Advanced Chart Lesson: Emini S&P Jan 17 to Jan 31, 2014 Waterfall Formation (Part 2)
By LawrenceOverview
Before we engage the market in real-time, we have to be aware of the various potential scenarios. Daily chart analysis from Part 1 provides us the big picture setups while day-to-day trading do not often trigger these powerful setups. Hence homework on the intraday timeframes has to be done so that we can engage the market with high precisions at the price levels closer to where the actions are.
Lesson Requirement
- familiar with basic chart patterns
- basics of the complex patterns
- know the multiple timeframe principles
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Comments
Many thanks…. more plz !
Great post LC! May I ask, what % of your daytrades would you say you enter within the first 5 mins of market open?
You ask the right person who keep track of everything. =)
About 1/4 of the openings I can put on my first trade within minutes.
Actually is there any guide as in when to engage the market in intraday? I mostly always base on 1 hour OR, maybe its too late?
It depends on what you look for from the day.
You need a distribution analysis on the range expansion expectation.
e.g. first hour is usually how much relative to the rest of the day
If it eats up too much of the range you will not be comfortable to trade from there.
LC you have the daily timeframe analysis and then now the M5, is the main timeframe next?
The 5-min is used to make the it scale better so that you can see the range for the next trading day more properly.
It does not matter whether you use 5-min or 15-min. The goal up to this lesson is to prepare yourself for what is possible the next trading day. Thus you want to find out all the chart patterns having an extended influence on the next trading day.
My main timeframe for real-time engagement is … written in my FAQ,
https://www.daytradingbias.com/?p=564
I sometimes wonder if paying attention to the big picture does more harm than good. The Hang Seng did a large drop on the daily chart for about 2 weeks but most of those days were either up or heavily sideways. Most of those days were very jittery and fast during the first 30mins of stock market open. Most of those days lacked follow through with the trend. If instead my focus was more on the current day dominant order flow I wonder if my trading opportunities would have been better.
I ask this with sincerity, as I have long been a fan of framing my trade ideas within the big picture but these last 2 weeks really irritated me as I feel that still should have been able to make good day trading money but failed to.
With kind regards,
MK
Notice the difference between just paying attention to the big picture and paying attention to the chart details. What I look for are,
1. potential point of no return on the chart that I have to ignore the intraday setups.
2. Interference from higher timeframe on my intraday chart so that I know when to expect swift actions (when they align with each other) and when to expect sideway and messy actions (when they do not align).