Market Discussions

You specifically asked for it a few post ago, remember?

Here I am, a "less than believer", and I am still not convinced by your vague and hedged statements. "I don't even recall how long ago" - indeed you didn't recall how long ago and I had to point out to you that it was way less long ago than you thought.

As I said this is nothing but an exercise in confirmation bias. Again you're posting a whole lot of 'hits', counting anything which happens near a BRN - doesn't matter if it's a wick or a bar or if it hits the BRN or passes it or just comes near it. The "Bullish Flag" isn't even near a BRN and it has the biggest arrow for some reason!
I can see how easy it is counting hits that way. You're basically taking a machine gun, shooting it a barn and then drawing the target on the side of the barn after you shot. "Look at all these hits!"

If by "vague" (don't know what "hedged statement" means so I'll skip it (**)) statements you intend having tried to explain it including the very copy and paste of the text I use, then I am sorry, I will try better in this reply. If trading was about doing hard and sharp math then we'd have millions of billionaires. It isn't.

The thread's Readers have to thank you again, because I am going to post a lot of practical, didactical stuff that they will find useful.

(**) By the way I am still waiting for your reply about why you "made me mark" as BRN a static monthly line that was clearly marked with "M".

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In particular, I'll try to describe the whole process behind a trend line so you can label it as vague again:

1) What's a trend line (TL)?

From Investopedia:

A line that is drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trendlines are a visual representation of support and resistance in any time frame

From Wikipedia:

A trend line is formed when a diagonal line can be drawn between two or more price pivot points

These paragraphs tell that:

- Two or more points. Which by vague and hedged statement is the same of what I have written in my copy and paste.

- They are used to "show the prevailing direction of price".


2) Why are trend lines important:

"The trend is your friend" is one of the eldest yet most important mottos for a trader. Going against the trend means many things (most are negative) and trading against the trend is bad advice and needs WAY too many precautions, I (and many others) just don't do it.

Therefore it becomes important to find out if the trend is bullish, bearish or none. There are many ways to do that but one of the simplest is to find two or more "pivots" and connect them with a line. The "pivots" usually consist of bars minimums / maximums. Often times - it happens "naturally" for a market - those tell-tale bars happen at swings minimums and maximums.

3) How to use a trend line:

- You take a chart

- You look for price general direction

- You look if there's some swing or bars sequence that "catches the eye". it HAS to be quite obvious else it's not going to work. In my case I spotted a sequence of 10 weeks (10 bars) that would also match a corresponding upper trend line, forming a channel (here is the May 2012 picture). Yes I did not fully draw the TL down to the bottom as it's pointless if not harmful (as I said in a previous post, older stuff should be limited / removed to prevent clutter and confusion).

- Now you zoom out (so much for your desire of precision) and look if what you found looks "obvious and convincing" (yeah, so much for double precision math as well ).

If it does, then you are DONE with the TL.

Did I mention the goniometric measured angle? No. Because it does not matter.

You want to know if you should buyORsell. It's that simple.

Only AFTER this step, you go to the daily chart and notice how the TL does not even pass close to the bars, or cuts through them or worse. Why? Because of the change-time-frame + platform imprecision effect I mentioned in another post.

What do you do, now that you know your revered precision is an empty chimera?

- You are advised waiting for further points to refine the trend line.

- You MUST perform an analysis that does not rely on the trend line exact location AT ALL. Diagonal levels are vague, imprecise (see reasons above) compared to horizontal ones, so they have two uses (3 counting money management, but that comes after the trade has begun):

a) To determine the trend, as I have already said.

b) To provide an additional information or confirmation. That is, they are really nice to see in conjunction with other price phenomena. Also known as "confluence". Read here for a nice, simple article detailing several concepts I described so far plus confluences.

Therefore your whole "but it's not exact angle" etc. etc. is not altering the analysis. The analysis can and should be done without relying on an exact TL location. Because it'd be prone to errors.

Even when you are really confident on a TL and it really looks "sharp and clear, can't place it anywhere else", by doing enough practice you'll discover how price rarely honor TLs with good precision. Like horizontal levels, diagonal levels represent a battle and that battle results in a "cloud" / distribution of bars around and approximating the level.

(continued...)

Having fixed EvEMarkeHistoryDump to work with the latest client. I can focus on new analyses.

In fact, a lot of you have contacted me via mails about some items you want to know about before the next patch, I'll try posting some analyses as I get the time to do them.

Moreover, there are some nice news: as you might know, I am creating my analyses working on charts created on a professional charting RL platform whose details I have posted on my website. I don't want to talk too much about it on these forums, because it could be seen as some form of advertisment.

Anyway, the last update that platform got, was in 2011. Not just that, the old release is only available as a 32 bit application. It's a "dead software" now, which is not a Good Thing.

However, the platform developers have announced a new freeware version of it, available both as 32 and 64 bit flavours. It has a stringent limitation though: since it's a real time plaform (the old one was "end of day", which for EvE is enough as we only have 1 bar per day) they had to limit it somehow, otherwise nobody would shell the lots of money it costs

So, they limited the amount of securities (in EvE jargon: items) that may be managed at the same time to just two (2).

Of course I have found a fairly ugly but somewhat functional workaround to that, therefore I and you shall be able to do the analyses anyway, just with some "symbols juggling".

In the next days I will post a fully illustrated tutorial on my website to show how to get the newest platform, how to upgrade your data, how to not lose anything and how to still see the analyses loaded despite the limitations.

As soon as I'll post the first bits of that tutorial I'll notify all those who are subscribed to my Twitter account.

Thread unlocked so OP can update it.

Multicharts is no longer a free program. Is there another program you'd suggest?

I believe I've got it. Just need to follow the rest of the tutorials. Looking forward to this because I love technicals! Looking forward to future conversations on this.

Here it goes.

A little Nitrogen Isotopes market analysis to warm up.
Actually I should warm up with something more appropriate than Caldari ice, I really do.

Do you mean "technical analysis with indicators"?

If so, I am writing an article just for you about how to add them starting with my setup and software.


P.S.

Thanks to who provided feedback and helped me spot a web page issue with the analysis I posted yesterday!

In a couple of weeks I might introduce a new, major chapter to this experiment.

A simple yet advanced technique to trade the markets without major analysis technicalities, without the need to wait for perfect price action patterns. A simple technique that allows to easily understand the buy vs sell orders pressure.

I am going to backtest it first, to see if it works in EvE as good as it works in RL markets. If it does...

It does, I actually teach it in our gs_isk jabber. Or parts of it.