Price Patterns.

[neil]

New thread - good idea

...not total pants tim...maybe thongesque....remember tim if convention was correct every weak hand would be a strong hand and as this is zero sum it just isnt possible,seems rather hard to keep these interesting threads on track at the moment....so im thinking of some sunday group skype sessions as alternatives.

think of the move in terms of fuel/energy tim....draw one out....at the intital mark up/down stage...the break.....how can energy be optimised....take a inverse head and shoulders as the basis of say the accumulation pattern and consider what is occurring in every leg....this will serve to understand the initial break phase and first leg out of the accumulation period....and please consider the h and s for yourself....do not again take the conventional wisdom ....of a head and shoulders....its scary wrong....zero logic....cheers mark j

ps....if there's enough interest maybe its time for a another thread....and to laptop/cj it hasn't been done all before....a very stupid attitude and an excuse for not thinking and being lazy....if everyone had that approach there would never be progress in medicine .technology or any of the sciences...if people wanted another thread what would they want...thats not to say they'll get it ..how about why all price and volume vendors are wrong :cheesy:...or seriously maybe the anatomy of a head and shoulders...well a left hand shoulder would done correctly would be enough.

You would need to be ruthless i keeping the thread on track but an excellent idea nonetheless

 

[Paul71]

...can you have strong trends based on faking,shaking with intent,counter intent,counter counter intent?

Hello MM.

Does the above apply to all time frames?

Would a long term investor fake and shake?

Do the games only exist on smaller TFs?

The 'formulae' would have to have a computer executing trades at the smaller end of the scale.

 

[Paul71]

...is trend the same as professional intent?

Depends.

 

[Paul71]

.....longer term investors....is the shaking and faking which apparently suits there's needs...is it instigated by them...or is it a consequence ...if you like a symbiotic relationship between all the smart traders....flow readers ....taking advantage of the flow within there own time lines?

....and therefore at any given time is there a dominant group of traders..scalpers...long term etc?

Why would dominance ebb and flow?

What dictates dominance?

Can too much money tied up in any given market be a weakness?

Dominance lives through weakness, can weakness be created by the dominant?

 

[Paul71]

....is trend just a nice word used in text books to give people a simple concept to latch onto...yet really it means nothing ?


...or is it about who is in control,what they need to conclude business supply or demand...and what is there current move motive with weak hands?

Creating illusions?

Do professionals buy/sell into what they have created?

 

[Paul71]

....are they sometimes forced to protect due to unexpected flow?

......do they sometimes get it very wrong?

cheers mark j

Do the markets offer a fair price?

 

[chump]

"Why would dominance ebb and flow?" ...because when an investor buys he buys at a price range that he is happy with at that time..following which he just sits and watches his investment , perhaps adds to it if his perception of it at a later stage merits that. BUT there will be times when he is doing nothing and the market is simply moving around him with players active on shorter timescales so in that sense his earlier dominance in making the market move has been temporarily shifted. Likewise when he decides to pull the plug he regains dominance until he is done because the ability of a market to move without his weight is limited at least to the degree that he influenced the prior move.
That's why you get parabolic moves that leave a vacuum behind into which they implode. Basically the investor of a longer timeframe is not propping them up and won't until they return to a price range he's happy to deal at.

"Do the markets offer a fair price?"..I don't believe in that concept.

 

[Paul71]

The discussion has been detoured into supply and demand from buying pressure and selling pressure. If this is intentional, then a discussion of supply and demand may be of interest to many. If it's not, then I suggest that focusing on buying/selling pressure will yield more satisfactory results.

All of this has, by the way, been addressed in the Price/Volume thread. so anyone who's interested has at least that resource available.

Hello DB.

We have buying and we have selling this gives us a price.

What is the formulae/equation that binds this proccess to make it real, to give it structure, to take it away from the supernatural and myth.

This is the very source of what the world financial markets are based on.

If you have explained this, or showed this equation somewhere else on these boards i appologise. Could you please show it one more time, i beg you.

Thankyou in advance.

