[DbPhoenix]

Originally Posted by daedalus »

could you explain what constitutes a "springboard entry"? I searched quite a bit in the Wyckoff forum and the entire forum for that matter (as well as google) for an explanation to no avail.

Just curious what makes a springboard entry. Thanks!

Springboards are addressed in sections 4, 7, 8, 14, 16, and 21, among those sections which are posted here. To save time, use Ctrl+F. There is also a section in my blog on springboards.

[forrestang]

I have a question, and it is pretty basic. So basic I'm sure it's answered somewhere here, and may or may not be obvious?

But the question is, when planning your day, what do you do when things just don't make sense in terms of plotting your S/R?

I experience this from time to time, I am fairly new at trying to exploit this dynamic of the market (trading mainly with S/R and not much else). There are times when I am planning my day the night before, and things just..... COME TOGETHER.

I.e. it just makes sense..... One can say, "Oh, I see this area.... the areas are clearly defined.... we have consolidation here.... we have a trend there... clearly there is Resistance here above!"

But there are times that things don't really make any sense. When I feel like the market is throwing too much information at me with regards to where one can expect price to react one way or the other.

Often times when this happens, I find myself having so many areas on my chart that it begins to resemble a tic chart, with something occuring at almost every price point, which then becomes cumbersome to me making a decision.

So I will usually delete all annotations and start over. This sometimes helps, other times not. I enjoy the idea of being able to almost fully plan what I will do the day prior once price gets to a certain place, and trying to trade according to what price does once it gets there.

I guess this is not a purely technical question that I am asking, as there is plenty of info in this particular section and many others. I don't know if it's just lack of experience, a physio-logical chemical brain fart of some sort due to lack of proper caloric intake for the day, or if there is really nothing there that is clear?

Like tonight here is what I am looking at, which might not be the best example? I usually have plenty of things to write on my charts, but tonight might be one of those 'brain fart' nights:

[DbPhoenix]

When one is trading S/R, he will most likely have to be satisfied with noting those levels where buyers stopped buying and sellers stopped selling. Of course one has to think about what he's doing and what he's looking at, but if he overthinks it and tries to figure out the why of buyers' and sellers' behavior, he will very likely find himself unable to act, for there are hundreds of thousands of reasons why traders choose to buy or sell at any given level. And, when it gets down to the trading decision, the why of other traders' decisions is not particularly relevant.

The trading ranges occur when price stops advancing and moves sideways. Sometimes these trading ranges last only long enough to provide S or R to subsequent movements, such as a retracement once price has begun advancing again. Sometimes they are far more substantial, and the more substantial they are, the stronger the S or R.

But you needn't go into the entire history of the S/R of whatever you're trading. All you need to look at are those levels which are most likely to affect your day's trading. Today, for example, since we are now at 61, the following levels are the more important.

This last "trading range" which began forming this week has been troublesome because it's not yet really a trading range but rather a series of higher highs followed by, yesterday, a lower high. If we move down rather than sideways, we'll have a "mountain" top. This has its own levels of potential S and R, as I've noted, but these aren't necessarily as strong as those provided by a more easily-defined, rectangular trading range.

The more emotional traders are, the less "pretty" the chart will look. If you understand this emotional component (such as that which we are now experiencing) and can trade it, that's fine. If you don't and can't, then best to let things settle into a "pattern" that you recognize -- e.g., a well-defined trading range -- and then resume trading.

[forrestang]

Thanks for the above! It's good to know that sometimes things just aren't clear.

With these current ranges or levels we're looking at now, would you consider either side of this current zone well defined? I'm just looking at the places in which price touches.

I'm sure you can find more on a different time frame, but when we don't have as many 'touches' of support, would you say that conditions aren't as clear to define S/R? And I really can't see any?

Maybe this chart illustrates what I'm asking? Prior to today's open there really seemed to be no place where price just respected too much. Are these levels here as they are the best that price has to offer as of right now?


For the novice, would it be best to just stand aside when S/R doesn't fall into place?

[firewalker]

Originally Posted by forrestang »

For the novice, would it be best to just stand aside when S/R doesn't fall into place?

I don't think it has much to do with being a novice. There are times that price is drawn to a particular S/R zone like a magnet, or that price bounces off such an area exactly where you anticipated it would happen.

But it's not because you have identifying S/R beforehand that price always sticks to exactly what you thought is S/R. If it doesn't act as S/R, you could say it isn't (or not anymore) or your interpretation wasn't correct.

When I face a situation when price chops around what I perceived as important S/R, (sometimes stopping me out on both sides), I try to stand aside and evaluate from a neutral point of view. Some people are better at reading the market in real time (than me) and when the pieces of the puzzle don't fall exactly into place, I become confused, make mistakes and lose money. It's not necessarily a bad thing: recognizing the condition under which you don't perform that well, is imo an important factor in trying to trade profitably.

