Sometimes we need to make this, meaning going over (studying) the charts, much simpler. So just stepping back and viewing charts from a trend change in character is very helpful. We’ll take a look at some ideas about how to accomplish it. Gold, silver and AMD are discussed. I still have a small position in AMD. The change in character at the big highs in AMD, and the change in character shorter term after the quite bearish big volume selling – meaning using a rally to short. And in the next video about this, there will be a discussion about shortening of thrust, which was a very big part of my belief in how it was time to step back into gold in December 2015. And remember, this thing about the frontside vs. the backside of tops and bottoms. and frontside and the backside of accumulation. We decided to always view the bottom as the beginning, so the move back higher is the frontside of the bottom. At the same time, it would be the backside of accumulation. And yes, it is a very good way to always view markets, because the strategies are totally different depending where we appear to be in the process. Markets are a 100% continuing process, that is why this is so important.
Coming back to an old video and trying to review some of my knowledge gaps.
Question on change of character.
https://www.tradingview.com/x/MeteZBsL/ Long term chart is up.
There is two scenarios that I’m thinking of that can create an entry opportunity.Maybe there is more. I can’t think of at the moment.
A)Looking forward.Although there are some SOW(ARROWS) If a break of support happens and there is a 1-2-3 after the break on 60 min chart.
Although there is plenty of SOW. Would that be a high probability entry point due to it’s larger time frame trend being up?If so, at this point would that be a swing or day trade opportunity maybe both?
B)Scenario B. IF that forms some kind of absorption instead. Would that be a high probability entry point despite it’s SOW?
This would be my version of a 60. I need context in a chart. Looking at the trend, the previous areas, the powerful SOSes. Now I can feel something about it, not just guess as much.
EA is a change of character, lots of things are actually. So yes the character changed as the stock entered a trading range. I can not tell you the probability of it, because I need to see how it plays out. And I need to identify if I see a specific trade setup (pattern) there. Then I can have a probability in mind. Yes the SOWs can play into it, as does the overall market, as does their earnings reports, and the overall relative strength, all these things play into a potential trade setup depending on the person. I discussed a lot of this in the breakout video. And how about the float? So you develop your pattern and components, and then see if you can recognize some things there. So yes, the 123 after a break of 95, could be something there and you keep monitoring the stock. You need to really think this part of it thru. The only point of doing analysis is to help with recognition of a trading pattern, anymore analysis beyond that is a negative. So you need to know this, and what you are specifically looking for.
And yes the larger trend being apparently up should play into it, then are you looking for reaccum, absorption, handle, breakout? Those are my setups.
Time-frames of the SOWs need to be heeded. Absorption can not happen unless the SOWs have worked their way thru.
Also, take a look at this chart of my only daytrade today, all of the analysis on there is done specifically looking for a bounce trade setup/pattern off of the #2 EA. That is why I analyze charts. There was actually another trade setup later with the reaccum, I was watching it but it did not fit my probability structure, so I passed on it. Yet the trade would have been nice, good recognizable parameters for someone else maybe.
“Absorption can not happen unless the SOWs have worked their way thru.” can you define what you meant by “have to work their way thru”?Do you meant to say when they phase out so to speak or it’s effect has expired?If so how do you know when it had expired?
“Also, take a look at this chart of my only daytrade today, all of the analysis on there is done specifically looking for a bounce trade setup/pattern off of the #2 EA.” So the reason you chose to buy the 2nd bounce was because the volume just picked up almost at the very bottom on the way down?
If so would you classify that as a case for Effort vs results?
You don’t know when they’ve expired and you shouldn’t try to figure that out. All you are wanting to know is if there is a trade setup. Absorption is a trade setup, in the context of the rest of the conditions, that is for me. I do not know if it is a trade setup for someone else. It is something I developed.
So do not try to figure out if it worked its way thru, you’re just going to end up guessing. I use all of these tools for the goal of trading pattern recognition, nothing else. You do not want to be in the guessing game. Probabilities.
That was the #3 bounce, not #2. I watched the #1 and the #2 EA top, selloff, and the bounce. That was #3. The fifth arrow at .70 is the top of bounce #2. I know the probabilities on this extremely specific one, and it’s around 70%.
Also notice that it DID NOT go to a new low. That new low trade is very low quality. I literally had a .03 cent stop on that, 5%, great parameters, part of every setup BTW the parameters are literally part of the setup working.
And you see this discussion here, this is where I want you to be going with this now. You know plenty, now put it together into trading pattern structured stuff. The analytical stuff is not the trade setup. It forms the conditions.
Sorry I put the wrong chart in there. Here is AYTU.
“BTW the parameters are literally part of the setup working.”
Do you meant to say the SOS after the setup and the bullishness such as trend absorption absorption ,reacum etc? If so it has to be in the main time frame or any lower time frame(supposing that my main time frame I’m watching is 1H).If not, May you give me more details so I know what the subject is about?
Thanks Scott.
Here is the right chart BTW.
Good morning.Good some chart recognition and judgement questions
https://www.tradingview.com/x/QVoIsoWZ/ I had seen in many time frames this kind of price and spike.
I’m choosing Bitcoin as a demonstration purpose.
– Blue arrows are pointing out the 123 setup.
– Red arrow is pointing out that there is lower heigths.
A) Are the strong hands selling and causing the bounces to make lower heights? Is that an accumulation morphing into re-distribution?
B) Suppose you are long in a position like this and you see a break of the 123 support on a high volume like this. Would you exit on market order?
I fear that I had not made my question clear on the Call conference.
C) when going long on a swing trade on an individual stock. What you don’t(may what you do want to see) wanna see happening on the index when you are placing a order?If so what about day trade?
Thanks Scott for the education.
Good morning Raphael. That is not a 123 bottom setup, to m, at all. I would not even be looking to buy there. And again, not enough context for me. Here is my chart. You are trying to do my 123 setups without context. If anything I would be looking to get short on rallies.
So I can not even answer this because it is not a 123 buy setup.
C) I’ll get back to it.
C) Here you go, study these. Charts below. Comment to a friend at 3:20 who was long, I said to be very careful, meaning sell. Real-time stuff, this is what was getting me to look for the short side. What did I say this morning – “SPY above 263, look for the short-side setup”.
here here here.
The first one, notice the 2 waves, the then the red volume in #3, that is where I bought SPY puts, on the #3 of the #3 area, SPY about 264.80. But guess what? It did a “terminal upthrust”, #4. The trade did work great, chart 3, I stuck with it, but a bit early.
“Terminal Upthrust” never heard of that one.
may you expand?
It is basically the opposite of this. But remember context, that SPY is a 1 minute chart.
Let’s suppose it is trading on a trading range inside a trading range and that should up.
Would that be what?
Is it bullish or bearish?
BTW thanks for that chart.