Envelope question

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Trader Question
Posts: 709
Joined: Thu Oct 09, 2008 7:31 am

Envelope question

Post by Trader Question »

As I observe the activities of the market, and watch the price action approach the dots/top envelope/bottom, there are many times when the trade on the screen looks great. It appears as if the price action has sold/bought off of the dots, etc. But acutually, they are not really touching, but many times are almost a whole point away. (See 27 minute S & P chart, DSP9Z, today, 2:00, 2:27 and 2:54. All of those look as if they are sell off points, but the market never really touches these points.

I am aware of the fact that you can make the envelope thin and visually see that it isn't touching the dots.

Question: Do you wait until it actually hits these points, or is it a fact that many of the trades that you think you have by visually viewing the chart, are actually no trades at all? Will this be covered in future lessons as to actually entry points and whether or not you have a "zone" to take the trades, with not a particular price in mind, but more of a general price area?

I am making progress. I will through less 11 by this evening. You have done a great job in this presentation. If I have a fear, it is going through the lessons and then discovering some flaw that makes the entire process untradable.

TJ
pldot
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Posts: 779
Joined: Sun Apr 27, 2008 10:52 pm

Re: Envelope question

Post by pldot »

=====Yes, we do not necessarily hit the exact tick (though often this does happen). We will deal with this issue in future lessons... basically you have to determine,,, is support (for example) holding on the lower time period bars... and are we in a place where we expect that to happen in the HTP. The upcoming "nearbys" and "further outs" will establish some zones that will be helpful I think...(Lessons 16-20).

===There is plenty of theory ahead, so batten down the hatches. When you are through Lesson 15 you will have all of the fundemental theory, and will likely be overwhelmed by it. But keep on trucking and by the end it will all become much, much simpler. I do not think you will find a conceptual error that makes it untradable, though it will take you a bit to get to the full usefulness of the theory.

Just remember: Lessons 1-15, learning to read the roadmap. Lessons 16-30, learning how to drive the roads.
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