The purpose of this is to serve as a closet, or attic, or self-storage facility. A place for me to store what I don't want to lose, all in one place, partly for me, but largely for those who may be interested in what I think about market stuff and trading stuff.
I've reserved the right to moderate comments. Assuming that this works, the point of it is to keep the blog on task as much as possible. Substantive questions will be answered, if I can, but good wishes and so forth will not be posted, not because I don't appreciate them, but because all of that is a lot for newcomers to wade through after a while, so please don't be insulted if you don't see your comment posted.
The first post is a link to a preview of my book. This may be of no interest to you whatsoever, but I do encourage those who are interested to at least look it over before plunking down any money for something that may be of little or no use to them.
Good trading.
Note: it may not be immediately apparent that this is neither a journal nor a trading log. Therefore, the chronology of the posts is immaterial. The posts are instead organized according to the "categories" listed in the sidebar on the left.
I've reserved the right to moderate comments. Assuming that this works, the point of it is to keep the blog on task as much as possible. Substantive questions will be answered, if I can, but good wishes and so forth will not be posted, not because I don't appreciate them, but because all of that is a lot for newcomers to wade through after a while, so please don't be insulted if you don't see your comment posted.
The first post is a link to a preview of my book. This may be of no interest to you whatsoever, but I do encourage those who are interested to at least look it over before plunking down any money for something that may be of little or no use to them.
Good trading.
Note: it may not be immediately apparent that this is neither a journal nor a trading log. Therefore, the chronology of the posts is immaterial. The posts are instead organized according to the "categories" listed in the sidebar on the left.
Getting Down to Cases
So how does AMT play out in trading? There are several ways of locating the requisite support (upper limit), resistance (lower limit), and consolidations (or congestions or trading ranges or any sort of sideways movement). One can, for example, plot a volume distribution (the hinge is circled):
And as it turned out.....
Drawing a line below the bottom of the middle distribution gives one a zone on which to focus, particularly when price opens below this zone (price also opened below this zone the previous day, leading to another profitable trade):
Or one can draw a box around the congestion:
Or one can use plain ol' S/R lines, noting the test of the previous day's high:
All ways of illustrating the same thing. And it doesn't require special software.
This, then, is what one should have had for the day following the previous chart, at minimum. If one doesn't know in advance what he’s going to do at each point, then he’s not prepared.
This, then, is what one should have had for the day following the previous chart, at minimum. If one doesn't know in advance what he’s going to do at each point, then he’s not prepared.
And this is what happened the day after that:
Price finds support at B, resistance at C.
Preparation, Execution, Review.
Price finds support at B, resistance at C.
Preparation, Execution, Review.
Let's see how it all worked out (same chart but drawn with Sierra):
Monday and Tuesday, price tested R (C). Thursday it bounced off the midpoint of the lower trading range (D) and tested R (C) again. Friday it dropped to S (E).
The advantage being, again, that all of this can be plotted in advance, saving one from having to peer fixedly at his screen for however long looking for a particular type of bar.
For the coming week, the setup was the same, keeping in mind that the interface between the two ranges, at 1970, might take on added importance.
Monday and Tuesday, price tested R (C). Thursday it bounced off the midpoint of the lower trading range (D) and tested R (C) again. Friday it dropped to S (E).
The advantage being, again, that all of this can be plotted in advance, saving one from having to peer fixedly at his screen for however long looking for a particular type of bar.
For the coming week, the setup was the same, keeping in mind that the interface between the two ranges, at 1970, might take on added importance.
Note that while intraday data is included in these charts, the principles of AMT apply regardless of the bar interval of the chart, even if there is no bar at all (e.g., a tick chart or a T&S digital display). The high of the range is the high of the range, regardless of how one chooses to display it. Ditto the low of the range. And the bulk of the trades take place in the middle. Therefore, whether one trades off a tick chart or a weekly chart, he can incorporate AMT principles into his work.
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