In my analysis last evening, I came up with a descent trading (game) plan. It basically boiled down to IF I didn't see a lower low than Friday's low, I would look to be a buyer for a test of the low volume area in Friday's volume profile. I personally believed we found support (demand) on Friday near the 1.2800 level...back from mid-May (May 17th).
I must honestly admit that I was disappointed with my PATIENCE once I did buy. In the EU session, I took a couple stabs at buys...covered ahead of whole number 1.2850 and near Cashish 14/16 "normal" rotation above the whole number. I did OK but covered a bit earlier than I had planned in my analysis.
Super Mario had me on the sidelines after those trades.

emini

As @Cashish mentioned at the beginning of this thread - what hours do you trade? For me it is the London session 0300am est to 1130am est.

On my chart's, M1 & M5 I have a study that marks the high and low of the opening bar for each hour. Many times this will be the high or low of that hour, or continue lower or higher of the previous bar (hour.)

What this does is it allows me to quickly see if there is a relationship (trend, no trend) or not from the current hour to the previous (s) and then drill down further (you don't need a study to do this, it can be done manually - I like to keep my charts as clean as possible.)

What I'm trying to get at is many time the 3am will continue or reverse (hence his 2X - High, 2X - Low) the 2am, the 4am to the 3am etc.

It's not always "perfect" but over time you will (should) see a relationship, esp at key hours of the day (ie 1030am reversal)

Chart from yesterday M5

Please excuse me for not being very clear on my above post

What I thought I was referencing (2x-High, Low) is this

@Cashish wrote

"Since my synthetic session starts at 2am and ends at 6am I only have to analyse 4-1hr bars. Below is a chart with a simple open, high and low study programmed to calculate for 2-6am. Look back over the last 20 trading days and retrieve the average of the smallest of the distances from the open to the high or the open to the low, the smallest of these two moves of the opening bar (1hr). Today's opening bar was 9 points up and 10 point down, so the short move was to the upside. This is called the failed move, false move I just call it the short move. While you are retrieving the average of the points in the short move of the opening bar of the last 20 session, also look at how many times the short move held throughout the entire 4 hour session. In this example it held, prices fell and never ticked higher than the 2am opening bar."

Have a good day

-Bill_M

@Cashish

"The BN can serve as support in a rangebound market and also serve as a breakout sell number in a trending market. Vice versa for the SN, the SN can serve as resistence in a rangebound market and also serve as a breakout buy number in a trending market."

Today is a very good example of what he's talking about - BN was 1.2831. At the start of the session this number was a long way off. However as 6E went forward into the NY session (esp after the pit opens at 0820am) coupled with the folks across the pond developing diarrhea of the mouth, the euro blew through this number.

If I was paying attention it would have been an easy sell market - I only recommend this for the experienced not so faint of heart.

Cheers

-Bill

EDIT

There's no School like the Old School

Thanks guys for contributing to the thread, and thanks for the charts.

eminitrdr 

In my analysis last evening, I came up with a descent trading (game) plan. It basically boiled down to IF I didn't see a lower low than Friday's low, I would look to be a buyer for a test of the low volume area in Friday's volume profile. I must honestly admit that I was disappointed with my PATIENCE once I did buy. I did OK but covered a bit earlier than I had planned in my analysis. emini

@eminitrdr Don't forget to keep an eye on "Yesterday's" 50% Line or the Mid Line of the previous session's range, just to see how that level "fits" into your plan. Sunday/Monday trade chewed on Friday's 50% for quite awhile before continuing to fulfill the move you were anticipating,, well done.

WilleeMac 

As @Cashish mentioned at the beginning of this thread - what hours do you trade? For me it is the London session 0300am est to 1130am est. On my chart's, M1 & M5 I have a study that marks the high and low of the opening bar for each hour. Many times this will be the high or low of that hour, or continue lower or higher of the previous bar (hour.) It's not always "perfect" but over time you will (should) see a relationship, esp at key hours of the day (ie 1030am reversal)

Yes, @WilleeMac With the 24 hour market we have now days keeping an eye on hourly charts can be very beneficial. With all the different trading session hours around the world "things" do happen like clockwork. I use the 2-3am hour as a 'kind of' initial balance range,, but then again I start at 2am and not 3am. If it works don't fix it! I believe each session has it's own personality and if an individual trader can accept that within their own "personality" I believe they can step into this market at most any time during the day and trade profitably. But, there's always a BUT, I suggest focus on one session at a time and learn it well and as time allows study the others and get to know them,,,, baby steps.


There's talk of this market falling to 1.2500. That being said, if I can catch a few 20 tick swings during my time at my trading station I'm a happy trader. These charts are a bit after the fact but I believe they're helpful in validating what this thread is all about. And a bit of fun too.

Just a bit outside of BOTH the Sell Number at the High and the Buy Number at the Low, (when this Snip was captured). Notice the rotation around the Pivot and previous support on Yesterday's 50% Level,,, or 1.2850.



When support gave way, there were more than a few possible targets down below.




I'm getting ahead of myself here, but these are the numbers generated off the post I made earlier. The measurements from Low to High and such, forgive me but I will get back to that.

