Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Short covering rally: usually produces a P shape profile. We refer to short covering as “old business” because it is reversing earlier inventory. Short covering actually weakens a market as it removes potential buying interest; you cover a short by placing a buy order. The old adage is that a market may be too short to break any farther and that it has to “rally before it can break”; another way to view short covering is an adjustment in inventory. Short covering rallies can be very violent and misleading if you don’t understand the difference between old and new business. Short covering occurs within every timeframe; day timeframe short covering may be over quickly while longer timeframe short covering may last for much longer periods of time.
Long liquidation break: usually produces a b shape profile. We refer to long liquidation as “old business” because it is reversing earlier long positions. Long liquidation can actually strengthen a market because it removes potential sellers; you liquidate an existing long by selling. Similar to short covering rallies, these breaks are against the prevailing trend and can be sudden and sharp. The old trading adage is that a market may be too long to go any higher, i.e. “a market has to break before it can rally”. Long liquidation is a process that adjusts inventory that has gotten too long. It occurs within every timeframe; day timeframe long liquidation may be over quickly while longer timeframe long liquidation may last for much longer periods of time.
It's amazing how much information you can pick up from Dalton if you really pay attention to his webinars. I was watching one of his most recent webinars and something clicked.
Maybe this is just me, but I thought whenever he was talking about location, it meant trading from those single prints at the extremes. However, this here summed it up for me. I hope this helps someone too.
"Good trade location means you have a place - structural - to place your stop."
In the example provided, it is apparently clear that CL had been ranging for 3 brackets. However, when we broke out of that balance (D period), good trade location would be to take a short with your stop inside the balance (however, you have to understand where your target is. This is a small opportunity trade because of where we are in regards to yesterday's range, so take your profit when price reaches the lows instead of hoping for more). Dalton calls this great trade location (even though it's not at the extremes) because, you know that since we've broken out of balance, if we get back into balance, then that invalidates your trade and you want out. That's structure and trading value instead of price.
Im short from the highs but this feels like it want to rip up
We are pretty out of balance on the weekly and monthly Vwap devloping value here
If we can hold below yesterday highs and todays "C" excess im thinking we might see a nice sell off retracemnt here
Either way we have not tested the O/N extreemes yet
What ever way we break out of todays balance/value will be the move i expect...up or down
" I will follow my rules, I will take my stops, I will be disciplined and i will work with the market....NOT AGAINST IT! Professional mind control is the key"
Again if we hold this structure, the only way is down if you ask me..
Once the guys who are long start to sweat, hoping to see them bail and a nice sell off
It been a weird few days so who knows whats going to happen
We still have not broke cleanly out of todays balance.....but we did test the O/N extreeme and failed so far
******We also have some decent excess to work with now (**for the moment**) on the 4 day composite i have been tracking******
" I will follow my rules, I will take my stops, I will be disciplined and i will work with the market....NOT AGAINST IT! Professional mind control is the key"
Ryan: Thanks for your commentaries and insights throughout this thread and for this reminder to keep the Big Picture in mind when finding a good trade location. I have been using your daily and weekly VWAP bands sucessfully, and would like to add the monthly VWAP bands shown in the referenced post. Has the monthly VWAP band file been published, I am unable to locate the zip file in the download or in other searched areas. If it has been published, a point in the right location is appreciated.
Exported using NT Version 7.0.1000.26
Indicator will only run on NT 7.0.1000.5 or later
The indicator displays the Volume Weighted Average Price of the selected session. It can be used on all types of charts.
You can apply the indicators to …
but I would wait, there'll be a new version coming out in the next few days.
Thanks for the headsup @Sylvester 17. I am presently using the Monthly Vwap from FT
@greenr has modified the daily and weekly verisons of the FT Vwap indicator to plot the mid point of each band. I am searching for the modification of the Monthly VWAP and not sure of Ryan has published the monthly yet. Ryans modified day and week vwap indicator can be found here: Search - Big Mike's Trading Forum (hopefully I linked properly).
