What’s the Right Trade? Answer
What’s the Right Trade? Lots of good, solid analysis to the intraday chart problem posted late last week in What’s the Right Trade Episode #2. I think this is a nice way to help yourself learn this method, not only by challenging yourself, but also by seeing how others approach their analysis. Lots of good work being done here!
Here is my take on this week’s What’s the Right Trade and how to approach assessing a market like this. Note particularly that heavy downside volume around 11:00 ET became highly significant as the market unfolded. In this episode of What’s the Right Trade, we focus on high volume that might not be understood at the time, but becomes key to how we analyzed the market as it unfolded.
What’s the Right Trade: Point & Figure
In this week’s What’s the Right Trade, we also, we show how the Point & Figure chart can be used to great advantage. This is a sort of bonus for the members in the recent P&F course. We discussed how to combine P&F and price bar and volume charts for a real advantage quite a bit in the course. This is a very good example of how understanding P&F and how to integrate it with our trading chart can pay big dividends.
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Hi,
Thanks for the exercise. Eagerly waiting for next “whats the right trade?”.
How do you decide the wave size is it just by eyeballing or something else?
Regards,
Nitin
There is no “right” wave size. We’ve used 0.75 in the S&Ps for almost a decade, but that originally came by trying different reversals and seeing what works best. It isn’t perfect, but once you decide on a reversal and work with it for a while, it becomes yours. That’s really the hallmark of a professional –we don’t need something outside of ourselves that tells us everything at all times; we instead learn to work with something that is highly useful, learning how it performs in different conditions, understanding its nuances, etc. That’s when it becomes your own and a part of you.
Excellent analysis.
Wave size increasing to the downside as it approached the demand line, something I havent considered before, price bars, but not the waves. Looking forward to deep practice and the next quiz.
Will