5 minute ES
Price began low in the range unable to firmly break out bearish. Early news spiked price through the range and we began to see a resistance at 1518.75, and the short back to the open low. With this type of price action, the trends are harder to play (emotionally) with all the wicks and tails. One of the reasons for developing the BOT Range was to eliminate some of this emotion. "If this, then that" logic is behind the system. If the LB fails, we run the range, and so on.
To see the difference, look at the next trend that developed off bars 26 and 27. It actually started off a 50CB 45 degree line from bar 19. If you were nor "range run" long on bar 19, you should be able to decide after 4 and 5 hits of the trend line.
The next TL developed as the BO5 failed around 1524 and price fell below the EMA at bars 62-63. Another 4-5 touches that failed to break the trend. Action? The TL is suggesting strong bear bias. BOT action was saying the same...
My question is: when can the (or a) TL be drawn?
ReplyDeleteDon't we need at least 2 points first? Is 45 degrees trendlines from a CB a 'standard'?
The first downtrendline can be drawn after two bars. Too late for an entry?
Also is there a definition of when a bar is a CB?
Thanks for answering!
A true TL will require 2 to 3 points to draw. The 50CB is a little different, since it implies a support or resistance level. Here are some more examples of the TL off the 50CB. A true 45 degree will show how strong the move is away from the 50CB. The first two have steeper TL's from the 50CB, the last has a steep, a 45 for the bull and a 45 for the bear at the top. The point: a 50CB can follow normal terms of 2-3 points to connect, or visually see the 45 and how price is moving with/ or away(stronger move).http://screencast.com/t/jSe2UKOhz http://screencast.com/t/vsAow4Hb32C http://screencast.com/t/5pMaXcrc26
ReplyDeleteThe first TL on the 5m chart was a potential at B7 which failed to break, B10 & 11 same reason (and the 1518.5). Remember, it is a trend line and once you have it (bar 4-5) your focus is upon a reasonable entry point with trend. That would be around the TL, or a gap near the TL. The purpose is to minimize your risk. The TL is an added "crutch" when levels are being played. Even without the levels, the TL is a very useful tool.
A CB is a micro range bar. It establishes the range of price activity and will act as support or resistance. That S/R likely will be tested to 1) break and reverse the prior trend; 2) not break and the prior trend continues. Let's look a t a few: B2 50CB 1516 B7 (1517) then B19 (1550.5-1550.75) and B46 (1520.25). They tend to overlap prior levels, are seen as prior level reversal bars, or can be seen as consolidation break out bars.
Is the chat server changed again? 'Boston' seems to be down.
ReplyDelete