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 over it before plunking down any money for something that may be of little or no use to them.
Good trading.
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 over it before plunking down any money for something that may be of little or no use to them.
Good trading.
For Mar 28
.
Since this will be the last in this series, I've decided to do ES just for the hell of it. I haven't traded it in dog years, and even then I I didn't focus on it, so there may be more unpredictability here than I anticipate. On the other hand, I see no reason why the principles and tactics I've detailed in this series over the past three weeks shouldn't apply here as well.
We'll see.
.
.
Looks like we're going to open within the previous volume range, so, again, the same drill: buy support, sell resistance.
.
Mid-day
0940 1335 is presenting resistance issues. And the opening low, coinciding with support, is expected. Midpoint of this particular range is 1339, which price rejected pre-mkt.
0945 1330.5 rejected twice with a TD.
0950 The above setup invalidated just a couple of minutes later, but a long would not have been triggered anyway. However, there is clearly support between 29 and 31. For the aggressive trader, there is a retest and long entry off the 5s.
0955 ES sluggish. NQ performing much better.
1000 And here we are at 1335 again and no TD (keeping in mind that the TICK is linked to the NYSE, not the S&P). If the T can be relied on, price will likely go higher.
1010 Price goes higher and 35 appears to be acting as support, but there’s no follow-through. Could be considered a retest and rejection of the midpoint. Or resistance from the lows of Wednesday (which are also the bottom of Wednesday’s “box”). Also note that all of this coincides with news. Given that there’s a TD here, there is a justifiable short.
1015 Below 35 again.
1035 35 again tested as resistance. 35 now formidable.
1045 A rejection of support area again and on high volume. For the sake of consistency with what I’ve been posting these three weeks, this would be the place to prepare for exiting the short and taking a long trade.
1100 No TD on the poke below 28. Wait for higher low and/or break of the supply line.
1120 Gratifying to see that I was correct about 30 to begin with, not because I was correct, but because it validates the application of what I’ve been doing with the NQ.
1200 Another test of 1335. No TD, but this price is rejected decisively. The trader has to consider exiting his long and shorting again.
1215 And here we are back at support.
1245 Price tries, but it can’t do it. Instead it drops toward yesterday’s low. Volume is on the downside and there’s no TD, so no special reason to cover or reverse. Next level of support is 20.
.
.
EOD
1515 And here we are at 1320.
.
.
Since this will be the last in this series, I've decided to do ES just for the hell of it. I haven't traded it in dog years, and even then I I didn't focus on it, so there may be more unpredictability here than I anticipate. On the other hand, I see no reason why the principles and tactics I've detailed in this series over the past three weeks shouldn't apply here as well.
We'll see.
.
.
Looks like we're going to open within the previous volume range, so, again, the same drill: buy support, sell resistance.
.
Mid-day
0940 1335 is presenting resistance issues. And the opening low, coinciding with support, is expected. Midpoint of this particular range is 1339, which price rejected pre-mkt.
0945 1330.5 rejected twice with a TD.
0950 The above setup invalidated just a couple of minutes later, but a long would not have been triggered anyway. However, there is clearly support between 29 and 31. For the aggressive trader, there is a retest and long entry off the 5s.
0955 ES sluggish. NQ performing much better.
1000 And here we are at 1335 again and no TD (keeping in mind that the TICK is linked to the NYSE, not the S&P). If the T can be relied on, price will likely go higher.
1010 Price goes higher and 35 appears to be acting as support, but there’s no follow-through. Could be considered a retest and rejection of the midpoint. Or resistance from the lows of Wednesday (which are also the bottom of Wednesday’s “box”). Also note that all of this coincides with news. Given that there’s a TD here, there is a justifiable short.
1015 Below 35 again.
1035 35 again tested as resistance. 35 now formidable.
1045 A rejection of support area again and on high volume. For the sake of consistency with what I’ve been posting these three weeks, this would be the place to prepare for exiting the short and taking a long trade.
1100 No TD on the poke below 28. Wait for higher low and/or break of the supply line.
1120 Gratifying to see that I was correct about 30 to begin with, not because I was correct, but because it validates the application of what I’ve been doing with the NQ.
1200 Another test of 1335. No TD, but this price is rejected decisively. The trader has to consider exiting his long and shorting again.
1215 And here we are back at support.
1245 Price tries, but it can’t do it. Instead it drops toward yesterday’s low. Volume is on the downside and there’s no TD, so no special reason to cover or reverse. Next level of support is 20.
.
.
EOD
1515 And here we are at 1320.
.
.
Total Comments 6
Comments
|
tick divergenceHow are you defining a TD ? Myself I look at the swings and define a TD from the previous swing low to immediate lower swing low...ditto from swing high to immediate higher swing high...
erie |
 
|
|
|
Depends on what you mean by "immediate". I look for divergences within the same general thrust in order to gauge the underlying strength or weakness. If it's an entirely separate swing, any divergences are generally meaningless.
For instance, price hits 30.5 at 0941. It then hits it again at 0943 with a considerably higher TICK. While this might be considered a separate effort given the intervening bar, I consider it part of the same push. Either way, there's a divergence. When it hits it again at 0945, the TICK is higher still. Even so, it turned out that this was not true support and a long entry would not have been triggered. True support was found during the next five minutes. Without getting into all the complexities of selling climaxes and retests and so forth, the short, sharp poke down to 1329, accompanied by strong volume and a rapid recovery above support is characteristic of a shakeout. If one waits to enter until after that little pause between 30 and 31, it's a pretty safe trade. Later, at 1003, price makes a high along with the TICK, but while price keeps pushing at 36.5, the TICK is in steady decline. There are plenty of examples in earlier charts. I stopped providing the annotations on Wednesday because I figured people could do it themselves by then. Maybe not.  |
|
|
|
|
Excellent explanation of how you employ tick divergences Db, and another quality blog entry. Thanks.
|
|
|
|
|
Now let's see if anybody can actually use it
|
|
|
|
|
have been learning to apply the principles on HSI in past few weeks and I have question about volume range extension
When the volume ranges overlap with each other similar to the last three rectangles in your first chart, should I use a union rectangle for the whole area to locate the just one set of support, resistance & mid point or treat each range individually? Thanks! |
|
|
|
|
I treat each range individually since each represents a particular range of trading activity.
As to which I choose to focus on, it depends on where price opens. If it opens within the range of the most recent box, I look for support and resistance within that box. If it exits the box toward what appears to be a range extension, I look to previous boxes to give me a potential support or resistance target. Whether the price ever gets there or not depends on what traders do with it in real time. |
|
|
Recent Blog Entries by DbPhoenix
- Seven Habits of Ineffective Traders (05-13-2008)
- The Trading Log: Appendix (04-29-2008)
- The Trading Journal: Appendix (04-29-2008)
- The Trading Journal: Appendix (04-29-2008)
- Wyckoff the Great (04-26-2008)
