Originally Posted by johnjohn1hew  My statements were ignored in the Hinges thread, so i decided to move over here. |
Since, as you said, you made statements and not questions in Hinges thread, the fact that there was no reply needn't imply that those statements were ignored. Usually there are replies to questions. A statement deserves a reply in two cases. Either when it is so wrong that it needs to be corrected or when it is so brilliant that others show their appreciation.
Originally Posted by johnjohn1hew Here is my definition of a hinge:
It is an occurrence where neither side has an inclination to see price head anywhere (due to the testing of their patience), represented by the traders' lack of participation. What ever buyers are willing to take price up, realize that they will most likely just be overcome and price will go back down and the sellers do the same thing when they are getting closer to the support. These movements become smaller and smaller until price is practically a straight horizontal line. When price becomes nothing, i conclude that the previous directional disposition is eliminated and a new movement (whether it is in the same direction as the prior movement or not) is it come.
What is your opinion? |
I believe the nature of hinges is well explained in the Hinges thread or in Db's blog, but since you ask for yet another opinion, my opinion is that hinges represent indecision. Not because traders would like to test their patience or because they would "realize they would be overcome" but because they are simply not sure about direction. Or at least sure to that extent that they would show enough effort to break the last swing point.
As to where the hinges form, one can expect them to form where the traders are likely to be unsure. That is before news, in centers of developing ranges and above S, below R or around both.
As for elimination of the previous directional disposition, it is true in appropriate proportions (on appropriate trend scale). If one is interested in trading across more wave scales he needs to be aware of the scale, location and context of the hinge. He should be aware of what it is the traders are indecisive about. That's not only direction but also a meaning of where we are going from (what does the midpoint represent) and going to (what we are against or not against in case of any particular direction).
As for the ending of the hinge, that "horizontal line", it is usually not a line at all, or at least I don't perceive it that way. The hinge is just a series of tests. And in the end of the hinge, there is usually the final test. What one can see as a line is usually a test of midpoint of the hinge. The fact that traders in force (either bulls or bears) don't manage to test the other side but are stopped with almost no effort in midpoint (in fact they are not stopped but rather stop by themselves) implies that they are done. Reversion to the mean doesn't require any particular effort. What requires effort is trying to push to the other side. So once they don't push through the midpoint I expect they are done. Of course this is not the only possible ending of a hinge, but I think it is the one which is the best readable and quite common.
And last, I am not an expert on hinges. I am just a beginner on a sim who, as of now, doesn't even trade them. If you are interested in hinges in particular, I think atto or Db are the best people to enlighten you. You can often reach them in the chat room and debate about developing hinges in real time.
Linear Mode
