clylbw said:
There were finally ACTIONS today which had gone missing lately...
Thanks again for the tip on the tweezer bottom, SOCRATES; it got me in for the big rise from the beginning.
I would like to ask two things regarding today's NQ actions.
1. I made a mistake about a fake top
. In the 10-minute chart as attached, I saw the 13:50pm doji as indicating the end of the 5 waves, illustrated by the
pink lines in the attachment, and closed my long position. The next two bars seemed to confirm this, and I went short at the 14:20pm bar, highlighted by the
orange line in the attachment. Obviously, this was a wrong decision; I covered with -0.5 points and went long again for the remaining of the up move. Did I overlook something or make some wrong assumptions which had lead to this wrong trade?
2. I remember Skim once said when watching the volume it is possible to know whether it is the retail or the big boy in charge. How may I do so? I believe knowing this will help to determine whether a high-volume bar represents a trading climax or not. For example, the 15:00pm bar in the attachment, indicated by the
black line, looked like a potential buying climax to me, but the subsequent price actions indicated the opposite.
Thanks indeed.
Mechanical Explanation:~
Right then, let us begin:~
The chart you display contains 68 bars. The vertical cursor is on bar 27. I have no idea what the instrument is, and in any event it does not matter to me.
Look carefully - up to and including bar 29 there is a clearly defined support level at 1410 precisely. Look again. Up till here there is also a clearly defined resistance level above the action so far at 1419 /1420. Why ? This is accumulation.
Bar 30 drops to hit 1406 and recoils and closes at 1407.5. The volume under it is the highest volume recorded so far, is it not ? The next bar opens slightly above this close and drops to 1405 and then recovers smartly to close at 1412, a higher close than the previous close and
on lower volume. This is definitely accumulation.
Observe that these two bars have the lowest bottoms in the series. The price goes up and in bar 33 prods the underside of resistance1419/1420, and falls again, this time to bounce off 1412. Why ? Simple....first attempt is a failure. the price is brought back to 1412 and no lower. Why ? Simply there is no further supply.
Observe that in bar 38 the spread is narrow and the volume attributable is very small.
The price begins to take off, northwards, and the volume increases. The herd has been encouraged to join in. The price continues to motor upwards, the closings change in character.
The volume fluctuates and the price continues to climb. This is herd volume, sporadic, erratic,
timid, but nevertheless the trend remains intact.
At the top where you closed and exited there is no clue that the move has ended, on the contrary, all the clues are that it is likely to continue. It is the wrong place to go short. Why ?
Simple, there is no indication of a reversal. The price is very clearly supported at 34. Why go short ? Answer = impatience. Not imprudence, because you recognised the error and got out sharpish, with minimal damage which is good.
Now study carefully bar 37. The volume underneath RISES. The next bar has a higher closing with less volume. This is clearly a buying opportunity that smart operators are taking advantage of, isn't it ? This is very soon detected and two bars later the price begins to motor north again. This time the herd is more confident that the trend is still intact, but through dithering or not understanding what I have just explained, join in late, hence the added volume, instead of having tucked themselves in earlier.
When, at the top of this move the progress is temporarily halted again, they all get nervous and start to dither again. That is why at 1450 there are closes in the middle but the volume is mixed volume this time. This is not sufficiently grave for it to be a top. The top is not in sight yet. I should not be surprised to see this go another 15 to 20 units This is another buying opportunity for the bulls, should they wish to take it up.
They don't. Why ? They can see the top coming. It is too late for them to participate. They abstain. Hence low volume. OK ?
See the last bar is on low volume. Also there is a reluctance to drift back to lower prices, otherwise the volume would be heavy. Clear as mud, is it ?
The remainder of your queries have been answered very capably by Skim. I am not going over that ground again, we dont want overkill, although a huge tedious book could be written on this topic alone, I am sure these explanations suffice. That is all.
Others usual route please.