Cashish 

A Quick Review All the numbers we've discussed have the power to turn a market. The trend reaction numbers, BN, pivot SN, yesterdays O,H,L,C the prior day's O,H,L,C the H, L of the week, the contract H and L all these numbers need to be identified and respected. @lemons surely made that obvious with his excellent post. There are more numbers of course, but I feel these are the Old School numbers struggling aggravated traders must be aware of. That's the point of all these exercises, to become aware of price rotation around these price levels from yesterday, 2 days ago or a week ago. Another significant bit of data I can take away from all this is my markets average/normal size of rotation. If prices are rotating around a whole number unimpeded by yesterday's close or today's BN chances are the range will tighten up quicker, and leave the area sooner, in search of the next level of consolidation.

Sitting on the low of the last contracts low

-Bill

Last evening, I devised a similar game plan to my previous post. I'll quote Cashish once again..."It's simple but not easy!" All morning, CASH basically stayed above the +1 SD. It's not rocket science or brain surgery. If it were, I'd be digging ditches!
I love it when a plan comes together. When it doesn't, control your risk!

emini

There's no School like the Old School

The Follow-Up

Cashish 

So here's the idea, take 4 measurements, (see below) and write them in columns, Rally, Buy High, Buy Under and Decline. The Rally number measures the distance prices moved from Low to High over a two day period. The Decline number measures the distance prices moved from High to Low over a two day period. The Buy High number measures the "penetration" of the previous high, the Buy Under number measures the amount of "penetration" of the previous low. These are the calculations, there's more to this but I had to start somewhere. The idea is a pattern will emerge, e.g., when price trades above a prior high this data will tell you on average over the the last (N) sessions price "penetrated" the High by (N) points/ticks. If, these numbers fall inside of another study you may have like an average range, then knowing the "average penetration" of the previous high may be beneficial to your trade. I made two little diagrams, the calculations are exactly the same on each. The reason I made two was to show how these numbers would look in a rising market or a falling market. I'll post more on this as time allows, this is just a starting point. 1. Rally, Today's High minus Yesterday's Low 2. Buy High, Today's High minus Yesterday's High 3. Buy Under, Yesterday's Low minus Today's Low 4 Decline, Yesterday's High minus Today's Low

I've been trying to get this posted before the FOMC Minutes and "Ben's" speech. I find these numbers often stop Rallies or Declines in the aftermath of news, we'll see if they prove themselves today. When doing the calculations above the first thing you may have noticed was if the last High did not exceed the previous High the BH number will be a negative number. The same is true for the Buy Under (BU) number, if the last Low did not exceed the previous Low the BU number will be a negative number. These 4 calculations are made over a three (3) day period, this will return a three day average of the four numbers.

After accumulating a three day average of these four numbers they are moved to anothercalculation.

• The three day average of the Rally Number is added to Today's Low.
  The three day average of the Buy High Number is added to Today's High.
  The three day average of the Buy Under Number is subtracted from Today's Low.
  The three day average of the Decline Number is subtracted from Today's High.

These numbers will define an area in the market that resistance may occur based on the average price movements I've described previously.

But wait, there's more. At this point these calculations offer two price levels above and two below. The last step in all this non-sense is to take the TR Sell Number, Yesterday's High, the Rally Number and the Buy High number add them up and average them by 4. The same is done with the TR Buy Number, Yesterday's Low, the Decline Number and the Buy Under Number. This will return a number above the market and another below the market. I go one step further and find the mid point between these to numbers.

I've always done these calculations by hand each night. But for the purpose of this post and with the help of a couple nexusfi.com (formerly BMT)'ers I gave up my "Old Skool" ways and put together a simple spreadsheet, with the idea it may be easier to follow. Here are the Numbers before the FOMC Minutes and Ben's speech, this might be fun.

There's no School like the Old School

BAM!

I feel like I have to throw my hat in the door and write something here. The truth is, this is how this market moves. We can all armchair quarterback this morning and listen to the talking heads and subscribe to any belief we chose, any belief that fits our individual belief system. Was this a response to the FOMC minutes, Ben's speech, Mario's comments or an old fashion short squeeze, pick one if it will make you feel better. I don't believe many traders saw this move, with this magnitude coming, these are the moves that make Heroes and Zeros out of traders. FWIW, I will say, the lesson may be control your risk.

Above I said this is how this market trades, what I mean by that is big moves are most often generated by news. This was a big one that's for sure but the market will find an equilibrium and get back to "normal" at some point. This move brings up many topics, I'll touch on a couple in this post. Taylor viewed the market as continuous, his Book Method was not concerned with Holidays, weekends or news. I like this view, although he was a grain trader for the most part I believe this view still makes a lot of sense in today's markets. His measurements although a bit different from what I've outlined returned a similar view of anticipated moves.

It should be of no surprise these back to back 200 point ranges that fall outside the "normal" range for the 6E are going to screw-up these calculations for a day or two. Remember, the calculations I've outlined are a piece of the puzzle, when they need time to re-calibrate themselves I have to depend on other tools to get my bearings. The "go-to" method for the most part (for me) will be rotations around and between whole numbers. This was a huge move that wiped out almost 15 days of price action, within a few hours,, very rare.

I think it's anybody's game at these levels, I'm looking for fast short moves of 14/16 ticks in either direction at any level, and especially mindful of the Late Shorts getting squeezed. If you have to play, keep an eye on risk.

Thanks Cashish for all your hard work

BTW if I chime in with something you feel inappropriate please let me know

+++++++++++++++++++++++++++++++++++++++++++++++++++++

Regarding my M5 chart above that has the opening bars marked at each hour,,,,,,

I've noticed that for some reason (don't really care, it is what it is) the 0400am est will be a continuation or reversal

Cheers

-Bill