InDisguise
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Excellent thread Chartman!!
If you take a look at 15 min chart over past month, looks like a 'Rising Wedge' formed between 25/2 and 3/3 and if my calculations are right (rarely happens!) we are close the the target of this pattern (7420) on the Dow
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ID
Wow........right for a change!.........didn't trade it though, d'oh!
If you take a look at 15 min chart over past month, looks like a 'Rising Wedge' formed between 25/2 and 3/3 and if my calculations are right (rarely happens!) we are close the the target of this pattern (7420) on the Dow
.ID
Wow........right for a change!.........didn't trade it though, d'oh!
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#!!!***%%I've just lost 3 hours of typing, so no commentary tonight. suffice to say we made 160 points today. You should be able to figure out the COVER and the long entry and why we held to the close for 50 and 110. Really sorry chaps
maybe I'll get time tomorrow to re- do it. It 'll be worth it as there was a lot interesting points. I wrote about R/R, support /resistance trend lines, magic numbers, targets, Divergences and move "strengths".
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ChartMan,
Sorry to hear about the 3 hours of lost commentary.
Just to let you know, your efforts are most appreciated !
------------------------
ed, me thinks you'll find the charting software is Sierra (www.sierrachart.com)
Sorry to hear about the 3 hours of lost commentary.
Just to let you know, your efforts are most appreciated !
------------------------
ed, me thinks you'll find the charting software is Sierra (www.sierrachart.com)
Sorry , no time to do anything about the lost commentary.
looks a long at 7620 though.....
Tonight I'll do the write up in Word with autosave then paste it
OK a quick recap last nights action.
Positive divergence set in from 17:00 to 18:30, indicating a bottom. Note the triangle formation on RSI and the fact that it broke out before the price..... (marked as ****** on the chart).Note also the divergence in CCI from 18:28 to 18:41. More confirmation of a bottom. Thirdly, the price action stayed parallel to the 100MA and very close to it.So we cover at 7430 or thereabouts. Now we look for a long entry. That wasn¡¦t long in coming. A break through the 100MA and three pullbacks all in quick succession.HOW MANY DO YOU WANT?
Long at 7440.
Then a rise up to 7470 and a drop down to the 100MA. Do we sell? No way. We end up at 100MA -13. And off up again.
Here's one of my top tips for measuring the strength of a move with RSI. Take the move in RSI in this case, from 72 to 32- 40 points. Take the points move in the DOW. In this case it was from 7470 to 7435- 35 points. IF you get 1:1 correlation, the move is WEAK. IF you get : 1.5: 1 the move is STRONG. So a 40 point move in RSI should give a point move in the dow of >60 points for a strong move. Strong moves don¡¦t go pear shaped if you are on the right side of the trade.
Next point. E now have two highs across which we can draw a trend line. THIS IS IMPORTANT! You will see why later.
The move now turns round (19:30) and heads off up.Guess where we get a pullback? Right on the trend line we just drew. Then we break through that line and the line now switches from resistance to SUPPORT. WE want to test this support later to confirm this new up trend.
The move carries on and we see divergence at a top across 10 minutes. Do we sell? Only if you are stricken with fear. We want to see 3 peaks across 25 minutes to have a CONFIRMED 3 peak negative Divergent Top. This is NOT the case. Homework: What is the points rise per RSI for this move? Is it strong? ( answer 1:75 or so, and is strong). Another reason NOT to exit the trade.
Now we drop to guess where¡K Support trend line. How convenient. Notice also It¡¦s bang on the 100MA. Check AGAIN the strength of the move- we want weakness. RSI 80-32 = 48, points drop = 40 (7522-7480 roughly) The move is WEAK. Just what we want. Confirmations all the way. So we HOLD. Trend line and 100MA junctions are very strong.
The move progresses and we see an Inverse H&S developing. A quick calc. gives a target of 7508. ( the low to the trend line, + the trend line). This means if the move is to continue, we should reach 7508, which we did. Failure to do so means the move is likely to fail at this point. It¡¦s not common to see these mid move, they are more common as TRUE bottoms and the right shoulder invariably bounces on the 100MA giving a great long entry.
