Understanding bounces and how they set up vs more legitimate, longer lasting rallies and how they may set up well, can be very helpful to your account. It can help in the timing, entry, exit and confidence. Bigger bottoms are formed by a couple, or many more, smaller bottoms – meaning, trading ranges. There are 3 trends, but most people only think there are 2 trends. Trading ranges/sideways trends require a unique approach. So instead of getting chopped up in a range, become more adept at getting in and out, and at the same time watch a potentially bigger bottom (or top) form in front of you. The weak hands have no patience, it’s one way we can have a huge advantage – and acquiring skills such as patience are free to learn. And you know what we’ve been talking about with the concept of “backing up from the creek”. That’s what gold needs to do to get across “this creek”. Many of you have heard me constantly saying “the market needs a good backup, and that will only strengthen it”. Now are you starting to see why I say that so often?
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Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.
So if there is a quick bounce from Friday’s action without a lot of ending action does that add to the probability of a bigger bottom in this cycle or down the road?
Maybe the lunar effect is written into the algos:)
https://www.tradingview.com/x/QrRTTBgO/
Look at it this way, I do believe August is part of this cycle, and more, much more EA, would give higher probability to the next push down being a higher low/or much more solid low. Like a leading indicator – strong hands getting a bit feisty. I believe we’re pretty darn close to more than a bounce, but less than a major rally. The problem is that SOW on Fed day. Those things are like a moocher friend, they keep showing up (factoring in). Like what I was talking about after that horrific upthrust/SOW on election night. This one not as gross tho.
Got a couple charting questions and one on the video.
A) Referring to the creation of resistances areas on the video(4:40). What’s the rationale for wanting to setup resistance areas while long for a short lived bounce?
https://www.tradingview.com/x/OAXVR2cj/
B) On a 5 min chart, some sort of significant buying climax was created. Wondering if that is a reason in itself to use the top of the buying climax as a place to close a long position instead of the original planed resistance area(1229)?
https://www.tradingview.com/x/zkhFIs7u/
C)On a 5 min chart are those tails((four of them)(arrow)) part of an EA or do we count those as EA by itself?
A) It’s trying to see how you can squeeze more out of the trade, and how that is likely to unfold. You know how I talk about how I’m always trying to see what/how the scenarios for the next 2-3 trades down the road might set up for me. Remember – always in context and continuity of process. So if you’re in a trade on the other side (if long, then how a short-sale may set up), considering how the next trade may set up. Always planning.
B) Certainly.
C) Those to me are barely SA, stopping, context – we were in the middle of the trading range. And we need to see the volatile push back up, and hold, at least for a bit. Compare those to what was in the TLT chart in premarket.
D) You probably have more questions about this – let me know.