Wot Happens Next?

piphoe

Well-known member
Oct 31, 2015
9,957
194
123
#21
It's been a few years since the last Wot Happened Next series so thought I'd start another with slightly different twist. Changed "happened" to "happens" so we're looking forward. Interested in how TA might be used as a tool for trading (NOT as a predictor).

So, here we go. The instrument is Diageo (DGE). You will see from the weekly chart that price has made four failed attempts to close above the March high and has now done so. Also you will see from the daily chart that it has also closed above the earlier daily high closes although it has not challenged the intraday high reached on 17/5

How, then, would you plan to trade it?
barjon, pls be sure to tell us which way it does go eventually. i want to learn from this. tnx
 

wallstreetwarrior87

Well-known member
Oct 14, 2009
1,282
253
93
#22
It's been a few years since the last Wot Happened Next series so thought I'd start another with slightly different twist. Changed "happened" to "happens" so we're looking forward. Interested in how TA might be used as a tool for trading (NOT as a predictor).

So, here we go. The instrument is Diageo (DGE). You will see from the weekly chart that price has made four failed attempts to close above the March high and has now done so. Also you will see from the daily chart that it has also closed above the earlier daily high closes although it has not challenged the intraday high reached on 17/5

How, then, would you plan to trade it?
Is using TA as a tool, but not as a predictor a bit of a contradiction, as at the end of the day surely any plan must involve prediction? Just interested, as if it wasnt to predict, why ever use TA? What is the point of TA other than as a decision making process?

Nice idea for the thread BTW!

I agree with what a few others have said with regards to being accumulated earlier, but maybe too late to get in long unless we pullback from here without taking out 2370/80.

We are still near the 52 week highs (so too dangerous to consider selling at the moment), but we have failed to generate new buying interest at the highs. The bigger players still hold long, but wont keep holding forever.

So we are better waiting for a pullback after a "failed B/O" - then looking for an entry about 2260/50 (TA based Pullback) to buy into 2440 ish.

At this point, those that have accumulated will seriously off load n the 2400/500 zone (which has already been mentioned by others). Would really need a decent correction then as bigger players would be fairly flat in their holdings.
 
Likes: barjon

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#23
Is using TA as a tool, but not as a predictor a bit of a contradiction, as at the end of the day surely any plan must involve prediction? Just interested, as if it wasnt to predict, why ever use TA? What is the point of TA other than as a decision making process?

Nice idea for the thread BTW!

I agree with what a few others have said with regards to being accumulated earlier, but maybe too late to get in long unless we pullback from here without taking out 2370/80.

We are still near the 52 week highs (so too dangerous to consider selling at the moment), but we have failed to generate new buying interest at the highs. The bigger players still hold long, but wont keep holding forever.

So we are better waiting for a pullback after a "failed B/O" - then looking for an entry about 2260/50 (TA based Pullback) to buy into 2440 ish.

At this point, those that have accumulated will seriously off load n the 2400/500 zone (which has already been mentioned by others). Would really need a decent correction then as bigger players would be fairly flat in their holdings.
maybe you can approach it on the basis that you don't know what it is going to do but that if it does x you'll do one thing and if it does y you'll do another. So you're not really predicting, just reacting?
 

piphoe

Well-known member
Oct 31, 2015
9,957
194
123
#24
i'd love to answer but...i wouldn't do anything "here" (referring to original charts). i don't see any edge that "I" can exploit.

i'd wait & see. (i know that's not really an answer in the spirit of this great thread)

On future charts that barjon places, i'd love to consider !
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#25
barjon, pls be sure to tell us which way it does go eventually. i want to learn from this. tnx
Opened lower and continued that way and took out the breakout day low. Recovered quite strongly though to close at 2323. Warning light on against a trade ATM.
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#26
maybe you can approach it on the basis that you don't know what it is going to do but that if it does x you'll do one thing and if it does y you'll do another. So you're not really predicting, just reacting?
Ps:............ and rely on trade and money management to turn your profit rather than prediction.
 

piphoe

Well-known member
Oct 31, 2015
9,957
194
123
#27
Opened lower and continued that way and took out the breakout day low. Recovered quite strongly though to close at 2323. Warning light on against a trade ATM.
when you get time would you post another chart updating?

i could look it up for sure but i'm not familiar with that instrument.

either way, thx
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#28
when you get time would you post another chart updating?

i could look it up for sure but i'm not familiar with that instrument.

either way, thx
Bit late, pip, sorry.

Price opened lower and continued down to its low point in the first hour, but recovered steadily in the afternoon session. The low point below the low of the break-out (assumed) bar would have meant a red light for any trade but for the afternoon recovery. Still a warning light though.
 

Attachments

Atilla

Well-known member
Nov 15, 2006
18,102
2,476
323
#30
Need to be aware re: cable fluctuations reflected in share price imo.

Inverse relation to currency fluctuations impacts bottom line. This is likely to be a one off positive hit on earnings.

Hate to imagine where share price would be if the pound ever took back the 1.40s. :whistling
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#31
Filled this morning @ 2344 after upward gap opening and continued rise. Promptly turned tail and now 2339. After the warning light from yesterday I'm running a much closer stop @ 2321 (guided by yesterday,s close) but not changed planned position size. Oh, back up a bit to 2343
 
Apr 3, 2017
3,620
136
73
#32
Filled this morning @ 2344 after upward gap opening and continued rise. Promptly turned tail and now 2339. After the warning light from yesterday I'm running a much closer stop @ 2321 (guided by yesterday,s close) but not changed planned position size. Oh, back up a bit to 2343
If this was cable related , did you consider just selling cable instead?
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#33
If this was cable related , did you consider just selling cable instead?
No, I hadn't intended the thread to be about the wide variety of possible trading decision. It is mainly about how TA can be used as an aid despite its frailty as a predictor.
 
Apr 3, 2017
3,620
136
73
#34
No, I hadn't intended the thread to be about the wide variety of possible trading decision. It is mainly about how TA can be used as an aid despite its frailty as a predictor.
Why did you not add the ranging set ups on the other correlated indices on dow , s and p , dax etc to give a high probability entry?
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#35
Why did you not add the ranging set ups on the other correlated indices on dow , s and p , dax etc to give a high probability entry?
Because I chose DGE. I trade uk equities, normally 3+ bar retracements, but this one popped up to demonstrate the TA point I wanted to make.
 

barjon

Well-known member
May 6, 2003
9,998
1,448
223
78
#36
Ok, guys, we've moved off favourably to extent of ten points or so and now we move into the more crucial part of the business - trade/money management.

So what might you plan to do and what use might you make of TA?
 

dbphoenix

Well-known member
Aug 24, 2003
6,907
1,150
223
#37
Ok, guys, we've moved off favourably to extent of ten points or so and now we move into the more crucial part of the business - trade/money management.

So what might you plan to do and what use might you make of TA?
No change from my original post.
 
Apr 3, 2017
3,620
136
73
#38
Ok, guys, we've moved off favourably to extent of ten points or so and now we move into the more crucial part of the business - trade/money management.

So what might you plan to do and what use might you make of TA?

double your position , pyramid positions ,blow job!

In fact I would do nothing , b/e moving stop is bxx , take the full risk play poker.