Close the long 1 min before the session ends and we have netted 50 +110. Not the best, but SAFE, EASY money.
More homework . Print out the chart and see how relevant the numbers 32 and 64 are i.e 7432, 7464,7532
These "magic" numbers are regular bounce points.....
Well I just managed to scramble some time to do this. Last night¡¦s text was real time tracking and great fun but hopefully I have covered the main points here. The long today from 7620 is looking good......
17:30, topped at 7700 and looking like it will pull back to7664. Let's see.....
looks a long at 7620 though.....
Tonight I'll do the write up in Word with autosave then paste it
OK a quick recap last nights action.
Positive divergence set in from 17:00 to 18:30, indicating a bottom. Note the triangle formation on RSI and the fact that it broke out before the price..... (marked as ****** on the chart).Note also the divergence in CCI from 18:28 to 18:41. More confirmation of a bottom. Thirdly, the price action stayed parallel to the 100MA and very close to it.So we cover at 7430 or thereabouts. Now we look for a long entry. That wasn¡¦t long in coming. A break through the 100MA and three pullbacks all in quick succession.HOW MANY DO YOU WANT?
Long at 7440.
Then a rise up to 7470 and a drop down to the 100MA. Do we sell? No way. We end up at 100MA -13. And off up again.
Here's one of my top tips for measuring the strength of a move with RSI. Take the move in RSI in this case, from 72 to 32- 40 points. Take the points move in the DOW. In this case it was from 7470 to 7435- 35 points. IF you get 1:1 correlation, the move is WEAK. IF you get : 1.5: 1 the move is STRONG. So a 40 point move in RSI should give a point move in the dow of >60 points for a strong move. Strong moves don¡¦t go pear shaped if you are on the right side of the trade.
Next point. E now have two highs across which we can draw a trend line. THIS IS IMPORTANT! You will see why later.
The move now turns round (19:30) and heads off up.Guess where we get a pullback? Right on the trend line we just drew. Then we break through that line and the line now switches from resistance to SUPPORT. WE want to test this support later to confirm this new up trend.
The move carries on and we see divergence at a top across 10 minutes. Do we sell? Only if you are stricken with fear.
We want to see 3 peaks across 25 minutes to have a CONFIRMED 3 peak negative Divergent Top. This is NOT the case. Homework: What is the points rise per RSI for this move? Is it strong? ( answer 1:75 or so, and is strong). Another reason NOT to exit the trade. Now we drop to guess where¡K Support trend line. How convenient. Notice also It¡¦s bang on the 100MA. Check AGAIN the strength of the move- we want weakness. RSI 80-32 = 48, points drop = 40 (7522-7480 roughly) The move is WEAK. Just what we want. Confirmations all the way. So we HOLD. Trend line and 100MA junctions are very strong.
The move progresses and we see an Inverse H&S developing. A quick calc. gives a target of 7508. ( the low to the trend line, + the trend line). This means if the move is to continue, we should reach 7508, which we did. Failure to do so means the move is likely to fail at this point. It¡¦s not common to see these mid move, they are more common as TRUE bottoms and the right shoulder invariably bounces on the 100MA giving a great long entry.
Close the long 1 min before the session ends and we have netted 50 +110. Not the best, but SAFE, EASY money.
More homework . Print out the chart and see how relevant the numbers 32 and 64 are i.e 7432, 7464,7532
These "magic" numbers are regular bounce points.....
Well I just managed to scramble some time to do this. Last night¡¦s text was real time tracking and great fun but hopefully I have covered the main points here. The long today from 7620 is looking good......
17:30, topped at 7700 and looking like it will pull back to7664. Let's see.....
19:16. The pullback didn't go as far as I thought, stopping spot on the 100MA again, and the new uptrend support line junction.
Note the double bottom and mini divergence at 7617 that is just below the 100MA.
The bull flag target from here was 7693, and that was met and passed, leading to the double top at 7700. Look at RSI here. 81. It just can't go higher, really, that's why I called it topped out earlier. Nothing can go up forever without a pullback. You just have to differentiate between a pullback ( weak) and a drop from the top(strong). Calculating the points per RSI will help you.This pullback dropped 30 points for a drop of 45 in RSI- <1:1.
