Golden Nugget

[mohan.sic]

You must unlearn what you already know ,before you can grasp this.
Should i rephrase:
The trend from B to C shall always be down in reference to A to B as long as C below A
Even a 7 year old would agree then.

I understand that.
I have a reason for saying no.
Anyway, pls continue. I wil post the query later..

 

[Tavnaz]

What will you call a move from B to C ? Is it a smaller degree uptrend within the larger down trend or something else ? and where does this smaller degree uptrend start ?

Be at liberty to ignore these silly thoughts if they are obstructing the flow of your thread. Just trying to understand the thoughts....

Smart_trade

In fairyland traders can pick tops and bottoms.
Knowing what i do about,Price movements,in forex i can't say about other markets,it is near impossible to catch B to C,i have figured out my propreitery way to spot B but i will deal with it in later posts,
For now i am going to make a bold statement you cant predict when will B to C happen,but for sure you can trade the A to B,more on that in coming posts..
We must remember the key word "Ambiguity".
We as traders don't deal with ambiguity,and finding out B is ambiguous.
50 percent of the time price will breach your point of entry and trip your stop loss,in heavy trending days.
All those super traders making claim that they can catch bottoms and tops are lying, to themselves and to others.
Try going short Eur/Usd when there is an hourly bar of 40 pips coming up your way and survive that,guaranteed it will breach your stop.
No one ever can stand in front of the freight train and stop it,they will die.
You can sit in the train and survive. and catch the ride.
But every doubt will clarify in coming posts.

 

[Tavnaz]

ok i will post this image and elaborate on this later.
Let's see how many figure this one out,the phenomenon is staring right there in your face.
Second image also will be explained later

 

[Tavnaz]

This is just a basic reasoning post which will be required to understand something in the nugget.
I don't think any part of it is make believe,it is backed by solid research on the structure of markets,but feel free to use your imagination and your own reasoning if you have a better one.
Why prices move?
Prices move as a result of good old supply and demand market ,limit and stop orders.
You place a buy order it gets electronically filled at the exchange where the buy order you placed is matched with a sell order in a brokers inventory.
When inventory at a given price is finished the prices move up to the next available price of sale.
So to match buyer and seller, prices shift the level.

Let me simulate a movement of an imaginary instrument ABC company's stock.
You open your platform,prices are moving up and have moved up for the most part of the day.
The wise trader inside you wants to buy that stock intraday because you see it is going up.
But you want a better price a pullback perhaps.
or a slighter move downwards before you buy it.
Price finally hits a price area, we are going to assume we don't know which one and prices starts to drop,you see the 5 Min it is down.
Then after 20 minutes prices are still down,after 40 minutes still down but going down slower,you are still waiting.
Then after 1 hour finally after giving it a lot of time for it to drop to its heart content you decided to buy.
You look to the left prices stopped right where they took of last time.
Why is that?
Because prices were dropping perhaps due to some profit taking at pit,where those who bought for the day are taking profit,and so price gravitates towards the last place where the buy orders were last time,maybe awaiting fresh buy orders.

Reasons and speculation why price can rise where it rose last time are obvious,maybe some short sellers are caught in the wrong move they want to buy back.
Some Buyers want to place new orders.
It is all supply and demand.

Volatility is the ability of price to move from one point to other,big moves are more volatility small means low volatility.
If the big guy with big pockets who bought ABC or dealt with ABC, is on vacation,i won't expect much volatility in it.
If some hedge fund buying a million dollar worth of stock and options of ABC is taking a vacation and they don't want to place any orders in there till they come back i won't expect much action
So simply volatility is measure of instruments market depth and movement ability combined

 

[Tavnaz]

ok i will post this image and elaborate on this later.
Let's see how many figure this one out,the phenomenon is staring right there in your face.
Second image also will be explained later

First image in the quotes Explained

What has been circled in the first image is a classic double bottom as they would say in technical Analysis.No i for for most part don't trade the double bottom or Double tops but i trade the underlying reason behind the formation of Double tops or bottom.
What i have drawn in the first image essentially contains a strong downward move marked by an orange arrow,followed by a pullback in purple arrow.And the point A where the pullback stops and blue arrow when trend tries to resume but has trouble at the previous low,now a tough guy traders who knows what he is doing the second test can always be bought or sold.
The circled area includes the red up move which is happening from the double bottom.And finally the price stop at the same trouble area of A,(remember our rule A will cause trouble,refer to supply and demand reasoning as well),price again sell off,but this time they are testing the bottom for third time.They break it and form an entire downwards movement to the low as shown in that image.

Which all brings me to another striking observation,price behaves consistently across all frames of reference.
What is happening in red circle when the first purple arrow goes up, can be easily equated to the up move B to C (in the same image when green wave down happened)which happens way after wards and somewhere in the orange down move the A-B is happening.
Think of this as the ability of price to behave the same way in a microscopic level.
You can as easily consider what happened from A-B and B-C as a zoomed in version of the orange down move and purple up move.

