Hinges and Springboards

[bracke]

Could I ask you if you traded this share and at what point did you enter? It seems that one would have had to come to a decision to trade before the event. If that is the case, then I cannot see an advantage over other systems that traders may use. Take a look at my chart of SMC using a Bollinger Band.

Splitlink

I did not trade SMC. I had it on my watch list largely due to the 100 - 110 channel, I had been watching for a break. The previous large fall was due to a profits warning and when there is one there is often one or two more............there was!

The drop came too fast for me to trade it and I have no intention of trading it long at this stage.

I do not use bollinger bands or similar, price action as per dbp is my preference but each to their own.

If the breakout from a platform/hinge is gradual I think that they can be of use but if the news is of the bombshell variety I don't think anything can help with that.

Regards

bracke

 

[Splitlink]

Splitlink

I did not trade SMC. I had it on my watch list largely due to the 100 - 110 channel, I had been watching for a break. The previous large fall was due to a profits warning and when there is one there is often one or two more............there was!

The drop came too fast for me to trade it and I have no intention of trading it long at this stage.

I do not use bollinger bands or similar, price action as per dbp is my preference but each to their own.

If the breakout from a platform/hinge is gradual I think that they can be of use but if the news is of the bombshell variety I don't think anything can help with that.

Regards

bracke

I don't use BBs, either, but I was trying to show that there is not much difference between any of the methods used. I think that everything has been, pretty well, tried and tested by now. However, I later noticed that the bands did not seem to narrow as much with the Footsie shares and I found them more difficult to pinpoint until after the event.

I'll keep checking them out.

Regards Split

 

[ymonly]

to put it very simply the run runs and the chop chops...chop chop

 

[Splitlink]

Does what matter?

Although someone else suggested it and you denied it, it looks like a breakout, to me.

Breakouts fail and reverse and I see no new details here to suggest that "springboard" adds any new dimension to the pattern. We are agreed that it advises of an approaching, important, price movement but so did my chart of the Bollinger points of the Bracke's chart.

However, you said that "springboard" was not a system snd Bollinger was, so I repeat
Does it matter?

Regards Split

 

[firewalker99]

The expression chop and run is not known to me. Would, you clarity that, please?

Split

I believe ymonly is refering to two states where markets can be in: trending and sideways.
Trending is "run" where price moves quickly up or down (pointing towards up or down respectively by making successive HrH's and HrL's or LrH's and LrL's), and chop where it goes sideways or without any clear direction (making LrH's and HrL's or staying rangebound, or moving all around the place...).

 

[firewalker99]

Splitlink

Generally agree but remember sp can move sideways for a long time and as dbp has pointed out the hinge may just resolve itself into more sideways movement.

However the chart I posted last week of SMC has seen the platform resolve itself. See chart below.

There you go. A plunge lower like I thought it would (post #97). Shorting from 110 would have got you nice and early in the move.

 

[chump]

"Shorting from 110 would have got you nice and early in the move."...not necessarily ....don't know the stock ,but with that kind of volatility a limit order might not get filled and a market order might get slaughtered on slippage in and out ....personally I prefer to trade more controlled situations ...for everyone of these 'big hits' that turns out just right I could be banking multiple controlled hits without anything like the uncertainty over how the trade will perform.Anyway that's a personal thing so it's academic ,but my thoughts on the remark made about the move are what was intended by way of qualification.

 

[firewalker99]

"Shorting from 110 would have got you nice and early in the move."...not necessarily ....don't know the stock ,but with that kind of volatility a limit order might not get filled and a market order might get slaughtered on slippage in and out ....personally I prefer to trade more controlled situations ...for everyone of these 'big hits' that turns out just right I could be banking multiple controlled hits without anything like the uncertainty over how the trade will perform.Anyway that's a personal thing so it's academic ,but my thoughts on the remark made about the move are what was intended by way of qualification.

Well, I don't trade stocks so, and when trading futures I don't hold overnights, so I'm not likely to get slaughtered on a gap. Even on intraday news slippage will never be as big as this sudden move lower. But I guess that's all down to one's risk aversion... My analysis was only based on what I saw and that pointed towards a short for me, regardless of the risk accompanied. But with chart being a daily one, there's no doubt that if you wanted to get in at 110, you could've done so easily.

 

[Splitlink]

to put it very simply the run runs and the chop chops...chop chop

 

[chump]

fire,
the point being made is this with that kind of volatility my strong suspicion is when analysed the liquidity available would be awful..some price levels would have been missed altogether ...you won't always see that on the chart itself so what looks like one lovely move when broken down turns out to be something else entirely from a practical view of trying to trade it....the map (chart) in the case I make is not the terittory you face when you try to trade it.
Accept your explanation of the way you trade and what you trade ,but we were not discussing that were we and for clarity my qualification was not criticism of you or your remark ? The market is an auction , if you have ever been to a real life auction you will see what i am highlighting here happen very often...you see price go from A to Z , but there isn't a price made on every increment inbetween ...this is why your statement about getting filled doesn't necessarily hold true....it might ,but it might not and that depends on the specific move/instrument......in a really thin stock moving with volatility the might not get filled because of illiquidity becomes a strong issue.

Just had another look at that chart ...to put any real control on that move you'd need more than a chart ...level II would be a must otherwise you're gambling on where the fills might be available.