This next move up is 72 points for a 50 point move in RSI- 1.5:1 so it's strong.
The drop to 50 on RSI has hardly moved the price at all- 15 points.
At this point we are 125 points up, and should start looking for an exit. Each time the price moves away from the 100MA, the magnetic draw of the 100MA will attract it back.
Another important clue. Look at CCI. See where it drops to -200? This is well lagging and occurs right at the end of the price drop. In a down move, as opposed to a pullback, one would normally be looking to short as CCI crosses down through zero. By this time RSI has already completed most of it's down move from 80 to 50. If this was a tank, we'd see a 50 + point move down in the price.We barely had 20.
The pullback at 19:11 made CCI head for zero and bounce back up. More confirmation of strength.
19:30. 7762 and +140 to the good and looking like we can relax for the next push up. With this strength, we may get a perfect top this evening, with a 3 peak divergence. This won't be difficult, given the high peaks in the RSI.
Earlier today I was asked " where now".... I replied that this move has +240 within it's grasp. I think the response was generally you're taking the ****
We're at +210
Note the double bottom and mini divergence at 7617 that is just below the 100MA.
The bull flag target from here was 7693, and that was met and passed, leading to the double top at 7700. Look at RSI here. 81. It just can't go higher, really, that's why I called it topped out earlier. Nothing can go up forever without a pullback. You just have to differentiate between a pullback ( weak) and a drop from the top(strong). Calculating the points per RSI will help you.This pullback dropped 30 points for a drop of 45 in RSI- <1:1.
This next move up is 72 points for a 50 point move in RSI- 1.5:1 so it's strong.
The drop to 50 on RSI has hardly moved the price at all- 15 points.
At this point we are 125 points up, and should start looking for an exit. Each time the price moves away from the 100MA, the magnetic draw of the 100MA will attract it back.
Another important clue. Look at CCI. See where it drops to -200? This is well lagging and occurs right at the end of the price drop. In a down move, as opposed to a pullback, one would normally be looking to short as CCI crosses down through zero. By this time RSI has already completed most of it's down move from 80 to 50. If this was a tank, we'd see a 50 + point move down in the price.We barely had 20.
The pullback at 19:11 made CCI head for zero and bounce back up. More confirmation of strength.
19:30. 7762 and +140 to the good and looking like we can relax for the next push up. With this strength, we may get a perfect top this evening, with a 3 peak divergence. This won't be difficult, given the high peaks in the RSI.
Earlier today I was asked " where now".... I replied that this move has +240 within it's grasp. I think the response was generally you're taking the ****
We're at +210
19:37. Note the last pullback was to 7732......followed by a tiny pullback at 7664.
currently we have the price on a higher high at 7778 and RSI at 80. Divergent across 50 minutes. There are no clear targets to hand, save previous day's resistance values.... Let's take a look at the 10 Min chart....
7777 and 7800 then 7850.
Big drop in RSI- a surprise, completing our first two peaks of a possible 3 peak top out. RSI 20 move 10, still a weak move.
19:45 CCI at +200 and produced a divergence in advance of the price drop.
We have an uptrend support line in RSI to use now, and that is being tested. If it fails, it is NOT an out. ( unless you're scalping).
Testing 7764 magic no. heading for 100MA?
19:49. Mini H&S target 7760..... A move below this should start you thinking, one more sign of a top..... BUT 35 point move in RSI, 20 point move on DOW still a weak move. This is not topped out....
We can now draw a downtrend support line in RSI ( arrowed) to see what happens here.... I would like to see RSI support here- about 40.
19:57. Nice bounce, as we'd expect ( hope) and CCI bouncing off zero.
We're now going to decide on an exit point. We've got our 2 peak divergence and we want to find the third. We want to look for a peak in RSI below 80, and a price above 7780 and a time between the last two peaks of at least 13 minutes.
We already have 20 minutes from the last peak. The first peak took 50 minutes, we may have 30 minutes to go....
Given the strength of today's move, we may not make a final higher high in the price. This seems to be struggling right now to move up. I'll be ready to close on a 3rd lower high on RSI......
