Price, (Volume), Support, Resistance, Demand, Supply . . .

[bludmonkey]

fw, your rectangles look like higher highs and higher lows to me and a higher low on less volume means selling is exhausted when it comes right after a downtrend. Also the low of the second rectangle stops at the high of the previous rally which I believe is a sign of strength.
I suppose a big "I think" is warranted here.
steve

 

[firewalker99]

fw, your rectangles look like higher highs and higher lows to me and a higher low on less volume means selling is exhausted when it comes right after a downtrend. Also the low of the second rectangle stops at the high of the previous rally which I believe is a sign of strength.
I suppose a big "I think" is warranted here.
steve

I agree you make some points. But that's just it with these arguments.
Nobody seems to disagree with mine, they just see other things. Throw them all together and you've got 5 reasons why it's a weak market, 5 why it's a high, 5 why you'd short and another 5 why you'd go long... it seems like anybody can give me - on any given chart - a signal why you should buy or sell...

 

[dbphoenix]

I agree you make some points. But that's just it with these arguments.
Nobody seems to disagree with mine, they just see other things. Throw them all together and you've got 5 reasons why it's a weak market, 5 why it's a high, 5 why you'd short and another 5 why you'd go long... it seems like anybody can give me - on any given chart - a signal why you should buy or sell...

FW, you seem not to understand the purpose of testing or the testing procedure. If this is the case, read those posts in the Trading Journals thread below which address that (5, 8, 9). Then the details can be worked out in your journal.

YOU determine the signal by specifying the conditions you're looking for and YOU determine whether or not those conditions will provide a high-probability signal by testing. Even if anybody were to give you a signal, whatever results you might get as a result of using it would be little or nothing more than luck.

Db

 

[firewalker99]

YOU determine the signal by specifying the conditions you're looking for and YOU determine whether or not those conditions will provide a high-probability signal by testing. Even if anybody were to give you a signal, whatever results you might get as a result of using it would be little or nothing more than luck.

Db

I agree that if I were to see something that has a particular meaning for me, it's up to me to back- and forward test it and so forth. I don't expect anybody here to give me a hunch of a high-prob entry for a succesful trade. But as some people argue that I'm not seeing the obvious signals of for instance a weak or strong market, I'm only pointing out that I'm seeing totally different things. Only thing I'm wondering about is why do manage to see signals that others would completely ignore or would see as an argument to the opposite.

 

[firewalker99]

FW, you seem not to understand the purpose of testing or the testing procedure. If this is the case, read those posts in the Trading Journals thread below which address that (5, 8, 9). Then the details can be worked out in your journal.

Db

I'm aware of the scientific method and the different stages that it encompasses. I've had to apply it in several research projects and studies I've been through while studying for me IT and economics degree. Instead, it seems the more I've learned over the years, the more it tampers with my ability to start trading. I'll check out your posts again, but I'll keep repeating that personally I think my problem lies in the first stage: observing.

Observing any phenomenon requires you have an idea of what you're looking for else you'd be observing hundreds of little details that could all hold the potential key but in itself are meaningless. Of course having a bias towards a certain phenomenon than I'd be looking exactly for those signals that would only confirm my ideas and I would be ignoring any signs of the contrary. Seems like a paradox to me. How to observe neutrally without looking for something in particular, but observing without looking at something can keep you busy for quite some time.

 

[dbphoenix]

I agree that if I were to see something that has a particular meaning for me, it's up to me to back- and forward test it and so forth. I don't expect anybody here to give me a hunch of a high-prob entry for a succesful trade. But as some people argue that I'm not seeing the obvious signals of for instance a weak or strong market, I'm only pointing out that I'm seeing totally different things. Only thing I'm wondering about is why do manage to see signals that others would completely ignore or would see as an argument to the opposite.

What "some people" argue is irrelevant. All that matters is what is in the chart and whether or not you can profit from it.

You're allowing yourself to be pushed and pulled here and there by layer upon layer of opinions, which may be why you have yet to find something that is consistently profitable. All you need is access to charts, a pad of paper, and a pencil. It's all right there in front of you.

Db

 

[dbphoenix]

Of course having a bias towards a certain phenomenon than I'd be looking exactly for those signals that would only confirm my ideas and I would be ignoring any signs of the contrary. Seems like a paradox to me. How to observe neutrally without looking for something in particular, but observing without looking at something can keep you busy for quite some time.

No, you're not looking for signals that only confirm your ideas; you're looking for those signals and movements that generate a consistently profitable strategy. If they don't, then whatever bias you may have is counter-productive. You are not looking for nothing.

