[LeeRain]

Thanks

[DbPhoenix]

I posted these in the Cajas thread, but I've been gone so long I'd forgotten that the Cajas thread, which explains what the boxes are all about, precedes this one. So here they are again, where they're supposed to be. The first one includes Nemesis' suggestion re the oldest box in the chart, from 2010.

Where We Are

[gaelgss]

I

Originally Posted by DbPhoenix »

Hello Db,

In this chart you have identified 3 "cajas famosas".

Which of these levels would you identify as S/R for the next trading day?

Presumably you don't take the top/bottom and midpoint of each range as S/R as there would be way to many lines on the chart right?

[DbPhoenix]

Originally Posted by gaelgss »

I

Hello Db,

In this chart you have identified 3 "cajas famosas".

Which of these levels would you identify as S/R for the next trading day?

Presumably you don't take the top/bottom and midpoint of each range as S/R as there would be way to many lines on the chart right?

I moved your post here since my post should have been here in the first place, as I explained above.

As for your question, the point of this thread is to trade "in foresight", i.e., use this display to create a trading plan for the following session. Since your question has been answered many times in this thread with many examples, I'm afraid you're just going to have to read it.

Sorry

Once you have your plan together, however, if you have a question that hasn't been asked already, feel free to post it.

Db

[gaelgss]

Originally Posted by DbPhoenix »

I moved your post here since my post should have been here in the first place, as I explained above.

As for your question, the point of this thread is to trade "in foresight", i.e., use this display to create a trading plan for the following session. Since your question has been answered many times in this thread with many examples, I'm afraid you're just going to have to read it.

Sorry

Once you have your plan together, however, if you have a question that hasn't been asked already, feel free to post it.

Db

I have read this thread entirely and I believe your answer to this has been. " You should only plot the S/R lines that are more likely to affect current price action, these are the lines that are closer to the current price"

I have added S/R lines to your chart, assuming the market opens close to the 2741. I would appreciate some feedback regarding my lines, are they enough or to many? Are they drawn in the correct area? (I am aware that this is not a pin pointing exercise)

Blue lines are support and red lines are resistance.

Cheers.

Edit= Do you consider 2650 as support simply because it acted as resistance on the 29th feb and on the 9th of March and resistance becomes support or other other reasons?

[DbPhoenix]

Originally Posted by gaelgss »

I have read this thread entirely and I believe your answer to this has been. " You should only plot the S/R lines that are more likely to affect current price action, these are the lines that are closer to the current price"

I have added S/R lines to your chart, assuming the market opens close to the 2741. I would appreciate some feedback regarding my lines, are they enough or to many? Are they drawn in the correct area? (I am aware that this is not a pint pointing exercise)

Blue lines are support and red lines are resistance.

Cheers.

I'm glad you've read it at least once, but you will likely find that once is not enough.

Be that as it may, whether there are enough or too many will only become clear in hindsight, which is what one gets from vendors, and most message board inhabitants. But you don't have the luxury of hindsight; you have to decide ahead of time what you're going to do, when you're going to do it, how you're going to do it.

Your lines are as correct as they need to be. The challenge is all the contingencies you're going to have to plan for trading in this zone, surrounded by all these ranges ("boxes"), i.e., what do I do if and when price does such and such. Perhaps the best exercise you can engage in now is to think about and list all those possible contingencies. If you're thorough, the market won't be able to surprise you. Those who are reading this should help you, as it wouldn't hurt them to go through the same exercise.

This subject of planning and contingencies came up elsewhere yesterday or day before. I posted this. It may be helpful.

Possibility Mapping

Traders often hear about the potential benefits of preparing actionable trade plans prior to the next trading day. The goal of such preparation is to make yourself immune to mental edge breakdown. One of the greatest threats to your mental edge is coming across something that's unexpected during the trading day. Seeing an unexpected price move (especially one you perceive to be a big move) is likely to stress and panic you and therefore cause your psychology to shift into an emotional, reactive state. An effective way to prevent this is to prepare with possibility mapping.

Possibility mapping is a process which will mentally prepare you to expect the potentially unexpected, and therefore will allow you to numb, in advance, any potential emotional responses.

There are two major types of possibility mapping: Exact possibility mapping, which you would use if you tend to make your trade decisions the day before; and Price Pattern possibility mapping, which you would use if you tend to make your trade decisions while you watch price patterns forming.

With exact possibility mapping, you first identify a trade you might make. You would then write out all possible scenarios of price activity following your entry. Yes, there are more scenarios than you could possibly define. However, you'll be able to identify major groups of scenarios where each of the scenarios in a given group would ultimately result in the same signal. These groups are limited and can easily be defined. Then, in your objective state of mind, you decide how you would react in each case.

On the other hand, with pattern possibility mapping, you would define the several possible groups of general, overview patterns you might see and decide what actions you would take in each case. Over time, you'll find yourself mapping possibilities faster and more accurately. You can also prepare further by defining what you might think the chances are of each scenario actually occurring.

With such preparation, you've already "experienced" tomorrow's markets. Therefore, you virtually eliminate the chance of mental edge breakdown due to unexpected scenarios. Possibility mapping can also drastically improve the quality of your trade decisions and your recognition of certain patterns. In addition, reviewing and comparing your possibility mapping records with your trade diary will help you find key patterns in your trading, identify areas in which you might have a lack of preparation and ones in which you have strengths.

--Innerworth

[DbPhoenix]

Originally Posted by gaelgss »

Edit= Do you consider 2650 as support simply because it acted as resistance on the 29th feb and on the 9th of March and resistance becomes support or other other reasons?

You posted just before I replied. There's no reason to believe that 2650 won't act as support if price drops down that far, and there's no reason to believe that price won't. I'm not of the "gaps are always filled" school, but there is a gap, and whether it's filled or not, you should take note of it and plan for it.

Db

[gaelgss]

Thanks DB, I dont feel confident enough to do this but lets give it a go...

From the macro, I ha plotted the S/R lines on a 60 minute chart. Since the trend is obviously upwards, I would be looking at going long at a test of support or a a breakout of Resistance that turns into support.

In the following 60 min chart, I would be looking at:

1- Going long at support around the 2725 area

2- Going long on a breakout and test of the 2750 area

I would consider the Resistance line at 2775 a potential target, in the charts the green eplipses represent Long entries.

I look forward to reading other peoples views on this as I am pretty sure mine are very poor...