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Re: Lesson 25
Posted: Tue Oct 07, 2008 9:37 am
by Trader ???
Another Q.: Lesson 25, video 1.10, screen 199, it says: "On Tuesday, nearby daily support pushes the pldot or envelope top (hard to see) and this comes out of the nearby weekly support, thus our trader is alert." But if we look at it, even on Monday, we had the same situation, daily nearby support was coming at daily ET and in weekly support which has also at weekly ET. So, why did trader short on Monday? The way I see it is: last week was exhaust in weekly further out resistance in monthly resistance, so we anticipate weekly nearby resistance to become strong and push prices down. Fine so far. BUT, weekly nearby support is at weekly ET which could be strong or weak. So, we go to daily. Daily on Monday shows daily support at daily ET, which means weekly support is likely to be strong because daily is also strong. So both daily ET and weekly ET are pushing up. To me it looks like a NO pattern for strong weekly resistance. What do you think? H.B.
Re: Lesson 25
Posted: Tue Oct 07, 2008 9:46 am
by pldot
As I see it, I would have likely tried a short on that Monday due to the weekly nearby resistance; the reasoning is not flawed for this trade but then again it is not the strongest configuration I have ever seen for a short set-up. Nevertheless, it would have been the next logical trade in my eyes. However it did not develop and so given the also reasonable alternative scenario I would hopefully have been quick to exit that trade and reverse.
Your reasoning presents an alternative interpretation that is plausible and had you followed your reasoning and taken the trade you not only would not have been wrong, your trade would have worked out very well. Such is life; we're not right all the time and knowing what to do when we're wrong and making quick and appropriate adjustments is key.
Re: Lesson 25
Posted: Tue Oct 07, 2008 9:50 am
by Trader ???
Well, also my alternative was based upon hindsight and probably on my hidden desire of having every trade work out 
, which of course does not happen. H.B.
Re: Lesson 25
Posted: Tue Oct 07, 2008 9:54 am
by pldot
Yes, of course, well understood and no shame in that. We're all better off if we perfectly reflect probability thinking but it is hard to do that all the time.