely. Exactly where to enter though, is tricky, IMO. So Mr. C' - how did the trade pan out?
Tim.

 

[pttrader]

Tell them the rest Rudeboy, looking is not enough, looking has to be accompanied by understanding.

After all a cow in a field can watch a train go by. It does not mean that the cow understands the significance of railways, passengers or timetables.

Soc,

You must not have had the pleasure of growing up on a farm. Cows understand timetables. They know when it is time for the salt. Chickens understand time too. They know when to head for the trees. Cows probally look at trains as many cows hooked together by their tails, swallowing people and headed in one direction. Much like the markets. Traders get hooked together and run in one direction for a bit while money gets swallowed.

 

[superspurs]

short @59.70 stop @ 59.9,reason trend is down.

 

[pttrader]

It went down so short...short..short says the cow

 

[Tapewormtoo]

Richard is there any way you could repost this chart as a simple bar chart with the close? I would appreciate that.

Thanks

 

[Splitlink]

Perhaps volume holds a clue. Price needs to break into new ground but there is no volume on the last bar?

Split

 

[SOCRATES]

The correct price entry level is at 59 dead level or better.

SOCRATES,
This is interesting, as this means you would be long before the small 2 bar pull back on low volume. Would I be right in thinking that the very high volume that accompanied the strong bull reversal candle is, by itself, enough for you to be reasonably certain that there is plenty of support for price at or just below the 59.00 level? Many people would argue that entry at 59.00 on a reversal candle is a high risk trade?

I agree with contrakt's assessment, although I'm inclined to enter sooner than the breach of the swing high as this level will be getting a tad too close to the decade number where some resistance is likely. Exactly where to enter though, is tricky, IMO. So Mr. C' - how did the trade pan out?
Tim.

There are four things to consider:~ they are price, time, volume and intent. All of these have to be considered in unison, as one, and very fast, otherwise one would spend all day dithering between the merits of one argument against another and in the end, do nothing, because the window of opportunity would close itself, and fast.

So I am going to break it down and deal with it slowly so you can follow.

Price first......The price is dropped and dropped in a very controlled manner until it hits a level below which it is not allowed to fall. It happens to be 58500. Is this just chance? No it is not. It is the predetermined level to which the instrument is allowed to fall at which serious arrestment is enacted to make it stop falling. When a price falls like this and stops falling, and you are paying attention, the fact that it does not fall any further becomes obvious in a way whose obviousness has to be experienced and mastered in order to be understood. The fact of the matter is that it does not sag. Sagging is a clue of implied weakness. At the bottom of this fall there is no suggestion of sagging at all. The price then goes up, as the result of a very quick response. Look at the white candle. The advance ot the white candle is at a faster rate than the declines that preceded it. This tells us there is propensity for change of mood, for the price not now to be allowed to dribble down, but to move up smartly. Pople in the know are already taking positions. Therefore these early birds who spotted what I describe above quickly, INSTANTLY responded to what they saw that I explain and got tucked in EARLY and with a very TIGHT STOP that now, if they wish, they can move up sufficiently to COVER their dealing COSTS, in the event that the move does NOT continue as EXPECTED. In this particular trade the accent is on expectancy rather than on certainty or near certainty, that is why the use of a tight stop and its management in this particular scenario is specially relevant.

Let us now look at the time and how it pans out in this chart. See how the price curves downward with increasing steepness in the bear move that precedes the level of support. There is greater urgency in getting to the level of support in terms of price behaviour as the time rolls onward. There is an air of predetermined ambush in this. as soon as the price falls to the predescribed level it is made to stop falling and now recovers smartly.