You may be correct that your "problem", as you put it, lies in observing, particularly if you think that observing means doing nothing more than staring. If you see no order or intent or consistency in any price movements that you observe, if the up-down movements seem entirely random, then an off-the-shelf system may be more appropriate for you.

Db

 

[dbphoenix]

Just for grins, and because it's the weekend, here's an ordinary chart.

Anyone see any possibilities for profit here?

If so, how might one go about exploiting them?

(As usual, no indicators, please)

 

[ljyoung]

I'm aware of the scientific method and the different stages that it encompasses. I've had to apply it in several research projects and studies I've been through while studying for me IT and economics degree. Instead, it seems the more I've learned over the years, the more it tampers with my ability to start trading. I'll check out your posts again, but I'll keep repeating that personally I think my problem lies in the first stage: observing.

Observing any phenomenon requires you have an idea of what you're looking for else you'd be observing hundreds of little details that could all hold the potential key but in itself are meaningless. Of course having a bias towards a certain phenomenon than I'd be looking exactly for those signals that would only confirm my ideas and I would be ignoring any signs of the contrary. Seems like a paradox to me. How to observe neutrally without looking for something in particular, but observing without looking at something can keep you busy for quite some time.

Fw,

As wee WIllie Clinton said, "I feel your pain". I worked as an inorganic biochemist for a number of years using spectroscopic methods to probe for mechanistic hints into the workings of so-called multi-electron reductases. Spectra were my life and so what could be more natural than to move from that discipline to the technicians' approach to the stock market.

Good idea but:
1. I didn't have a clue what I was looking for.
2. Even if I did have a inkling of what that thing might be I wouldn't have known what to do with it.
3. The damn thing (the chart) kept changing. It's called the hard, right, edge for a reason.

You are exactly correct that the most important of the working end of any scientific methodology is the accurate and truthful reporting of what we see. You fit the hypothesis to the data not the data to the hypothesis - period and end of story.

When I changed professions and became a day trader ( I day trade high beta stocks using the Kelly bettor paradigm) it took me a while to appreciate the fact that as a trader if I was anything less than absolutely and immediately honest in my dealings with the market, I got gutted. Even as a scientist I could give myself the benefit of the doubt for a while. Not so when dealing with the stock market .

So in the context of a trading play, pick some thing that you want to look at and then truthfully record what the market "does" to your idea. Be unflinching brutal with yourself because if you aren't, the market will do that for you.

Have a good weekend,

ljey

P: If you already know all this stuff - cool - just use it.

 

[millsy500]

Just for grins, and because it's the weekend, here's an ordinary chart.

Anyone see any possibilities for profit here?

If so, how might one go about exploiting them?

(As usual, no indicators, please)

hmmm. probably no where near but here goes. down trend channel for a wee while pulls back to just under 35 just past L and looks to have hit resistance. poosibly a dead cat bounce. I wouldn't trade this at the moment btw.
You could short now possibly with a stop just above resistance. Target of 26 support.

For me to trade this i would look for it to head back down to 26 support. Trade the breakout down or bounce off support at 26.

 

[Szimba]

Just for grins, and because it's the weekend, here's an ordinary chart.

Anyone see any possibilities for profit here?

If so, how might one go about exploiting them?

(As usual, no indicators, please)

Whether one plays reversals, breakouts or retracements here are the entry points what I see:

1 Reversal from support

2 Reversal from resistance

3 Breakout

4 Retracement to resistance

5 Retracement to resistance

If someone plays all or only one of them is only up to his trading strategy. Since I'm trading retracements, I would only enter 4 and 5.

Maybe there would be additional entry points if we could see the context from the previous days or weeks or whatever is here the bars represent.

 

[firewalker99]

Just for grins, and because it's the weekend, here's an ordinary chart.
Anyone see any possibilities for profit here?

Before taking a look at Szimba's reply, I took a shot at my own view:
Numbers 1 and 2 are the only points where I would have seen a short opportunity. After it goes up just a little bit through the line and drops back down, then I'd assume it would still be a continuation of the downtrend.
On all other points it didn't go back up to my red lines, so I'd be left out there to wander.

I'd also be looking where previous S/R zones were to be found.

 

[firewalker99]

Whether one plays reversals, breakouts or retracements here are the entry points what I see:

1 Reversal from support
2 Reversal from resistance
3 Breakout
4 Retracement to resistance
5 Retracement to resistance

How do you (in real time) distinguish a reversal from a retracement with having nothing more than price to look at?

 

[firewalker99]

No, you're not looking for signals that only confirm your ideas; you're looking for those signals and movements that generate a consistently profitable strategy. If they don't, then whatever bias you may have is counter-productive. You are not looking for nothing.

