In the quest of this P&L student to grasp flow I offer this observation.
It seems that the nearbys of the focus period offer me a clue regarding flow. If the SIZE of nearby resistance in the focus period is larger that
the SIZE of nearby support in the focus period, then (generally) it seems that price will flow into the larger sized nearby. Of course, the reverse
seems true also.
It seems that if a nearby is small, it is as if it is compressed and stronger resistance occurs pushing the price into the larger nearby. At times when the price breaks through the smaller nearby, it seems to lead to termination.
So perhaps one way to think of this is that the water will seek the larger container.
Am interested in your thoughts, corrections or comments.
D.G.
Focus Period and Flow
Re: Focus Period and Flow
Thanks for this, it shows an active mind and a seeking intelligence in search of that further edge to make you trading even more successful.
If you observation is correct, the in an uptrend we would see on balance many more larger nearby resistances and more narrower nearby supports, and the reverse would be true for down trends. A computer study would verify your hypothesis but a strictly visual observation leaves me uncertain as to the validity of this idea. See attached graph of monthly nearbys. This is not to say your idea has no usefulness, but it would take more definitive study to find out.
The nearby's are created by the shifting levels of PL lines, of course, and what has always seemed to me to be very definitive is the way the nearby's shift towards, that is, closer to, the pldot, as the market nears a turning point.
If you observation is correct, the in an uptrend we would see on balance many more larger nearby resistances and more narrower nearby supports, and the reverse would be true for down trends. A computer study would verify your hypothesis but a strictly visual observation leaves me uncertain as to the validity of this idea. See attached graph of monthly nearbys. This is not to say your idea has no usefulness, but it would take more definitive study to find out.
The nearby's are created by the shifting levels of PL lines, of course, and what has always seemed to me to be very definitive is the way the nearby's shift towards, that is, closer to, the pldot, as the market nears a turning point.