All you need is... a chart

[mp6140]

I agree with you 100 %, i believe in cycles, I believe in overbought/oversold, I believe mm and brokers watch vwap, ma's etc, just like in any market, so I believe in TA and it works alone for sure, you only got to watch oscar and his analysis to see that.

I remember grey1 once telling me that his broker has never in something like 15 years of working as a broker, had never seen not one single technical retail trader ever been very profitable, while the fundamentalists and fund managers had. This is the same attitude amongst some prop houses as i once had an interview with one and they kind of laughed at me when i told them how i trade and they also said that is classed as retail trading and we do not do that here as there is no real edge. I disagree with them and now trading from home myself but just find the different attitudes interesting.

===================================================================

because of, or in addition to - - - ill never be sure of which came first, technical analysis has become tremendously popular and definitley gives the market its profit points --- as im fond of saying THIS AINT YOUR FATHERS MARKET !!!!!!

RETAIL TRADERS on computers, have simply changed the whole landscape !

mp

 

[firewalker99]

The market will do what it has to do...

... regardless of the news.

People often look for the news to tell them what the market is going to do. Good earnings? Ah, market should go up, we buy! Bad news? Damn, let's dump this stock. Although we can never tell with 100% certainty what the initial reaction to the news will be, we can analyze the reaction of price towards technical levels, with complete disregard to what created or caused the move in the first place.

Those who follow stocks, will know that Cisco released it's Q3 report yesterday around the close of the markets. Let's have a look at what affect it had on the Nasdaq.

Price went straight up from 1995 to 2002.50 and went on to touch 2005, the upper line of a resistance zone from the 2nd of May. Price then reversed and came back to the level it was trading at before. So, what good does it by knowing the news? If anything, the public is sucked into longs but doesn't realize 'the technical picture' on the chart.

There are plenty of these examples each day. I'm not saying there is a news reversal all of the time. On the contrary, price often breaks through S/R on news, because that's the easiest way for the smart money to position themselves. The take advantage of what the public is doing and use the volume provided by weak hands to their advantage. Rule 5: the news is nothing more than an excuse.

 

[chump]

... regardless of the news.

People often look for the news to tell them what the market is going to do. Good earnings? Ah, market should go up, we buy! Bad news? Damn, let's dump this stock. Although we can never tell with 100% certainty what the initial reaction to the news will be, we can analyze the reaction of price towards technical levels, with complete disregard to what created or caused the move in the first place.

Those who follow stocks, will know that Cisco released it's Q3 report yesterday around the close of the markets. Let's have a look at what affect it had on the Nasdaq.

Price went straight up from 1995 to 2002.50 and went on to touch 2005, the upper line of a resistance zone from the 2nd of May. Price then reversed and came back to the level it was trading at before. So, what good does it by knowing the news? If anything, the public is sucked into longs but doesn't realize 'the technical picture' on the chart.

There are plenty of these examples each day. I'm not saying there is a news reversal all of the time. On the contrary, price often breaks through S/R on news, because that's the easiest way for the smart money to position themselves. The take advantage of what the public is doing and use the volume provided by weak hands to their advantage. Rule 5: the news is nothing more than an excuse.

lol...Have you taken off the gorilla suit and stopped beating your chest today
Ok, seriously re the "news" it's one more clue when price reacts to the news in the 'dog that didn't bark mode' in other words it's 'divergent' and out of synch with prior behaviour and maybe even wider media reporting and when this also lines up with what you call the "technical position" you have direction to trade.

 

[firewalker99]

... H1 for the DOW which "should" bounce here for the short term, but continue downside before EOD !
mp

There are exclusions, such as todays DOW which was a strong momentum day, starting later than usually, so one should be careful of doing a counter direction trade, except for very good short term flippers, as only one or two places will the currency alter its direction long enough to pass the 23% fib on a retrace, and thats VERY rare on day one !
mp

mp6140, let's not forget you called for a down day (see above), as did many others. It was indeed a very strong momentum day, price set higher highs and higher lows and there just was no reason to short along the way.