Db

So far I've read a lot of posts (I'm not pointing the finger at you, not at all) that say what I should NOT be doing instead of saying what I should be doing. I know nobody's going to give me a hands-on course and I have to figure it out for myself, I have to see what's in it for me - if anything but then again I must admit that after journaling for a week it feels like I've taken a step backwards instead of forwards. But perhaps this is necessary to put things back in perspective and forget about everything everybody else has been saying.

 

[firewalker99]

You may be correct that your "problem", as you put it, lies in observing, particularly if you think that observing means doing nothing more than staring. If you see no order or intent or consistency in any price movements that you observe, if the up-down movements seem entirely random, then an off-the-shelf system may be more appropriate for you.
Db

No, I'm not staring at a duck, when I'm looking at a chart (on print, on screen, be it realtime or not), I'm always trying to see a pattern. Looking for anything that indicates price doesn't move random. Sometimes I see some things, other times I'm unable to explain why it swings up or down, gaps up, drops down, moves sideways, etc... But as you pointed out, it's not my task to explain all this I just need to find a way to profit out of it. So no, they don't seem ENTIRELY random, but they don't seem to behave in a way that can be predicted neither. Ok, you'll probably argue t's all about probabilities, but suppose I see a signal, backtest it and it turns out 7 out of 10 (or 70 out of 100 for that matter) actually move up further after that signal. That's no way of saying it will work again, next week, month or year things could be totally different.

 

[firewalker99]

YOU determine the signal by specifying the conditions you're looking for and YOU determine whether or not those conditions will provide a high-probability signal by testing.
Db

What would then be a good definition of a high probability signal? If I were to look for one, I need to know actually what that is.

 

[dbphoenix]

No, I'm not staring at a duck, when I'm looking at a chart (on print, on screen, be it realtime or not), I'm always trying to see a pattern. Looking for anything that indicates price doesn't move random. Sometimes I see some things, other times I'm unable to explain why it swings up or down, gaps up, drops down, moves sideways, etc... But as you pointed out, it's not my task to explain all this I just need to find a way to profit out of it. So no, they don't seem ENTIRELY random, but they don't seem to behave in a way that can be predicted neither. Ok, you'll probably argue t's all about probabilities, but suppose I see a signal, backtest it and it turns out 7 out of 10 (or 70 out of 100 for that matter) actually move up further after that signal. That's no way of saying it will work again, next week, month or year things could be totally different.

You're providing yourself with two choices: random or chaotic, with nothing in between. That you say that a trade that works out 70% of the time won't necessarily work again next week is correct, but you say it as though you expect the trade to work again next week. However, there is only a 70% probability that it will work next week. That's the nature of probability, and that seems not to be acceptable to you.

Perhaps trading according to probabilities is not for you. Perhaps you are attracted more to the idea of trading intuitively using a multi-layered approach. But if the latter has not worked for you, then you have a choice of continuing to try to make that approach work, trying something else, or abandoning the effort altogether. All of that is entirely up to you.

As to your response to the chart I posted, you say that #1 and 2 would be shorting ops. Then you'd just wander. Why wander? How would you manage your risk? Would you not try to manage the trade in some way? How?

Db

 

[dbphoenix]

What would then be a good definition of a high probability signal? If I were to look for one, I need to know actually what that is.

In the backtesting, forward-testing, paper-trading and simulated trading you did, (a) what trading signals were you looking for and (b) why were you looking for them?

Db

 

[Szimba]

How do you (in real time) distinguish a reversal from a retracement with having nothing more than price to look at?

These are the questions you have to figure out yourself, if you want to create your OWN trading.
For me, I call reversal when price reverses from the boundary of a range. Retracement is when price reverses the direction in trend.

 

[rols]

What would then be a good definition of a high probability signal? If I were to look for one, I need to know actually what that is.

May I suggest you try a different approach temporarily before analysis by paralysis completely takes over?

The market is real so why not try to engage with it rather than struggle from a perspective of confusion and perplexity?

IMO until you can learn to 'let go' than no number of high probability signals would be of any use to you.

When the DAX opens next (I chose this because you mentioned it previously)just passively observe the price action alone and nothing else. The aim is to become the market, to internalise and flow with the other thousands of traders doing the same as you. This may sound touch feely BS but just try it. After a while you'll see where all the S & R levels are and more importantly the character of this market will become something you know and with much practise will be to some extent become predictable. Then when that stage is reached it will be time to get the charts back up and depending on how your unique intuitive reading of the market has formed then you in turn will be able to develop your own strategies relevent to your interpretation.

I hope this is of some help...