Tuesday, September 22, 2015

Waiting for chop to end


The day opened choppy from b1-8. From b8-11, bars suddenly had strong closes and shorter tails. This is a sign that the chop is ending.

When the chop ends, the initial move can usually be faded. In today's case, the initial move was a continuation up, which resulted in a large down move. If on the other hand, the move had been down, we would probably see a trend break up
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6 comments:

  1. TDSeptember 23, 2015 at 9:25 AM

    Hi Cad,
    for the 1W on b15, did you reset the count on that b4 OB?

    ReplyDelete
  2. TDSeptember 23, 2015 at 9:46 AM

    "When the chop ends, the initial move can usually be faded. In today's case, the initial move was a continuation up, which resulted in a large down move. If on the other hand, the move had been down, we would probably see a trend break up "

    Is this theory based on the "magnetic pull" of the chop/OL? Price gets pulled back into the chop/OL.

    ReplyDelete
    Replies
    1. cadaverSeptember 25, 2015 at 5:23 AM

      I prefer to think of it this way: A chop is caused by balanced buying and selling pressure. The further you move from this point in both directions, the pressures should be increasing. Any movement away from the chop should see a significant increase in counter-direction pressure.

      Delete
  3. UnknownSeptember 24, 2015 at 9:31 PM

    Hi NT,

    I saw that you have been using ninjatrader and trading from chart using the line technique to place entry, stop and profit orders. Is this something that is available by default or you developed it? I am trading from India and I think something like this will massively help me.

    Thanks in advance.

    ReplyDelete

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