the ONE PIECE OF LOVING ADVICE I SHALL GIVE TO ALL, taken from deep within the coffer, because everyone here is SO SWELL is to BUY (or sell) at a few minutes after 10AM EDT and HOLD to 2PM EDT, where you close the trade --- you can hold that as a "core" trade and also trade the reversals, such as we see now ! ----- once again, since news did not come out at 8:30 am edt, one holds to 3:30PM EDT and then covers --- check out a chart and see if it workds for you

I haven't seen proof that there is a specific time window in which reversal are more likely to occur, but I haven't studied this to the extent that I can fully deny the possibility. So, in contrary to people who automatically assume this or that can't work because they failed to make it work, I'm going to keep an open mind on this matter.

i'll never be sure of which came first, technical analysis has become tremendously popular and definitley gives the market its profit points --- as i'm fond of saying THIS AINT YOUR FATHERS MARKET

This thread may be a better place to discuss whether or not the markets change over time:
Permanent edge

 

[firewalker99]

lol...Have you taken off the gorilla suit and stopped beating your chest today

Not really, otherwise I wouldn't say that I posted a long from 12980 on the futures, 40 minutes ago, in the real live trading thread, based on nothing but a pure technical reason. Meanwhile price is at 13010. Notice how all the news (retail sales Europe, manufacturing production UK) this morning was bad once more. I say again: close your eyes to the news, be aware of when important figures are released but focus on the technical reaction, not whatever the news is. The news itself is irrelevant to anyone who wants to become a profitable trader. I could go on and on with examples, but the sky is not less blue because a blind man does not see it.

Ok, seriously re the "news" it's one more clue when price reacts to the news in the 'dog that didn't bark mode' in other words it's 'divergent' and out of synch with prior behaviour and maybe even wider media reporting and when this also lines up with what you call the "technical position" you have direction to trade.

"one more clue", "also lines up"... you don't need any extra clues. It's all in the chart. If the sun is shining, it's hot as hell (35° Celsius) and everyone is off to the beach, are you going to wait for the weathercaster to tell you it's summertime?

 

[chump]

Not really, otherwise I wouldn't say that I posted a long from 12980 on the futures, 40 minutes ago, in the real live trading thread, based on nothing but a pure technical reason. Meanwhile price is at 13010. Notice how all the news (retail sales Europe, manufacturing production UK) this morning was bad once more. I say again: close your eyes to the news, be aware of when important figures are released but focus on the technical reaction, not whatever the news is. The news itself is irrelevant to anyone who wants to become a profitable trader. I could go on and on with examples, but the sky is not less blue because a blind man does not see it.



"one more clue", "also lines up"... you don't need any extra clues. It's all in the chart. If the sun is shining, it's hot as hell (35° Celsius) and everyone is off to the beach, are you going to wait for the weathercaster to tell you it's summertime?

well actually FW if you track back on the volumes you will find that many people have done exactly that and by the look of it still are ..it's called disbelief ..the news is often irrlevant in it's content sense ,but my comment CLEARLY was that the reaction to it was very informative...which is why unlike our resident maestro MP I don't forecast down ,but remain long and take it as a positive when the market can trade down for profit takers and then trade back up finishing strongly.

 

[Splitlink]

The markets UP and, right now, is deciding whether to go higher, or not. I just closed out at 1100. Whether that was correct, or nor, I don't know, but I think that we are into one of those congestion areas for a while.

Nice thread. Thanks

By "for a while" I mean until the Dow opens, maybe?

Split

 

[firewalker99]

It is practically impossible for any man or organization to absorb, analyze and digest the many so-called fundamental factors which influence the course of the stock market, and deduce therefrom a conclusion from which the course of prices may be predicted with any fair percentage of success; what is more, it is a fallacy to believe this can be done on that basis. All the elements which have gone to produce the lines on the fundamental charts have already been discounted in the market. - R.W.

