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Very well said in regards to the thought process when faced with buying a dip on a trend line. I know I speak for myself that I catch myself often not entering the trade "in case it breaks support".
I take it you routinely wait for the creek to be re-tested for support before entering?
I wait for creek to be retested for resistance before entering.
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
BAC has been in a range for what seems to be a long time. I've heard that sometimes this type of situation might be a "Bull Trap" where there might be a sudden Bearish move soon. How have you dealt with "Bull Traps" and "Bear Traps"? What's the best way to recognize them?
A market will continue in it's trend direction until you see a supply bar(s) or demand or demand bars. This can be considered a change of behavior of trend. If the subsequent reactions are not with the trend, then this could be considered a possible trend change. So I go with the trend until I see a change of behavior action and the trading afterwards. For example, if the market is in a bull market, it will continue in that market until you see supply (high volume and price range). If the market regains that strength after the weakness bar, then it's considered a shakeout. If the rally back up is weak (lighter volume, smaller price range), then this could be the start of the distribution phase and a possible trend change. So I'm always judging price and volume for strength and weakness.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
Wyckoff has specific instructions on how to plot a trendline; so from what I'm reading on your response, the reverse trendline is plotted using the same instructions in reverse? Does that mean from the end of the trend back to the beginning of the trend or does it mean from the beginning of the trend, but on the reverse values (high vs low) of the bars. The reason I ask this is because I seem to remember that Wyckoff said that it is important to plot a trend correctly; so I would think that plotting a reverse trend should also be done properly. Like I said, reverse trends are new to me. I would like to find out more about them.
I don't use any moving averages on my volume. It's strictly total volume. I do watch tick volume as well.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
We draw trend lines and reverse trend lines in order to tell us a story. In other words, market behavior. The greater the reaction, the more prominent these lines will be. Wyckoff used horizontal lines to show demand and supply. These parallel channels (trend line and reverse trend line), show us overbought and oversold conditions, and can show us the strength or weakness of a market. They do not show us demand or supply.
If you look at the first chart I posted in this thread yesterday at 10:18am, I indicated the reverse trend line. The trend line was the bottom line, and the two together form the channel.
Gary
There is a substantial risk of loss in trading commodity futures and options. Past performance is not indicative of future results. The opinions expressed here are those of Gary Fullett, and are not to be taken as a recommendation to buy or sell commodity futures or options. This is for educational purposes only.
I found some instructional videos on YouTube on the Wyckoff method of drawing trendlines. Do you have any comments about these videos? Do you have a video that explains trendlines on your website?