chump said:
What do I know?
and
What do I do about it?
Indeed , what do I know that is free from all the potential bias screwups, both those that I bring with me and those that are delivered upon me by noise.
Indeed , what do I do about it that can be free from all those sweaty little emotional moments and impulses.
Knowledge and action free from destructive bias and emotion takes some time to achieve, but how do we start to achieve that state.
For a start we can stop 'believing' that the ability to make money in the market has anything to with the 'purity' of the comfort blanket being used (FA ,TA or any combination thereof). The best of all of the latter that actually do make money do so only because of that wonderful combination of strategic thinking and action polished from experience. It ain't the tool , it's the hand upon the tool (with all due deference to whomever is that spectacularly endowed member
)
So we get our focus off the er tool and onto the question of making money which happens very nicely if we can make profit from other people lo(o)sing money.
Therefore our questions are ; what has been happening to price in this market , where do we find the effects of supply and demand ? What is happening to price right now ? and the bit I like inparticular ..what must happen to price from here (not 'will happen') ..only what must happen to price from here to create a specific situation that I can recognise without hesitation. A place that delivers knowing ...a knowing of quick ,cheap strategic failure , or conversely results in the opposite side of the market recognising that they are in the wrong position and being forced to react to that delivering the immediate strategic advantage which can be managed to a conclusive positive outcome. ...it's chess for money .
Damn, chump, you're turning serious on us here.
I think you've read enough -- if not all -- of what I've written regarding S&D, so I won't get into that again (anyone else who's interested can do a search). But if you mean "effects" literally, then you look for breaches of either S or R within whatever interval you're trading.
For example, using the NQ, over the macro, we're still in an uptrend. We haven't even come close to testing it. So, if you want a bias, it's up.
Over the nearer term, however, we've been in a consolidation for the past couple of weeks, bouncing up and down between S & R. If one is trading trend over the longer-term, he has nothing to do but sit on his hands until we break out or break down.
On the other hand, if he chooses to trade the shorter-term, he can buy S and sell R. If he wants to trade intraday, then he has even more opportunities, but he first has to locate S&R within his "trading environment" and trade off that, e.g., short failures to break through R and buy failures to break through S.
But I think you know all this. To understand that price rises because demand -- or buying interest -- is greater than "supply" -- or selling interest -- is a no-brainer. The trick is to recognize these changes in balance or equilibrium in real time, then act on what one observes. As I've posted ad nauseum, this entails locating those areas or zones in which this balance is most likely to change, then waiting patiently until the events one is looking for actually occur (sometimes they don't, i.e., we were wrong in our conclusions regarding S and/or R).
Locating these areas can't be done by the numbers, but neither does it rely on "ethereal knowing". If one has any appreciation for fear, hope, and greed, he can come within at least the neighborhood of the correct zone.
Take this morning, for example. We had already breached R at 1785. Therefore, one had a choice of buying the first retracement (which occurred right after the open) or doing nothing and waiting to see if price failed to breach the next R level, in which case he could short it. However, if it did breach R, then he'd be faced with either buying the BO or waiting for the next retracement. Problem is that in a strong move, there might not be a retracement and there he sits.
Therefore, you've got at least four choices, and the "correct" choice depends in large part on your "style", i.e., how much testing you've done of this particular setup, how familiar you are with trader psychology with regard to buying and selling pressures and how traders behave when they are fearful, anxious, greedy, hopeful, etc., how much you're willing to risk, whether you play all or none or scale in and out, how tight your stops -- if any -- are, and so on. If you can set hope and fear aside, you'll note that the trend is up on every interval and the only reason not to take the retracement is fear that price won't break through upcoming R. A more rational approach is to take the trade and watch for the signs that price
won't break through R. If you see them, you know what you'll do as a result of the preplanning you did before the open. If they don't occur, you have nothing to do but manage a profitable trade.
Of course, if your post wasn't serious after all, just ignore all of the above.
Db