 

[mp6140]

MP -- so it was a little mistake, but turned out right

since i dont trade indicis, yesterday my 240 min charts found the support area and showed a rise and then a reversal ---- while i was very correct, i was also a day ahead of myself using that long a time frame.

so now we see the downside move, heading back to the bottom LRC and if things go as planned, at noon EDT here in the states we should hit the bottom for the DJI.

at that point i simply set back, have a bowl of balkan saseini and check to see if we continue down. No matter what happens, the "pipe time" is great

not crazy about the way the DJI trades, but set my trades last nite and they came home to roost. Still, its a break from forex and commodities and predictable as can be, so thanks for bringing it to my attention !

on the 240 min charts, which ARE a bit long winded for this, we have hit the top LRC, then bounced to the bottom LRC, stalled at the half way mark to the upside, but general rules say long to the 13132.30 presently --- PLEASE REMEMBER that is a longer term position outlook and not one for those fast moving young lions !

trading is simply A BALL !

mp

 

[wasp]

I never,ever pay any attention to the news whatsover. Be it 9/11 or NFP. I have no news feed and I read (books not newspapers etc) whilst trading. The news may help move the markets but do you need to know what, why, when etc...... NO.

Even afterwards I have looked back to where news cam out and see it would not have helped knowing.

(Sorry FW, would have posted sooner but your thread keeps getting lost in the new posts whilst mine stays on top! :cheesy)

 

[mp6140]

mp6140, let's not forget you called for a down day (see above), as did many others. It was indeed a very strong momentum day, price set higher highs and higher lows and there just was no reason to short along the way.

you missed what was said and then you missed my apology for using the 240 min chart on an index as my charts are set for forex --- kindly note by the end of a 24 hour "forex" day, it was moving on down smartly ! --- as can be seen by my chart, it hit rock solid support, and thats simply that !

I haven't seen proof that there is a specific time window in which reversal are more likely to occur, but I haven't studied this to the extent that I can fully deny the possibility. So, in contrary to people who automatically assume this or that can't work because they failed to make it work, I'm going to keep an open mind on this matter.

you sure are a hard butted guy, arent you --- If you havent seen them then its either because you are not capable, or you simply dont want to ----- WATCH and log the times the market reverses, ESPECIALLY the really big reverse just before the rollover ! (i think i have 15 posts on that one) so PLEASE dont start a new topic about trading times without crediting me, ok ? I thought this was a nice little site to hang out at, but i find the "guru's" here to be SO unreceptive to new ideas and not just a little prone to simply ignoring what those with experience have to say !

 

[firewalker99]

Djeez mp... this is the third time you're going off in another direction. I've asked it politely and I'm asking you again, one last time, please stop derailing this thread. You can voice whatever issues you have here: All you need... Further Tales.

 

[firewalker99]

Now, if we can finally continue where we left of.

Let's talk a bit more about the economists and market analysts. We must wonder and ask ourselves to what purpose they study each and every bit of news, ranging from corporate reports to economic indicators, world politics, the relationship between commodities and stock prices, and so on. They believe that the data they get will help them decide what stock to buy and what the market is about to do. Most of them believe the market will, or at least should, react positively to good news and negatively to bad news.

The task of reporters is to write stories and fill the financial sections of the newspaper. It's definitely worth observing some of these people for some time. How many times have you heard "the stock went up despite the bad news, but there was some other good news from before..."; "the stock went down, perhaps the bad news of last week wasn't fully digested into the price yet". I'm sure you could find examples of these each day.

We can hardly blame them for doing their job. After all, it would make for a very short column if all they wrote was "the market went up because buying pressure overcame selling pressure"...

 

[barjon]

ok, can I bring the personal battle to a halt please. I will delete anything further personal and not about the topic of the thread. However, I allow myself the luxury of the last word

mp6140 - I don't think you can claim ownership of any of the concepts - s/r, trend lines, channels, reversal time zones, all news in price, etc, etc - that you have brought up. As Wasp says, it's all in the archives. You may or may not have a novel (indeed, original) way of bringing those concepts together to trade, but that's a different matter.

firewalker - I think you've got a pretty broad canvass as your headlined topic and I think it's reasonable that people can take it in different directions, so long as there is a relevance to the topic.

cheers

jon

 

[firewalker99]

News-related trading

The problem with news-related trading is that most traders focus on picking trades around these releases because they believe the sudden increase in volatility gives them a better chance of making a quick buck. Unfortunately, they often fail to realize the risk that goes along with it. Too many traders see a sudden burst in price and think "this is it", and they jump in.

Rule 6: The patient trader waits and watches how price reacts, and looks to fade the news. This is not to say that fading the news is a profitable strategy in each occasion. One must look to what price is doing with regard to important technical levels, like support and resistance.

