regarding that long this am...obviously ,it was a good trade....on the
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ok,so if i look at the eth ch below,i was looking short all the way.In fact ,i was specifically looking at the opposing 1st std dev area for the short.Any time we get to single prints on the prev days rth ch,its a heads up area(in suport of the long.)
with that said,i was expecting price to attempt to reach this area.Why not consider a long?We opened up out of value,relative to fridays rth session....And that is another thought.Looking at the friday rth ch,we barely dipped below the 2nd sdt dev,but were below the val.When we say out of value,are we referring to vwap or value area? i know,...rookie question.
The reason im going on about this, is i was totally wrong on the big pic today.However ,if i was long, my target still would have been the opposing 1st std dev.....happy new year
Last edited by bobarian; December 31st, 2012 at 07:14 PM.
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VWAP.....Ive had the vwap on my charts for some time now,but am just starting to realize its importance,and how to use it correctly.There is no vwap handbook,but from viewing the trades on this thread,i am getting an idea of some general rules.
I always try to form rules ,to try to reduce the confusion,and add to conviction.
I would welcome anyones views regarding their opinions on this,as it relates to vwap.Putting context aside,if we had 1 chart with vwap,say the eth,would that be enough to keep out of trouble for the am session every day...and take smart trades?...Ok,add the rth tpo..maybe that would be enough.Hmmm
The reason i say without context,is i am trying to isolate the vwap,and view it alone.With that said,have a general set of rules,and then...add context.
I have been observing 1 setup,which i would like to focus on.The pic on this post exemplifies the setup.So here it goes.Some general thoughts.
1.When price is beyond 1st std dev,this indicates a market that is trying to explore prices away from the current value area.
2.Price comes back within the 1st std dev.
a.if in a position,and price comes back within the 1st std dev,the trade should be terminated.
b.on a trend day,a pb to 1stsdt dev can be a good add
3.Once price penetrates ,and is within the 1st std dev,look for an entry on a pb to 1st std dev,with taget being vwap/opposing 1st std dev.
a.This is where context comes in.Essentially,we are determining that price is changing direction.Is there a reason to expect this?Where was the reject?
b.Is it preferable for price to first hit vwap, and pb to 1st std dev for entry?Or, a reasonable break of 1st std dev ,then a pb for entry?I think the latter is fine..Again,opinions welcome.
4.If vwap is sloping nicely,dont fight this.
5.On trending days,a pb to a slopiong vwap with confluence can be a very nice entry.
6.However,in the time i have spent with cl,my view is that most days dont trend.With that said,this setup regarding the 1st std dev can happen often.
These are really random thoughts that i am trying to tie together.My goal is to form some simple rules,and proceed.For the time being, i am trying to isolate the vwap,and then apply these rules with the context of the developing day.
As was the case on Monday, i had a short bias, but price had to migrate from the 2nd std dev,(lower)all the way back to the opposing 1st std dev.I expected this to happen.There was other confluence at this level,which i felt would act as a magnet.This in fact did happen....So,why not consider a long, and hitch a ride to this level?
a.Is there confluence,and a reason for price to head higher?Yes there was.And,once price got above the lower 1st sdt dev,the opportunity presented itself.
The pic here is not the trade i am mentioning.Mondays trade was on the 12/31.They are similar,in that both entries were at the 1st sdt dev.
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