 

[firewalker99]

fire,
the point being made is this with that kind of volatility my strong suspicion is when analysed the liquidity available would be awful..some price levels would have been missed altogether ...you won't always see that on the chart itself so what looks like one lovely move when broken down turns out to be something else entirely from a practical view of trying to trade it....the map (chart) in the case I make is not the terittory you face when you try to trade it.
Accept your explanation of the way you trade and what you trade ,but we were not discussing that were we and for clarity my qualification was not criticism of you or your remark ? The market is an auction , if you have ever been to a real life auction you will see what i am highlighting here happen very often...you see price go from A to Z , but there isn't a price made on every increment inbetween ...this is why your statement about getting filled doesn't necessarily hold true....it might ,but it might not and that depends on the specific move/instrument......in a really thin stock moving with volatility the might not get filled because of illiquidity becomes a strong issue.

yes I agree... I haven't looked any closer at that stock so I can't tell. To be honest I wasn't thinking about liquidity at all, because trading a stock that lacks liquidity seems like a gamble anyway.

But you're right of course, price doesn't have to be a flow of continuous variables but can be a succession of discrete values. I guess it always is because of the bid/ask spread but that is zooming in to a micro-level.

Ok... back to the topic...

 

[Splitlink]

I don't recall denying anything recently about breakouts, but then I don't know specifically what you're referring to. In any case, if by "it" you're comparing something that's a system to something that isn't, then you're comparing apples to oranges and the character of that comparison matters.

I'm assuming that anyone who posts comments about springboards has read my original posts about them and understands what they are and how and why they are created. If he hasn't read the posts and/or doesn't understand what springboards are, then we are all just beating the air (anyone who asks if they "work" doesn't understand what they are).

Db

You are right, you said they were not shoulders, my mistake. I admit that I view charting with my own eyes but, if I hadn't been reading your thread, I would have called your springboard a shoulder.

Would you not call the breakdown to the right of the 4, on your chart a breakout?

Anyway, with due respect, this is just an opinion of my own.

"That which we call a rose By any other name would smell as sweet"

Split

 

[Splitlink]

I believe ymonly is refering to two states where markets can be in: trending and sideways.
Trending is "run" where price moves quickly up or down (pointing towards up or down respectively by making successive HrH's and HrL's or LrH's and LrL's), and chop where it goes sideways or without any clear direction (making LrH's and HrL's or staying rangebound, or moving all around the place...).

Thanks

 

[Splitlink]

A good question, and I hope others will give us an idea about their thoughts. I for one will admit that I have no high probabibility take on what will happen, but for me hinges often signal a strong continuation signal in an uptrending market.

The hinge itself is an area of indecision... a pause where traders need to find new equilibruim... each attempt to push higher fails by sellers who come in earlier than before, each attempt to breach lower fails equally because buyers are coming in earlier then they used to; thus creating a shallow range converging to a point where something must happen, some energy needs released.

To anyone who likes heads and shoulders, that looks like short. Use the Ross 123 and that says short, too. The springboard, itself, is a warning and I can't see anything to make me want to go long. I try to use pullbacks, myself, and that would have given me a short signal, too. Actual breakout can be too late. Like it or not, you must come to a decision while on the board, not after you've jumped

 

[ymonly]

and then there are the fakeouts, not the breakouts....the fomc announcements, etc., when the price zooms away and we panic trade the move .....fear..only this time the fear is "i am going to be late it is running away from me"......thingie..............then when we get in and feel so relieved that we bought very low which is rule breaker for most that understand reality, we realize we trapped ourselves as we see the foolish mental stop being threatened and zoom the platform #'s say mental anguish instead of mental stop as stop is blown and price is zooming ...not in our direction....as we mind/finger freeze and say, " it has to come back to me soon"....and it doesn't ......huge points underwater later we decide to take our licks and exit with big loss because someone is not in control of trading by the rules, or rules are bad....more capital spent, not to mention the emotional capital wasted........if this happens one should spend another year or 2 getting ducks in the proper row....or get someone to help you that knows how to trade......that is not me..........just my simple humble opinion.....emini intraday trading only...

 

[Splitlink]

and then there are the fakeouts, not the breakouts....the fomc announcements, etc., when the price zooms away and we panic trade the move .....fear..only this time the fear is "i am going to be late it is running away from me"......thingie..............then when we get in and feel so relieved that we bought very low which is rule breaker for most that understand reality, we realize we trapped ourselves as we see the foolish mental stop being threatened and zoom the platform #'s say mental anguish instead of mental stop as stop is blown and price is zooming ...not in our direction....as we mind/finger freeze and say, " it has to come back to me soon"....and it doesn't ......huge points underwater later we decide to take our licks and exit with big loss because someone is not in control of trading by the rules, or rules are bad....more capital spent, not to mention the emotional capital wasted........if this happens one should spend another year or 2 getting ducks in the proper row....or get someone to help you that knows how to trade......that is not me..........just my simple humble opinion.....emini intraday trading only...

You're soooo....emotional You've got to be cool, calm and collected.

Split

 

[firewalker99]

To anyone who likes heads and shoulders, that looks like short. Use the Ross 123 and that says short, too. The springboard, itself, is a warning and I can't see anything to make me want to go long. I try to use pullbacks, myself, and that would have given me a short signal, too. Actual breakout can be too late. Like it or not, you must come to a decision while on the board, not after you've jumped

If you are seeing a H&S pattern in that, than your definition is different from mine
I need the head to make a higher high, above the left shoulder, which in this case doesn't happen.

Anyway, I guess it only shows that anybody can see anything if he/she tries hard enough :|

 

[ymonly]

Thanks for the advice....so true...ET/ES journal is where I learned all that...

 

[ymonly]

one question before i retire for the day...why did you people not recognize the genius of Mr. Marcus when he was giving you the gold....???

 

[Splitlink]

If you are seeing a H&S pattern in that, than your definition is different from mine
I need the head to make a higher high, above the left shoulder, which in this case doesn't happen.

Anyway, I guess it only shows that anybody can see anything if he/she tries hard enough :|

Wasn't it? I'm talking about the highest point on that chart being the head. It isn't the best right shoulder I've seen, but I think it's there.