20:02. Tricky, almost an out but just a pullback in RSI. The uptrend support was breached but the downtrend support was NOT breached. Now RSI has tested uptrend support at 60, bounced and broken through.IF it had bounced down off 60, I WOULD have CLOSED.
20:06 Price now making 3rd higher high. Waiting to pounce on RSI 3rd lower high to complete the divergence.......
20:07 CLOSED 7783.
currently we have the price on a higher high at 7778 and RSI at 80. Divergent across 50 minutes. There are no clear targets to hand, save previous day's resistance values.... Let's take a look at the 10 Min chart....
7777 and 7800 then 7850.
Big drop in RSI- a surprise, completing our first two peaks of a possible 3 peak top out. RSI 20 move 10, still a weak move.
19:45 CCI at +200 and produced a divergence in advance of the price drop.
We have an uptrend support line in RSI to use now, and that is being tested. If it fails, it is NOT an out. ( unless you're scalping).
Testing 7764 magic no. heading for 100MA?
19:49. Mini H&S target 7760..... A move below this should start you thinking, one more sign of a top..... BUT 35 point move in RSI, 20 point move on DOW still a weak move. This is not topped out....
We can now draw a downtrend support line in RSI ( arrowed) to see what happens here.... I would like to see RSI support here- about 40.
19:57. Nice bounce, as we'd expect ( hope) and CCI bouncing off zero.
We're now going to decide on an exit point. We've got our 2 peak divergence and we want to find the third. We want to look for a peak in RSI below 80, and a price above 7780 and a time between the last two peaks of at least 13 minutes.
We already have 20 minutes from the last peak. The first peak took 50 minutes, we may have 30 minutes to go....
Given the strength of today's move, we may not make a final higher high in the price. This seems to be struggling right now to move up. I'll be ready to close on a 3rd lower high on RSI......
20:02. Tricky, almost an out but just a pullback in RSI. The uptrend support was breached but the downtrend support was NOT breached. Now RSI has tested uptrend support at 60, bounced and broken through.IF it had bounced down off 60, I WOULD have CLOSED.
20:06 Price now making 3rd higher high. Waiting to pounce on RSI 3rd lower high to complete the divergence.......
20:07 CLOSED 7783.
Just to show I'm not cheating, new reply. Closed for +163. I'm not greedy. It may go up more. The 3 peak divergence rule has come into effect so that's it. I estimat that the "perfect top " will be 7795 by extrapolating the 2 price peaks forwards to the third. Sometimes , as I said earlier, the price doesn't quite make the 3rd expected peak, falling short. Either way, we have captured 90% + of the move today, getting in at LOD and exiting to plan close to HOD. That's assuming that this thing doesn't fly on till the close..... We now have a second divergent peak in CCI....
Closed for +163. I'm not greedy. It may go up more. The 3 peak divergence rule has come into effect so that's it. I estimat that the "perfect top " will be 7795 by extrapolating the 2 price peaks forwards to the third. Sometimes , as I said earlier, the price doesn't quite make the 3rd expected peak, falling short. Either way, we have captured 90% + of the move today, getting in at LOD and exiting to plan close to HOD. That's assuming that this thing doesn't fly on till the close..... We now have a second divergent peak in CCI....I hope you had £50 a point on....
So how come you're not in the chat room?
Looks like My top of 7795 was 3 points out
This still has strength- RSI drop v DOW, so I expect this to just drift aimlessly into the close whilst everyone recovers from a stunner. Closeing at or near HOD will lead ( should) to another good day tomorrow.
20:40 RSI has developed into a bull flag and formed a new up trend support line.... well , nearly. 35 point drop in RSI 10 point drop in price..... What does that tell us?
You won't see another performance like this for a while...... In fact I can't remember the last time... It must have been late last year.
So how come you're not in the chat room?
Looks like My top of 7795 was 3 points out
This still has strength- RSI drop v DOW, so I expect this to just drift aimlessly into the close whilst everyone recovers from a stunner. Closeing at or near HOD will lead ( should) to another good day tomorrow.
20:40 RSI has developed into a bull flag and formed a new up trend support line.... well , nearly. 35 point drop in RSI 10 point drop in price..... What does that tell us?
