Real Time Price Action- Clue to Puzzle?

[smwinc]

	Quote:	AgeKay
	I've also found that there is no noise in the market. I could even say that longer term price movements are more random than short term price changes since long term price movements are just a function of all this 'noise' in the short-term. Each trade is significant and can change all trades following it (like the bufferfly effect). Imagine one contract changing the best/bid ask price because there is only 1 contract left in the limit order book on one side. This price change could trigger buy/selling by other traders which could trigger even more orders. All of the sudden, the market is going down/up hard while you're still waiting for your bar to close.

Exactly. It is much easier to predict the next 10 seconds than the next day. If I had to recommend ONE thing to new traders, they need to understand this.

SMW

[DbPhoenix]

	Quote:	erierambler
	Pre day snapshot that I look at..... erie

Into MP now, eh? I find it interesting how MP tidies up some of the more important concepts that Dow and Hamilton and Wyckoff first articulated. I wish it hadn't gone so far into jargon and software, but that seems to be the way of it these days.

In any case, it's pushed me to focus more deeply on what support and resistance and the tendency toward a mean are all about. I'm also finding that stuff I sloughed off years ago I'm now re-evaluating in terms of what I've learned in the meantime. Like the TICK. You'd think that after all this time I'd have it all nailed, but I don't suppose that's possible with a market that's continuously and forever evolving.

The trick is to get past the jargon and the software and the ranting (much of which sounds exactly like I've accepted Jesus as my Personal Savior only substituting the name of whatever system or method it is for Jesus) and get to those subatomic nuggets that contain the real stuff.

Edit: for example, I suppose software could show you at what levels trades are clustering, but is it really that difficult to do oneself? It's certainly cheaper.

Note also where those "pivot points" are pointing . . .

Further edit before my time runs out: Note that 70 was reconfirmed overnight.



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[Nvesta81]

	Quote:	DbPhoenix
	The pivots do seem to "work", but they are so far off the actual turning points that they can be used only as a guide. I suppose they are most useful for those who have no idea how to located S/R. What I'd suggest for those who want to learn, though, is to plot the points, then extend those lines to the left to find those levels that have been repeatedly tested, then focus on those levels themselves, using pivot points as training wheels.

I'll keep that in mind. I also plan on posting a chart after today's trading to illustrate what I mean. All my pivots are already plotted on my chart. I'm curious to see if those levels will work as effectively as they did yesterday to look for as turning points. They seem to work more often than not, for me at least. I usually get my numbers from this site: http://www.mypivots.com/dn/?symbol=63

[tune]

Would you mind putting the TICK aside a chart at the end of the day Db. Be interesting to see.

[DbPhoenix]

	Quote:	tune
	Would you mind putting the TICK aside a chart at the end of the day Db. Be interesting to see.

Now that's something that most definitely does not lend itself to a static presentation. It's too easy to cherry-pick examples. Try plotting it in a little window somewhere, not as part of your primary chart display, and glance at it now and then, especially when price gets to the outer reaches of whatever zone you're looking at. It doesn't take up much space. Doesn't require anything but itself: no indicators, no volume.

[DbPhoenix]

	Quote:	Nvesta81
	I usually get my numbers from this site: http://www.mypivots.com/dn/?symbol=63

Yes, you have to admire Guy. He's one of the few people who continues to do this stuff for free.

[erierambler]

	Quote:	DbPhoenix
	Into MP now, eh? I find it interesting how MP tidies up some of the more important concepts that Dow and Hamilton and Wyckoff first articulated. I wish it hadn't gone so far into jargon and software, but that seems to be the way of it these days. In any case, it's pushed me to focus more deeply on what support and resistance and the tendency toward a mean are all about. I'm also finding that stuff I sloughed off years ago I'm now re-evaluating in terms of what I've learned in the meantime. Like the TICK. You'd think that after all this time I'd have it all nailed, but I don't suppose that's possible with a market that's continuously and forever evolving. The trick is to get past the jargon and the software and the ranting Note also where those "pivot points" are pointing . . .

Actually Esignal has a tidy efs called price profile, it's free. It gives me 3 days worth and I print it out every night and save it so i can go back weeks if I have to. It is surprising in congestion how accurate it works. And yes one has to get past the jargon , it's only the concepts that give one something to build on. As far as the $Tick is concerned I've noticed a difference ever since the divergence with the $Transports in Oct/07. I'm not sure I understand what you mean about "tendency toward the mean."
erie

[DbPhoenix]

	Quote:	erierambler
	I'm not sure I understand what you mean about "tendency toward the mean." erie

That the business of trading is trading, and professional traders have to go where they can find trades. And given the quantities they're dealing with, they drift toward those prices where they are most likely to find the most takers. That is the central zone of whatever range one finds himself in (the mean itself is purely mathematical; practically one looks at a range, tight though it may be, around that mean).

The farther one gets away from that "central tendency", the fewer the trades. And when one gets to the extremes, the trading ops virtually evaporate, and you get your turning point. "Resistance", therefore, becomes not just resistance found at a previous trading level but also resistance to further movement.

[shreem]

Hello DbPheonix, the above post about the mean and its explanation is really interesting.

For me, the concept of price going to extremes and retreating back toward its mean is really the kind of trades that I am looking at and I do consider them to be the most high probability trade setups.

As price, and for that matter, anything in life, is always in constant motion to find a perpetual moving equilibrium, looking for a trade going back to the mean (equilibrium) really does make sens.

That is where Market Profile can be handy with the mean (POC) and previous naked means (naked POC or untouched previous POC) can be the center line in one own target.

Of course, how one calculate and decide which support and resistence zone to use is a different matter. However, by reading your book and your different posts, it make sens a lot to me how you calculate and find those S and R zones, levels and points and the means associated with them.

That is why looking and studying the core of all great traders of the past as Dow, Whycoff and others, is really the way to go.

Again, thank a lot for your valuable contribution to this forum

Sincerely

Shreem

[jperl]

	Quote:	shreem
	That is where Market Profile can be handy with the mean (POC) and previous naked means (naked POC or untouched previous POC) can be the center line in one own target.

Be careful here on how you define the mean. The POC is the mean only if the distribution function is symmetric (as in a Normal Distribution). On most days it is not symmetric, in which case the mean is defined by the volume weighted average price, the VWAP, which can be quite far from the POC. For a complete discussion of the VWAP and how to trade it see the 11 threads on "Trading with Market Statistics" which starts here

	Quote:	shreem
	Of course, how one calculate and decide which support and resistence zone to use is a different matter. However, by reading your book and your different posts, it make sens a lot to me how you calculate and find those S and R zones, levels and points and the means associated with them.

There are many types of computations for so called "support and resistance". Unfortunately this term has been very much over used and misused. A so called "support" point for instance is only a support point if the market actually reverses at that point. Similarly for resistance. A better interpretation would be to call such points Holdup Price Points which I call HUP. These are price regions where the price action slows down before either continuing on in the same direction or reversing. The "Trading with Market Statistics" threads describe these point in some detail.