Most of the news has already been factored into the current price of the market. This means that once the news confirms what the market was expecting, the whole anticipation is gone and people take their profits and walk away, thus sending the market lower.

There's one very important observation to be made here. Rule 7: If the market should go lower (very bad news), but it doesn't, it signals important strength. The news in itself doesn't matter, but it's the aggregate position of traders before the news. Experienced traders wait to see what the news tells them before acting.

Often a market will run up minutes or hours before a report, if they are expecting good news. That's why by the time the report is released, price can often fall out of nowhere. This is especially the case when the news confirms what is expected or the numbers are the same as forecasted.

(main sources: Marcel Link, Justin Mamis, John Magee, and my own personal experiences)

 

[firewalker99]

The market will do what it wants to do (Marcel Link)

"Many times unexpected news may come out that is the opposite of what the market has been doing. Initially the response is rapid, hard move the other way, but once traders take a deep breath and reevaluate, the market normally will continue in its set trend. I can't count how many times a downtrending stock reports better than expected earnings, has a quick bounce, and then spirals back downward.

The news isn't important here; it is more important to see how the market reacts to it after the initial move. Fundamentals should be believed only as long as the technical signals agree. Too many times a trader will stick with a news story and not let go no matter what the market ends up doing. Opinions mean nothing to the market; the market goes where it wants to, not where you think it should go. [Rule 8:] If the market shakes off news and continues its trend, a trader should ignore the news and follow the market."

 

[mp6140]

hey fireguy

while certainly not in full agreement with your quoted sources, my explanation of how this all works is someplace and since i didnt make a copy, id have to search and since i dont want to search, i probably wont but very honestly, since you opened this thread with how one could TELL where the price should go before news is released, which we all know im in total agreement with, now it sounds like youre wavering ---- to my way of thinking, which i hold thru a lot of good trades, only completely unexpected news will make a surprise move, and that news, based on the normal what goes up must come down realities of the market, would only move your account temporarilly ---- heck, if everything moved up like an express train one minute, you could do worse than set a short almost anywhere --- especially with GU, take a look at intraday grand scale moves --- if its up, then very shortly later, down it comes, right back to where it started ---- the market likes its TREND, and ALWAYS wants to return there, short of nuclear war (doubt well have another market crash, as too many safeguards are in place now!)

BUT

when we first entered into our "dance of love" i stated that the DOW had reached a support, but that my charts were telling me there was more downside, which in due course (one day after the upside move) has come to pass as predicted --- ive shown enough charts of the daily progress to prove historical point, so i add this latest one just to add veracity. (actually for another reason, but what the heck !)

trading naked on price movement is a nice thing --- sort of a "purist" methodology, but it cant tell you whats coming up or expected to be coming up on down the road the way the LRC and some intelligent forecasting indicators can which is why those squiggles live on my charts --- i have a clean set of charts to trade off of and use the squiggles for research, but im used to the lines and rarely do the "purist" routine.

anyway, with "squiggles" removed, the latest DOW chart confirming my very first words on this thread (the ones youve made so much fun of lately --- aint payback a bitch ?)

Im sorry for attaching one panel of a 7 panel indicator readout, but its only to show that shorts do not live by price action alone ---- there are lines that tell you, A LONG TIME BEFORE, what is to be expected and therefore what one can bank on, which i have done with much fun while listening to the many guru's spouting this and that.

please notice the action of the DOW within its LRC bands --- not bad for something that doesnt exist ?

"they have eyes, but they do not see !"

enjoy

mp

 

[jayjay121]

hey fireguy

while certainly not in full agreement with your quoted sources, my explanation of how this all works is someplace and since i didnt make a copy, id have to search and since i dont want to search, i probably wont but very honestly, since you opened this thread with how one could TELL where the price should go before news is released, which we all know im in total agreement with, now it sounds like youre wavering ---- to my way of thinking, which i hold thru a lot of good trades, only completely unexpected news will make a surprise move, and that news, based on the normal what goes up must come down realities of the market, would only move your account temporarilly ---- heck, if everything moved up like an express train one minute, you could do worse than set a short almost anywhere --- especially with GU, take a look at intraday grand scale moves --- if its up, then very shortly later, down it comes, right back to where it started ---- the market likes its TREND, and ALWAYS wants to return there, short of nuclear war (doubt well have another market crash, as too many safeguards are in place now!)