Let us now look at the volume. We observe that as the price falls and falls, so the volume is made to gradually increase. Why is this ? This is because the fall is coming to the notice of more and more players, many of whom are shorting it. When the price reaches the targeted level just above 58 and below 59 the people who know, jump in and they close their positions. Theis causes a burst of volume. Additionally others who know other things, jump in and go long. This causes another burst of volume. Therefore at or near the bottom you will observe that the volume is increasing, denoting increased participation. As the price has fallen no further this is interpreted as accumulation. The price is moved up smartly in a white candle and the volume for this white candle is not low ? Why not ? The participation within this white candle is the cause. Even as the price is being marked up, there are people buying it, causing the increase in volume for the bar. Who are they and why ? In the confusion and indecision caused by this sudden stop to the fall and now this sudden rise there are three main component participants, these are bears closing their short positions late, late bears who are wrong and are having their stops taken out, and buyers intering the market. This is a matter of transparency to some and opacity to others. The opacity helps to create confusion as to what really is happening and what the final outcome is certain to be.

This brings us to the fourth component which is intent. This intent does not change. But what does change is market conditions as displayed by the chart. The difficulty is to suss the intent, the true intent cutting across all that is displayed. But the chart in tems of price behaviour, use of time and volumetric display, to a very large extent reveals clues that point to the intent. In this campaign, there are four phases, they are, marking down, arrestment, reaccumulation, and subsequent distribution. Now the matter for consideration is to what extent distribution will be maintained and for how long. That is why in a market situation like this one, quick response is crucial (what you call timing) a tight stop placed under the most favourable entry level (which you call stop management) and a locking in of sufficient cushion to defray costs (which you call trailing) and finally a hawk eye on the progress, because if for any reason the move falters or reverses, there are no resulting losses, and to ensure that the outcome in a worst case scenario would only constitute level books.

 

[Tapewormtoo]

Socrates,

Richard wanted us to say what would happen next and give an explanantion as to why. So I ask you ...what to you perceive happened next? Do it go up or down or track sideways?

 

[barjon]

Socrates,

Richard wanted us to say what would happen next and give an explanantion as to why. So I ask you ...what to you perceive happened next? Do it go up or down or track sideways?

i think you'll find socrates answered that earlier on

jon

 

[SOCRATES]

Socrates,

Richard wanted us to say what would happen next and give an explanantion as to why. So I ask you ...what to you perceive happened next? Do it go up or down or track sideways?

What happens is that unless as a result of very rapid, well targeted and "clean" accumulation two things happen which are a combination of sudden demand combined with a bit of stock shortage causing the price to rocket upwards in a V shape, the response to a sudden bottom takes some time to crystallise.

This is because the audience has just been delivered an information shock.

The audience is divided into the bullish, the bearish and the undecided.

The bullish are in the minority, because only a minority is ready, willing and able to committ in the way I describe in my post for all the reasons I explain.

The bearish are in the majority, since they are misdirected to assume the fall will continue.

The undecided have seen the price plummet and come to a halt and actually begin to climb.
They are the first group that has to be converted from an undecided posture to a bullish posture. This takes some time. They want to see the price rising before they are convinced. They are eventually convinced, but then the question arises as to whether their timing is out, meaning, not fast enough.

The bearish group are the next to be converted to a bullish posture from one which is diametrically opposite, so it is even more difficult for them.

Until all postures collectively harden on the side of bullishness, the move cannot seriously progress.

In consequence of this, it may take some time to establish direction according to the degree of contrary posture exisisting as an overhang of price action that preceded this, do you now understand ?

Therefore a direct relationship exists between collective bullishness and price progression in the new direction, or lack of collective bullishness and reluctance for price progression in the new direction.

The intent has to be underpinned by response, and that response or the lack of it is the consequence of what I have just explained to you. It is in large measure relevant to the condition of the market technically as an adjunt which has to be properly considered.

For this reason, you will see in my previous post how I mention a very tight stop as a prime requirement in this operation as a particularly important safeguard.

This is because if the element of bearish sentiment has become entrenched deeply as a a result of the very steep price decline that preceded the halt, prices may have to be taken even lower still later to be able to secure the corner absolutely, before the intent can be properly fulfilled.

 

[SOCRATES]

i think you'll find socrates answered that earlier on

jon

No Barjon, what he means is that I did not amplify it. For this reason, to be fair, I have expanded on my explanation in the post above, with a properly structured reasoning that he can follow without difficulty,