[traderwilliam]

WinSum, would you please elaborate on where are the stop locate for trend trader?

[WinSum]

Sure, prior to last week, most ppl would agree the market was in an Uptrend.

If you bring up a TPO chart on the Russell 2000 from 12/7/06 to 2/23/07, you can see a node forming on the top of the uptrend. From 831.90 to 821.30, the node was developing into a bell curve profile. If the uptrend was going to continue, it would break out of this balance area and continue its move up.

There was a node below that and the POC was at 817.60. If price comes back into the POC of the prior node, this would be the uptrend has stopped and trend traders should be alerted and have their protective stop losses in place. They will no longer be bias long.

People who were pullback buyers on 2/27/04 got clobbered because the other time frame buyers were no longer bias long. The price has gapped down below the prior node's midpoint.

[traderwilliam]

Winsum, thanks for your explanation

[Bfbusa]

Soul, the link to this video is missing.

[Soultrader]

Bill, can you try viewing it again to see if there is still problems? I am viewing it fine from here. Thanks

[Jennifer]

Soultrader,

Thank you for this interesting concept. I am trying to get a sense of how to define "balance areas"... Is there an indicator that would help outline or define the balance areas or would you explain a little further what the criteria is for a balanced area?

thanks
Jennifer

Originally Posted by WinSum »

People who were pullback buyers on 2/27/04 got clobbered because the other time frame buyers were no longer bias long.

Yep, and if you set your stops around the GAPPs (generally accepted pivot points), look for them to get hit more often than not.

[Soultrader]

Originally Posted by Jennifer »

Soultrader,

Thank you for this interesting concept. I am trying to get a sense of how to define "balance areas"... Is there an indicator that would help outline or define the balance areas or would you explain a little further what the criteria is for a balanced area?

thanks
Jennifer

Im not sure about indicators but look for congestion areas. In other words, the markets will move and then take a breather. Trend > range > trend > range.

How would you define a congestion area? Its really up to you... might be when price touches the same S&R twice, when price rotates back and forth at a reference forth, etc...

I dont use strict rules for what defines a balance area or not. I just eyeball it.