One other option is to look elsewhere for a setup. For example, I had simular thoughts as yours with regards to identifying clear S/R on the NQ and reconciliating the overnight/premarket action with the intraday. However, I also track the ES and I noticed we had established a decent resistance area around 955-956 where price stopped each time the last couple of days; but each time setting a higher low (increasing the odds for a breakout). This isn't about the ES though. What I'm trying to say is that I found a more attractive pattern there, and left the NQ alone (at least for today )

[DbPhoenix]

Originally Posted by forrestang »

Thanks for the above! It's good to know that sometimes things just aren't clear.

With these current ranges or levels we're looking at now, would you consider either side of this current zone well defined? I'm just looking at the places in which price touches.

I'm sure you can find more on a different time frame, but when we don't have as many 'touches' of support, would you say that conditions aren't as clear to define S/R? And I really can't see any?

Maybe this chart illustrates what I'm asking? Prior to today's open there really seemed to be no place where price just respected too much. Are these levels here as they are the best that price has to offer as of right now?

For the novice, would it be best to just stand aside when S/R doesn't fall into place?

Last question first. Regardless of whether one is a novice or not, if whatever one is looking at is not clear, then, yes, he should stand aside until it becomes clear. Otherwise he's trading out of boredom, or because everybody else in the chat room appears to be trading (which is often a misperception), not according to any sort of well-thought-out -- much less consistently profitable -- strategy.

As for the range on which you're focusing, the limits are not defined by points but by levels. And while the levels are of course the result of points (i.e., those prices at which price reverses), it is the levels (the forest) which is more important.

As to whether or not it's well-defined, it is, at least as far as I'm concerned. Price has repeatedly found support at or about 55 and repeatedly found resistance at or about 66. However, it is not "filled", i.e., price does not regularly bounce back and forth between these two levels. If you "eyeball" it, you will see that there is more trading going on between 60 and 66 than there is between 60 and 55 (you've also noticed that 60 is the midpoint of this range). This means that there is more interest in the upper half of the range than in the bottom half. Does this mean that price is more likely to break out of this range to the upside than the downside? Some would say so, and since this is all hindsight by now, it would be easy to say oh yes of course it's going to breakout to the upside isn't it obvious? But there are no guarantees when it comes to whatever thousands of traders the world over are going to do at any given moment at any given price. The fact is that there are more trades in the upper half of the range than the lower. What one concludes from that is a judgement.

Whether or not these are the "best levels" that price has to offer as of right now, I wish you'd asked this question before the open. Since it's now all hindsight, the "oh yeah right" response is to be expected from some quarters. However, the process one goes through to evaluate the dependability of the S/R levels he located the night before is the same every day, and going into it in more detail may help you tomorrow morning, premarket.

You located your general area of interest, 55 to 66. But these are broad strokes, and it's up to the individual trader to fill in the blanks himself according to his style. For example, does the trader prefer reversals or breakouts? If he prefers breakouts, then breakouts from what? The high of the range? The high of the extreme, if there is one (in this case, there is: 71)? Does he prefer to buy the breakout itself, or wait for a retracement? If the latter, where does he enter the retracement? How wide a stop does he use? Is he trading trend or scalping? What's his target? And on and on.

But since you are interested in trading S/R and you're interested in how price "behaves" around these levels, I assume you're also interested in making more than a couple of points. So I'll make some assumptions regarding your objectives.

When you're getting ready for your trading day (which need not begin at 0930 NYT), you need to look at what price has been up to while you were asleep. Here you can see that price found its comfort zone between 60 and 64, and since you've already determined that 60 is the midpoint of your range and that more trades have occurred above 60 than below and that price is again bouncing between 60 and 64, this should elicit at least a Hmmm. Traders test the waters below 60 just before 0700, then above at 0730 and 0815, then test 58 again just after 0900.

But then price settles in between 59 and 60 and remains there until the open. This is your midpoint. Will price launch itself off of this level or will it drop through the floor?

And here's where you have to be sensitive to PA and forget about bars. Note that at the open, traders take price up to 61, but this immediately reverses and price drops. To what? 59. Again (if you're watching this in real time, you can see price moving and forming the bar; if you're not watching it in real time, you'll have to refer to a tick chart). At this point, one can place a sell order under 59 and a buy order above 60. If he were to do so, the sell order would never be triggered, but the buy order would, and since price never approaches 59 again, all he has to do thereafter is manage the trade.

As to your "Is this swing low contributing to support" question, what is it telling you? That traders looked for selling interest below and didn't find it. Instead they found buyers. That alone, in and of itself, is not extraordinarily important unless one is scalping. What is more important is that when this level is tested again just after the close, it holds, and it's never tested again.

[forrestang]

My thoughts for tommorrow.

[DbPhoenix]

Originally Posted by forrestang »

My thoughts for tommorrow.

I agree. Thanks for participating and for posting this in advance.