You won't see another performance like this for a while...... In fact I can't remember the last time... It must have been late last year.
Well, I said in the chat room today we'd get +240. We got 273.
How did I do that? Today's open formed a substantial bull flag, where we took our entry at LOD. I took the last major low yesterday,7435, took it away from todays top at the beginning of the bull flag, = 254. Add that to the bottom of the bull flag 7615 we get 7869. We should get there tomorrow. Another target to look forward to. As for resistance, we have fresh air to 7900.
Turns out we had a 4 peak divergent top, but no proof it's a top as we closed at HOD. No complaints please for getting out early!
Under any other circumstances, it would have been the top.... Today was something special.............
How did I do that? Today's open formed a substantial bull flag, where we took our entry at LOD. I took the last major low yesterday,7435, took it away from todays top at the beginning of the bull flag, = 254. Add that to the bottom of the bull flag 7615 we get 7869. We should get there tomorrow. Another target to look forward to. As for resistance, we have fresh air to 7900.
Turns out we had a 4 peak divergent top, but no proof it's a top as we closed at HOD. No complaints please for getting out early!
Under any other circumstances, it would have been the top.... Today was something special.............
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Many thanks for such an excellent thread Chartman.
Iv'e been trading mainly end of day but also developing a system to trade S&P500 intraday.
It's great to know that the system I've been developing and tracking is not too dissimilar to your own methods.
Basically, using 5 min charts with a 20SMA (ie similar to 100SMA/EMA with 1 min charts). Enter position on break through 20SMA after pullback. I also have a few other rules to get me into trades if there is no pullback and also use RSI in a similar way to you. (Also exploring use of CCI at the moment). Exit is either on break of 20SMA or obvious reversal before that happens. (This bit is not quite as scientific as your methods currently, but still seems to get me in/ out at similar times to your own methods).
However, still papertrading at the moment so the real test is yet to start.
Just a couple of questions Chartman. Do you ever trade pre market opening and what are your reasons to/ not to. Also, do you apply your 100ma to 24 hr price action or only price action during market hours as this could alter some trades early i the day, particularly on gap up/down at open?
Once again, many thanks for an invaluable insight.
Iv'e been trading mainly end of day but also developing a system to trade S&P500 intraday.
It's great to know that the system I've been developing and tracking is not too dissimilar to your own methods.
Basically, using 5 min charts with a 20SMA (ie similar to 100SMA/EMA with 1 min charts). Enter position on break through 20SMA after pullback. I also have a few other rules to get me into trades if there is no pullback and also use RSI in a similar way to you. (Also exploring use of CCI at the moment). Exit is either on break of 20SMA or obvious reversal before that happens. (This bit is not quite as scientific as your methods currently, but still seems to get me in/ out at similar times to your own methods).
However, still papertrading at the moment so the real test is yet to start.
Just a couple of questions Chartman. Do you ever trade pre market opening and what are your reasons to/ not to. Also, do you apply your 100ma to 24 hr price action or only price action during market hours as this could alter some trades early i the day, particularly on gap up/down at open?
Once again, many thanks for an invaluable insight.
No, I don't trade pre market because of the risks of the unknown. If I had scalping tools (IB account) then perhaps maybe. My MA's are based on 24Hr action. Those using "freebie" charts- Lycos etc. will be disadvantaged as the 100MA ( or any other) are distorted at the open, as is my DOW chart. This is why it is difficult to trade the opening half hour with certainty.
Today was a pig in comparison to yesterday.
There were a lot of points on offer, but it involved risk.....I came out on top today, but it wasn't easy and eded up a bit of a roller coaster off it's wheels.
I'm short of time so I'll leave the analysis to you to ponder over and see what choices you could have made, or if you traded, did you get it right or hopelessly wrong?
The gamble was closing the first long at 7900.
The 100MA rules fall over in fast moving markets like today.
There was a rare flip trade close and short at 7880. However, you may have felt inclined to "bend" the rules and exit the long as the CCI triangle broke to the downside at 7900, right on the right hand shoulder.......
