thread: Price Attraction Points

Practically each trading system/method/approach I have seen, read or heard about is predicated on locating a Reason for Entry.

Its a trend line or s/r degree, its a moving average or a momentum indior, its a harmonic step or a fibo or a fibo confluence, its mercury crossing venus, its an airplane in the night sky like a shooting star (save your fantasies for afterwards ).

So when the Reason presents itself, we accept entrance, wait and hope.

The trade has a profit goal or exit rule. A trend line, a s/r, a moving average, a fibo extention, a box projection, a bollinger band, a heck that'll do I will catch it today etc..

However, does the trade (price) possess a Reason why it must reach that exit price level? Are there points on a chart that act as?

(This is the reason why you hold your breath after you pull the trigger.)

If there are, and if we can recognise those, this approach would turn trading on its head. Why? Because you would trade according to a Reason for Exit, rather a Reason for Entry.

I have an awkward habit of above compliing the basic, so by means of example consider the following:

in the event that you knew the euro would attain 1.60, rather it must reach 1.60, you would buy and wait. You would not panic if the position was contrary to you for a while (time aside), because the price must visit 1.60. You would not panic if the position was contrary to you a few hundred pips (leverage aside) because the price must visit 1.60.

That is to say you would take a trade predicated on having decided an exit price, instead of an entrance price.

An example of this approach is gap trading where the assumption is a price difference will be filled and so the level is targetted til it's.

But I needed to ask about price action. Are there market arrangements, wave arrangements or candle stand patterns which bring price? (Such you will always see price returning to all those levels.)

I've some thoughts/observations, but am keen to hear your input and watch your illustrations.

(if you would like to talk about this offline. Just send me an email or ping my skype.)

So if I understand we are awaiting price to back to quad and following that trend continuation? Am I correct?

hello will.

Is this a quad?

ps. I have sent you some email.

What interests me is that do price structures form where price'must/will' return liberally rather then'is likely to';

I really don't feel that you'll ever be able to say that for sure. Basically, that would be stating that the market has to return to re-load, drawing on the liquidity that's presumed to still be there, in order to continue . That is, of course, regular process under perhaps most requirements not for sure. Market orders may return flooding in leaving preceding trading amounts in the dust without even pulling them back at all... or at least not soon enough to prevent some quite punishing drawdown.

Just my two cents!

Hope everybody has a great weekend!

Interesting thread. The situations I'm most familiar with where price could be attracted to certain points are in the context of market profile and quantity profile.

The market profile people have something called the 80% rule that says that after price enters a worth place to a certain extent it is likely to finish traversing the worth place. Additionally, Virgin or Naked POC's (purpose of control) seem to get a greater than random prospect of being revisited by price, as do gaps.

On a volume profile, the HVN's (high volume nodes) are seen as price attractors. It makes sense that the areas where the most volume is traded and where the most traders found worth would be revisited over and over.

I'm sure you realize that there is not any such thing as a place where price'must/will' return definitively rather then'is likely to'. The best you can possibly do is locate a'likely to' situation where there's a positive expectancy (chances ) of creating a profit. I don't doubt that these areas are available. To seek certainty, however, is to deny the part of randomness that's a characteristic of those markets. The market is made up by thousands of humans, and there is no way to know for certain what those thousands of people will do.

On a semi-related notice, one indior you may be interested in is your TopFinder explained here: http://midasmarketanalysis.com/a-2/. While it doesn't tell you which point price will reach, it will estimate the minimal distance that the current movement should continue, based on its volume and velocity.

I would agree with the post above and recommend Market Profile theory (someone earlier contained a MP chart) to get regression trading. The theory is based upon identifying in which the market is attempting to transact trade. Your Quad BO regions would appear as regions of high transactional volume.

I've some thoughts/observations, but am excited to listen to your input and watch your examples.

