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Denise,
The part that is missing in your analysis that will keep you out of those
trades, is the inclusion of the background of the market. Intra-day chart
patterns can look identical when looked at in isolation, but can tell
dramatically different stories depending upon how they relate to the
background.
Look at such things as the previous day's close, where did the market
spend the most time trading yesterday, and which direction did it attempt
to go. Was it successful? Was price rejected from a certain level, etc..
these all relate to trading the next day. I use the CBOT Market Profile
graphic which is excellent for this analysis. A good book on the subject
is: Mind over Markets by Jim Dalton/Eric Jones.
There are other methods to gauge the background, although I am not the best
person for those.
With regard to today, Before the bad news from Hong Kong came out, the
market made a bottom on the 17th and bounced nicely. the 21st closed near
the highs, but was a bit overextended as evidenced by the 22'nd opening
essentially unchanged. It also closed somewhat weak, which said there was
probably more downside expected. We then opened substantially lower on the
23rd due to the HK news. With this background prior to the news, it would
be expected for the 23rd to attempt some sort of bounce, and trade higher
than it did. Since that never happened, and we closed in the middle of the
range, you could then figure that this news definitely has changed the
background. With the position of the close yesterday, and general
weakness, the higher open today was a good opportunity to short, and look
for the market to trade back to yesterday's close at a minimum.
Hope this gives you an idea of how the background relates to intra-day
activity. One other tip I can give is to say that there are multiple
timeframes operating in the market. A sharp down move in the market
intra-day can become a good buy point for an intermediate term trader.
Frequently when the intra-day chart looks ready to roll over, the
intermediate timeframe influence will become active and push the market up.
By analyzing the background from multiple timeframes, these points can be
exploited. An example of this was today's lows. We might have been able
to expect more upside, but the weekend dampened buyers enthusiasm.
Good Luck,
Chris Lober
> Hi Everyone.
>
> Well, I thought I'd trade some Emini's today. If you are interested in
my
> point & figure chart that I based this on -- I can send it to you
> individually. Gif is too large for this usergroup.
>
> At 10:25 saw support, figured the havoc from yesterday might have settled
> and if the market dropped towards 946 it was time to get out -- I also
put
> in a profit order in for 960 -- bot at 951.00.
>
> Got a cup of coffee and saw it dropping cancel replace the 960 and got
out
> at 948.25.
>
> This is not the first time this has happened to me and so I decided that
> well, ok, I was wrong. The overall trend is bearish, it's Friday. I
sold
> one at 945.25. Put in a profit order in at 940.75 (one tick above limit
> down) and went for another cup of coffee.
>
> AARGH!! Saw 950 AGAIN!! Bailed out at 949.50.
>
> My question is -- is it me, or is it the coffee?
>
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