 

[trendie]

lots of questions, followed by more questions.

is this someting that can be understood in broad terms, then adding increasing complexity, or do you have to know it all at once?

eg; linesniffers "what is trend?" question.

(it is apparent to me, after trying to read the DJI without indicators, except for Volume, that I am not smart money, I am not dumb money, I am actually dumber money.)

re: trend.
surely this is a continuous, generally consecutive, printing of higher-highs and higher-lows, and vice-versa. (Lr-L, Lr-H)
The question of when it starts and when it ends, is determined by a failure to maintain the move. this may be a failure to break new highs or lows.

This is, I am willing to acknowledge, text-book stuff, that the pros want us to fall for.
But, if patterns have a better than 50/50 chance of success, then does it even matter?

I am still having difficulty in understanding the concept of "intent". I infer from the word it is when pros manoeuve others into taking positions, which will ultimately be the pros target to clean up.
eg; create a situation where people take positions, and then wait for the density of stops or limit-orders to build up for the pros to trigger those stops/orders in one big bite, ie, make it worth their while.
but then, arent ALL the pros doing this, and thus fighting amongst themselves as well as the retail crowd?

EDIT: I may be completely off-topic, in which case, I shall resume just reading this thread.

 

[chump]

A chart might help to answer soem of the questions raised.
By the way ...LOL ..I think it might have been Morgan Stanley issued a downgrade on that sector towards the very bottom of the range ....might want to think about that !

 

[Paul71]

Smart money creates trend, dumb money follows trend.

Text books are written for dumb money! Text books don't ask you to change or create the trend/direction!

How does smart money know how to create trend/direction?

P.S This was not directed at you, Chump. Not specifically, anyway.

 

[chump]

"Smart money creates trend, dumb money follows trend" ..no , dumb money keep following a trend when there is no trend to follow

 

[Paul71]

"Smart money creates trend, dumb money follows trend" ..no , dumb money keep following a trend when there is no trend to follow

I thought that was the dumber money.

 

[chump]

Wyckoff said , small traders should be similar to hitch hikers ...hop on ..hop off ...this is the mobility that big money does not have so I wonder who really is dumb and dumber ..

 

[Paul71]

Wyckoff said , small traders should be similar to hitch hikers ...hop on ..hop off ...this is the mobility that big money does not have so I wonder who really is dumb and dumber ..

Maybe.

But to be a good parasite you have to understand the beast you are feeding off, otherwise, the beast eats you.

The beast does not have to understand the parasite.

 

[wasp]

Maybe.

But to be a good parasite you have to understand the beast you are feeding off, otherwise, the beast eats you.

The beast does not have to understand the parasite.

what a pleasant analogy!

 

[Paul71]

what a pleasant analogy!

 

[chump]

The nearest I can summarise my view here is this ..if I had vol info on the above chart then if it looked right I would have bought the short run and puked with a stop under the low ,but contrary to the books it would not have been tight. I would stay away then from my entry until I saw the pro money had backed and filled and declared itself satisfied to move up. I can them move with their trail. Problem is for some people my stops will be further away than most peeps care to live with until they put volume in where it should not be...having cleared a way up if I see widespread bars on higher than average vol I know they are distributing so I will close the gap. Essentially you let the pro money clear the way then move up behind them ..if you have the art of this then when they clear you away you'll know they are done.

 

[barjon]

Short term shenanigans aside, doesn't it rely on money flow at the end of the day?

More money coming in, prices will rise and vice versa. When the big boys playing with their own money start taking money out then watch out. Course, they are different from the big boys playing with retail money - if the public keep giving it to them then they've got to put it somewhere.

good thread

jon

 

[counter_violent]

........can the dominant create their OWN weakness?

I like this. :arrowu:

given that trading happens on all time frames....when does a test become a weakness and on to the next time frame and test become weakness and so on .

take the chart examples on page ten of this thread .....a blow off and the big boys start to offload....to test for weakness in the first instance and to suck some dumb money into short positions ....no full retrace of a blow off in a shorter time frame indicates strength of overall price move.......great.... if price holds up ...big boys pile in again ......repeat over and over until final exhaustion