Broadly speaking, I have read about two kinds of exits:

1. The faculty of thought that entrance is mostly unimportant, and consequently that an edge must necessarily come from commerce administration. This usually entails a egy of cut losses short, let profits run, and possibly pyramiding. As I see it, this relies on the belief that the length of every (anticipated) movement is indefinite, but that the trader has seemingly satisfied himself that sufficient large RR wins happen to more than compensate for the frequent losses resulting from sideways movement. This is akin to the'trend following' school that has been made more, and popular by the likes of Michael Covel by the turtle traders educated by Richard Dennis and Bill Eckhardt.

2. The opposing school of thought appears to involve what I would call'tactical' exits, that involve taking profits (or restricting losses) at areas perceived as providing a higher-than-normal likelihood of change. This will entail the'price attractors' that you talk about, even though the areas that I've read about (and sometimes use myself) incorporate confluences of distinct S/R types, obvious supply/demand regions, volume spread analysis, and possibly what is broadly termed'orderflow'. In other words, depart points where a preponderance of conflicting orders are most likely placed, that will serve to overturn the momentum of this current movement. I clarified this in detail here.

Given that there is supposedly no structural bias in the FX market, and that the market takes no cognizance of if one immaterial retail trader is entering or departing, these regions of potential change may be equally applied to both entrances and exits. Moreover, if people take the view that both entrances and exits do nothing more than adjust our web position (long, short or flat), then that becomes much more plausible. This is in response to your comment when we can recognise those, and If there are, trading would turn on its mind. Why? Since you'd trade according to a Reason for Exit, rather then a Reason. Much the very same reasons for entrance might be used for exit.

3. There may be other kinds of exit, e.g. a statistical scaling out as ordinary daily ranges are attained; time-based exits; and so forth.

Anyhow, I would definitely want to find out more about your own'price attractors'. Please continue...

Hey Dave need your opinion to find out whether it is possible to find a fault. . 200 trades. .1 small loss in 6 mo's. Password to live account created public, account doubled monthly. . Have you ever heard of it? . .not doctored.

Support and resistance isn't used at all.

Thank you for your responses.

Perhaps to illue using a practical example.

Should you exchange patterns you will be familiar with quad formations.

I've noted that after a quad break out, price yields to the quad, following you have a swing back into trend, then continuation or alteration. So quad would be a price attraction stage.

To date I've seen this with every quad bo. I would enjoy a look at, if any one has an instance where it failed.

IMO --

1' instance at 06302010 13-1700 (CMS broke r time).


Also found minor ex's that supported.

Pattern neglect --
I figure it is how you specify the pattern. Your chart example reveals four different price clusters at two types of places -- A pivot ending the previous range and at the center of the following range and then three pivot turns (bypassing one) that are in a range.
A little observation says a three-point box or a box with two of those pivot nearly attached to each other would be minor versions, and such a variation at a seemingly fine box may neglect. Where one of the four things is too vertical or horizontal, A fail could be. A appearing fail that really works is a two-bunch box bo that is more vertically- or horizontally-defined, such as at 14-1500 05122009 (forex.com broke r time).
To stay away from any types of big-pattern failure, I elect for small, partial contours more easily identifiable and drawing-attachable.

Multi-high(low) box and other variations of a box bo --
I typically bulge such an area for a box bo with different pairs of bunches balancing on either side of a drawn line. I dropped the idea quite a while ago, since midlines such as this using a pair of bunches, jumps price afterward in erratic ways. Its reliability is increased by logarithmic jumps off the sides of a line.
Your more advanced form, keeping the box in 1 place and well-defined, does appear to keep price regular sufficient to trade on.

Locating an ellipse edition of your own box bo would be fine.

Not certain if the quad bo example is valid (though I'm no expert). Comparing the examples however, they do seem different to me. The fist one by ppants resembles exactly what I'd expect a quad bo that is vaild to seem like. The one published by maybe not. I c a bo in the box, not the box that is fourth. The return into the fourth box for me looks more like a return to consolidation ahead of the more proceeds in the direction of the bo (first white arrow.