And the very same thing is happening down there (in the first image see where B is) at Point B there is a last small A-B in there and B-C
when price is making a double bottom at B ans starts a B-C it can be considered an uptrend.
Sure it can be considered as an attempt to to start an up trend but for me to fully consider B-C 's ability to start a new trend B-C must start from a double bottom
Remember always.
Double Bottoms and Tops are Prices way to cancel the last up move or down move,they are searching for more orders ,Trend always tries to resume again,always.
A higher highs and higher lows signify an up trend.
And Lower highs and lower lows signify a down trend.
For me to consider any sample down trend broken on a microscopic level,last series of lower lows(double bottom cancels lower lows) and last series of lower highs(when last impulse wave gets taken out remember when AB=BC for the first time) must be broken ,the opposite is true for an up trend.
For me to consider an up trend established the last lower high must be taken out(reached) last lower low canceled,(double bottom)
A new higher low must be formed

Second Image in quotes is pretty self explaining
Trend at C is trying to resume its course,Trend remains in place until canceled.

 

[Dax Devil]

ok i will post this image and elaborate on this later.
Let's see how many figure this one out,the phenomenon is staring right there in your face.
Second image also will be explained later

No offense, Tavnaz, but anybody with rudimentory knowledge of elliot waves -even with just simple trendlines or pattern reconginition - would not only figure this setup out but also be in trade the moment price falls through the second dotted green line below point A. And would be looking to reverse trade after exhaustion candles have done their bit around point B.

However, maybe you are going to divulge something in your subsequent posts which might do some sort of fine tuning to this setup. Looking forward to your next postings.

Keep it up, friend, and thanks for your time.

Note: BTW, this setup is incomplete, as it needs to have a large set of candles on its left in order to have its tradable worth computed on the basis of its relative postion to the overall preceding structrure.

 

[Tavnaz]

Have a look at what is happening in Black circled areas.
Pretty much, explains itself .see image.
Some, i have not even marked.
Candles are never breaking their highs and lows easily.
At the left we have intraday bull trend,Price never traded below the candlestick lows ever.
The Power of Trend is in its ability to resume itself.
The Power of uptrend is to solidify last impulse wave low(last higher low)

 

[Tavnaz]

No offense, Tavnaz, but anybody with rudimentory knowledge of elliot waves -even with just simple trendlines or pattern reconginition - would not only figure this setup out but also be in trade the moment price falls through the second dotted green line below point A. And would be looking to reverse trade after exhaustion candles have done their bit around point B.

However, maybe you are going to divulge something in your subsequent posts which might do some sort of fine tuning to this setup. Looking forward to your next postings.

Keep it up, friend, and thanks for your time.

Note: BTW, this setup is incomplete, as it needs to have a large set of candles on its left in order to have its tradable worth computed on the basis of its relative postion to the overall preceding structrure.

You see i am trying to show what is happening in there not trying to show its tradable worth (for now),we need to visualize the waves,rather then candles.
In elliott wave trading there is wave count involved if you know that?
We are not counting waves here,we are visualizing orders and movement.

The purpose of this thread is not to trade against the intraday trend.
We as traders don't deal with ambiguity.
You will not buy at B if your daily paycheck depended on it.
Instead you will let B form and wait for second test to buy.
Figuring out B is a fools errand no offence intended.
How many of you have actually seen an exhaustion candle work 100 % of the time,i have seen Pinbars that never break their highs

 

[Tavnaz]

Have a look at this,how many of you have actually paid attention to it,while you trade.
It has deep seated value,very deep.
Yellow is wimpy time,yellow time is when all wimpy kids in the block come out and do their thing.
Black is when all strong kids come on the block,the wimps are with their mommies and daddies then.

 

[Dax Devil]

You see i am trying to show what is happening in there not trying to show its tradable worth (for now),we need to visualize the waves,rather then candles.
In elliott wave trading there is wave count involved if you know that?
We are not counting waves here,we are visualizing orders and movement.

The purpose of this thread is not to trade against the intraday trend.
We as traders don't deal with ambiguity.
You will not buy at B if your daily paycheck depended on it.
Instead you will let B form and wait for second test to buy.
Figuring out B is a fools errand no offence intended.
How many of you have actually seen an exhaustion candle work 100 % of the time,i have seen Pinbars that never break their highs

1. Yes, I know wave count is involved.

2. Once you see a considerable momentum or reluctance in the movement, the order 'visualizing' automatically gets into picture.

3. Intraday trading is not so special. The purpose of any trading - swing, positional or intraday - is not to trade against the trend. Period.

4. I wouldn't know how or what other traders do. But to me market IS ambiguity. And I deal with it by locking my profit at the first chance. As the Ferngi in Startrek has a saying: Once you have their latinum, do everything to keep it.

5. No, I will not buy at B. Yes, I will wait for second test. That is what I have said in my post, I will let the exhaustion candles playout their bit around B.

6. Oh, figuring out B is not that big deal. In fact, figuring out what market may do next is what gives any trader his trading edge. And ofcourse, no offense taken, friend.

Correction. There is no such thing as single exhaustion candle per se. It is a complex set of candles. I have seen them, and I see them everyday. Yes, they don't work 100% of times, but I take the trade 100% of times once I am convinced they have done their bit. That is my deal with the market.

Next time when you see a pin bar not breaking its high, please check at what point of the price movement the pinbar turns up. You will know why they fail and what game got played around that pinbar.


Anyway, nice interacting with you. It is 4pm and my time at Traderji is up. See you next week. Take care and have a profitable week.