Having got into the short, It's not long before a bottom appears. The bear Flag has a target of 7780 and that is missed by a mile. If the bears have it, the target would be met. Clearly, they don't, missing the target by a country mile. Then there is another bear flag that doesn't even break to the down side.
From here to the close, it was just a drift in the sea of uncertainty.
So you thought trading was easy yesterday. Maybe you'll reconsider,now, that there is an aweful lot to learn. Total points today 150, most coming from the first half. A typical consolidation day with no real direction. Tight money management and sticking to the plan/rules will see you through days like today .
I hope this week has given you all a taster of trading the DOW. It is a long path to go down but you WILL be rewarded for your effort and attention to detail.The DOW is one of the most predictable instruments that I know of. You just have to learn to recognise the opportunities as they are presented to you. Some days you will feel like you are on cloud nine. On others, like today, you start out that way, and then it all goes pear shaped.
If you feel uncomfortable trading 1 min charts, take a look at 5 mins or 10 mins. It may be less frenetic and more to your liking. If you are (relatively) new to the DOW , it will take you quite a while to find your feet and trade a timescale that you are comfortable with. Over the next few weeks, I'll concentrate on unlocking some more secrets of the DOW. There won't be any "in depth" analysis, rather a brief summary of the day's action.
If you are really interested, you will find in the archives about 2 years worth of DOW intraday charts. Most are reasonably well commented with all the interesting bits. You'll need to search carefully as the search engine will not allow 3 characters so it's noy good just entering "DOW". You'll need to search for "Dow intraday" or "the dow this week".
There were a lot of points on offer, but it involved risk.....I came out on top today, but it wasn't easy and eded up a bit of a roller coaster off it's wheels.
I'm short of time so I'll leave the analysis to you to ponder over and see what choices you could have made, or if you traded, did you get it right or hopelessly wrong?
The gamble was closing the first long at 7900.
The 100MA rules fall over in fast moving markets like today.
There was a rare flip trade close and short at 7880. However, you may have felt inclined to "bend" the rules and exit the long as the CCI triangle broke to the downside at 7900, right on the right hand shoulder.......
Having got into the short, It's not long before a bottom appears. The bear Flag has a target of 7780 and that is missed by a mile. If the bears have it, the target would be met. Clearly, they don't, missing the target by a country mile. Then there is another bear flag that doesn't even break to the down side.
From here to the close, it was just a drift in the sea of uncertainty.
So you thought trading was easy yesterday. Maybe you'll reconsider,now, that there is an aweful lot to learn. Total points today 150, most coming from the first half. A typical consolidation day with no real direction. Tight money management and sticking to the plan/rules will see you through days like today .
I hope this week has given you all a taster of trading the DOW. It is a long path to go down but you WILL be rewarded for your effort and attention to detail.The DOW is one of the most predictable instruments that I know of. You just have to learn to recognise the opportunities as they are presented to you. Some days you will feel like you are on cloud nine. On others, like today, you start out that way, and then it all goes pear shaped.
If you feel uncomfortable trading 1 min charts, take a look at 5 mins or 10 mins. It may be less frenetic and more to your liking. If you are (relatively) new to the DOW , it will take you quite a while to find your feet and trade a timescale that you are comfortable with. Over the next few weeks, I'll concentrate on unlocking some more secrets of the DOW. There won't be any "in depth" analysis, rather a brief summary of the day's action.
If you are really interested, you will find in the archives about 2 years worth of DOW intraday charts. Most are reasonably well commented with all the interesting bits. You'll need to search carefully as the search engine will not allow 3 characters so it's noy good just entering "DOW". You'll need to search for "Dow intraday" or "the dow this week".
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ChartMan,
.....and once again, thanks for making sense of today's action. I must admit, it chewed me up and spat me out i guess it claimed a bit back from yesterday.
I'll take it as another character building moment
Cheers
Oh, by the way, as regards having £50 a point on , mmmm.... me thinks your decimal point must have lost it's way some what !!!!
.....and once again, thanks for making sense of today's action. I must admit, it chewed me up and spat me out
i guess it claimed a bit back from yesterday.I'll take it as another character building moment
Cheers
Oh, by the way, as regards having £50 a point on
, mmmm.... me thinks your decimal point must have lost it's way some what !!!!