BUT

when we first entered into our "dance of love" i stated that the DOW had reached a support, but that my charts were telling me there was more downside, which in due course (one day after the upside move) has come to pass as predicted --- ive shown enough charts of the daily progress to prove historical point, so i add this latest one just to add veracity. (actually for another reason, but what the heck !)

trading naked on price movement is a nice thing --- sort of a "purist" methodology, but it cant tell you whats coming up or expected to be coming up on down the road the way the LRC and some intelligent forecasting indicators can which is why those squiggles live on my charts --- i have a clean set of charts to trade off of and use the squiggles for research, but im used to the lines and rarely do the "purist" routine.

anyway, with "squiggles" removed, the latest DOW chart confirming my very first words on this thread (the ones youve made so much fun of lately --- aint payback a bitch ?)

Im sorry for attaching one panel of a 7 panel indicator readout, but its only to show that shorts do not live by price action alone ---- there are lines that tell you, A LONG TIME BEFORE, what is to be expected and therefore what one can bank on, which i have done with much fun while listening to the many guru's spouting this and that.

please notice the action of the DOW within its LRC bands --- not bad for something that doesnt exist ?

"they have eyes, but they do not see !"

enjoy

mp

hi mp, your chart looks so cluttered, how the hell do you make sense of it, don't you think it's best to keep things simple including your chart?

 

[firewalker99]

hey fireguy

please notice the action of the DOW within its LRC bands --- not bad for something that doesnt exist ?

mp

mp, I never said they didn't exist. Read again over what I said. I said the purpose of these lines (at least mine) is to show trend, direction, momentum, not to show that price reacts because the trader has a line drawn somewhere on his chart. I believe you even agreed to this in your own thread and you said yourself you used S/R to determine exit entry & exit. So before we go off in yet another entanglement, think again about your posts and mine, and I think you'll find those are in agreement.

I also said that if you draw enough lines on your chart, some are bound to cross with price, but whether this is because price reacts to to the line or because a line by definition only exists when two points are connected, is a different matter.

You are welcome to prove your point about your lines working or not working, but for the time being these are hindsight comments. I'm sure you are a very helpful tool in determining when to put a trade on, but it doesn't serve the purpose of this thread to explain in hindsight that they worked. Even in your own thread several people have now asked you to put forward to examples beforehand. The market only opens the day after tomorrow, so you plenty of time to do that.

You don't need to know what's going to happen next, to make money out of the market. And trust me, I've seen enough people being very able to 'predict' the next move, but unable to actually make a profit out of it.

 

[firewalker99]

hey fireguy

while certainly not in full agreement with your quoted sources, my explanation of how this all works is someplace and since i didnt make a copy, id have to search and since i dont want to search, i probably wont but very honestly, since you opened this thread with how one could TELL where the price should go before news is released, which we all know im in total agreement with, now it sounds like youre wavering ---- to my way of thinking, which i hold thru a lot of good trades, only completely unexpected news will make a surprise move, and that news,

No... you are making the wrong assumption. I did not open this thread to proof that you could tell where price should go before news is released. In fact, I said there's always the chance that something unexpected could happen, that's why you need to trade with stops (or at least a mental stop).

First you said I was copying you, now you're in disagreement about certain aspects. Which it good, I'm glad you say so, because it shows that I wasn't copying you and I came to my own conclusions based on several other aspects. And in fact, I don't believe in predicting the news, I believe in price discounting the news sooner or later, which is not the same.

Nowhere in this thread did I say that you can predict the initial reaction to the news, I said the chart tells the whole story and whatever news is released, it will not change what the market wants to do. The news is often used as an excuse to trick traders into taking positions.

Every reaction to the news is unpredictable, price can rise on bad news and go down on good news, depending on context, market cycle, technical position, etc, etc. I said you didn't need to know the news nor pay any attention to it, to be a profitable technical trader. I didn't say that you could predict anything, I never did...

Obviously you can assess the probabilities of one thing happening over another, and you might be able to tell what's going to happen next with a high degree of certainty, but no, never 100%.