[DbPhoenix]

Originally Posted by R/R »

I was referring to this little consolidation that ground down to a point while the closes oscillated around the center line. Volume tended to decrease over the eight bars but I can see how it didn't fit the principle. Thanks for the correction.

You must have missed my PS on my previous post. FW posted the same thing only using a 1m interval, and it is a hinge. And, except for that one spike, which may be an anomaly, volume does decline throughout (more or less).

As for whether any of this amounted to a trade, sellers had their shot, then buyers, then they wound up back where they started. But you can't know that ahead of time, so if you're going to play these, you have to play all of them. Otherwise, they'll drive you crazy. Ask atto. He trades them as a matter of course.

[firewalker]

Originally Posted by R/R »

Volume tended to decrease over the eight bars but I can see how it didn't fit the principle. Thanks for the correction.

Actually, just by looking at your chart it seems to fit the principle pretty well imo.

Originally Posted by DbPhoenix »

You must have missed my PS on my previous post. FW posted the same thing only using a 1m interval, and it is a hinge. And, except for that one spike, which may be an anomaly, volume does decline throughout (more or less).

Yes, if it hadn't been for that 'anomaly' the volume declined would've looked more smoothly. And although the volume when price falls out of the hinge isn't spectacular, it's still noticeably higher than the previous 15 minutes.

Originally Posted by DbPhoenix »

As for whether any of this amounted to a trade, sellers had their shot, then buyers, then they wound up back where they started. But you can't know that ahead of time, so if you're going to play these, you have to play all of them. Otherwise, they'll drive you crazy. Ask atto. He trades them as a matter of course.

I'm a fan of hinges myself, but not that obsessed as atto (just jk). However, if this hinge exploded to the upside, I probably would've been more inclined to take the trade, since we were floating 2 points above decent support.

But instead, price fell out of the hinge to the downside, and I don't like shorting price so close to support. That's, imo, hoping for a break, something which isn't very likely during lunchtime. Also, if you moved your stop to breakeven in time, you could've gotten away with shorting the break.

[R/R]

Originally Posted by DbPhoenix »

You must have missed my PS on my previous post. FW posted the same thing only using a 1m interval, and it is a hinge. And, except for that one spike, which may be an anomaly, volume does decline throughout (more or less).

As for whether any of this amounted to a trade, sellers had their shot, then buyers, then they wound up back where they started. But you can't know that ahead of time, so if you're going to play these, you have to play all of them. Otherwise, they'll drive you crazy. Ask atto. He trades them as a matter of course.

thanks DB, I saw your edit and link after I made my post.

[DbPhoenix]

Originally Posted by firewalker »

I'm a fan of hinges myself, but not that obsessed as atto (just jk). However, if this hinge exploded to the upside, I probably would've been more inclined to take the trade, since we were floating 2 points above decent support.

But instead, price fell out of the hinge to the downside, and I don't like shorting price so close to support. That's, imo, hoping for a break, something which isn't very likely during lunchtime. Also, if you moved your stop to breakeven time, you could've gotten away with shorting the break.

OTOH, that "fell out to the downside" was a shakeout, and led to a move to the opposite. Again, neither may have been worth taking, but one can't know that in advance. What one can be cognizant of is the possibility of a thrust or shakeout when playing these, and not get freaked when price winds up going in the opposite direction.

The dynamics of this endgame are not difficult to understand. The hinge, after all, is created because of differences of opinion. That this testing should continue once one side or the other pushes price out of the hinge should not come as a surprise. But clearly one has to be quick on one's feet to avoid getting trampled.

[atto]

Trading hinges isn't that hard, but there's a few things you can pick up that'll increase your chance of success.

I had already quit for the day, so you're about to see some class A hindsight. I've plotted price (15s bars, but it doesn't matter how you view it), and volume (with a MA - gasp! - so it's a little easier to see the average volume). It's sometimes difficult to get a picture of what volume is doing when it's so spiky.

I highlighted the first time "hinge?" would enter my mind. From then on, I want to see volume dying off, and price coiling. Volatility sure drops off, but volume sicks around. The original lines I would have drawn are broken at 11:52, but volume was trash. Let's say, however, I was jonesing for a trade, and I took it. I'd be stopped in at 72.00 or 72.25. Initial stop is 71.00. Price waddles around the entry for 3-4 minutes, which would probably be enough to get me out for a couple ticks in the red. However, if I was stubborn, the push down at 11:56 would get me.

A stop out isn't the end of it, so I might be inclined to keep watching. Unfortunately, I'd scrap the idea at 11:59 or 12:05 due to the range it's holding and the volume spikes (which are fine... if price actually moves). Otherwise, you have both sides blowing their loads before any movement. It's lunch, what do you expect?

The reason I get particular about hinges is because the difference between a setup that almost always works (and works very well) and one that "often" or "sometimes" works is the small things. Another tip is that I like the midpoint to get some reaction. In this case, no one cared.

So no, I wouldn't have taken it for that shakeout (or after). If I ended up short in that shakeout down, it would be because the congestion broke out. And firewalker brings up an excellent point about support being so close.

[DbPhoenix]

This hinge was the subject of some discussion this morning in chat.

Price reversed at 1600 as anticipated, but while most of us were waiting for price to find support at 75, price had other ideas. Rather than 75, it found support at 79, the midpoint of Friday's hinge.

Moral? Don't overlook these little suckers when doing prep for the coming day.

[quark]

Man, what a great thread. How did the interest fizzle? I've been searching charts, does anyone have any recent examples of hinges?

[DbPhoenix]

Originally Posted by quark »

Man, what a great thread. How did the interest fizzle? I've been searching charts, does anyone have any recent examples of hinges?

It is good, esp atto's contributions.

The threads got only two votes. Give it a ranking and maybe it'll attract more attention (just click Rating in the toolbar).

Db