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Thread: Price reversal points

  1. #231
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    Hi Mike

    In Channel Surfing, Parsons covers the situation you raise about conflicting lines in chapter 7 (Multiple Times Frames).
    He makes a key point in saying he actually means timespan. In short the line which has been in place the longest is the favorite to win the argument. For example a BP generated off 3 days of price action is unlikely to blow out a channel top/bottom that's been in place for weeks. So multiple time frame is not just daily/hourly, hourly/5Min, but also timespan on one chart zoomed right out. Think seeing the wood for the trees.

    Regards

    Steve Parsons (Still No Relation)

  2. #232
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    HI Steve,
    I'm liking your sense of humour I must say there was a certain tightening of the rectum sphincter at your first post!

    I presume you're referring to his book (in the post) and I appreciate that a trend line from higher TF points has more clout than that using a lower TF. So that means that the lower TL from the troughs of swings way back when are stronger than the more recent balance point projection. This means that a probable downturn in price off the Kiss Goodbye turn-up of price off this longet term TL.

    Many thanks,

    Mike

  3. #233
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    Thats exactly right Mike. Wait for the kiss then drop down to 5Min chart, draw trend line, and go short on a break.
    This allows price to confirm your thinking and lowers your capital exposure because of the smaller 5min channel.
    Of course both lines can be correct in the very short term so keep that in mind. If I was a scalper I may well take your BP trade. If I am a swing or position trader, no thanks. Kolapo is right about cot if you are a position trader. For day traders its irrelevant because its a blunt tool from a timing point of view and has no effect on short term price movement.


    Quote Originally Posted by blott View Post
    HI Steve,
    I'm liking your sense of humour I must say there was a certain tightening of the rectum sphincter at your first post!

    I presume you're referring to his book (in the post) and I appreciate that a trend line from higher TF points has more clout than that using a lower TF. So that means that the lower TL from the troughs of swings way back when are stronger than the more recent balance point projection. This means that a probable downturn in price off the Kiss Goodbye turn-up of price off this longet term TL.

    Many thanks,

    Mike

  4. #234
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    Hey Steve,
    question for you on channel surfing.

    When drawing the outside channel line, I understand that when only one high/low point exists on the outside we simply duplicate the inside channel (which should already have at least two point connected) and place it on the lone high/low point on the outside.

    My question is: How long do you keep this "estimated" outside channel line? Do you draw a fresh "real" line as soon as a new high/low is established on the outside- connecting the two points which are now available? I have just seen Parsons use the estimated line in some examples even when there are two high points available on the outside- which caused me a little bit of confusion. I always thought that the shelf life of the estimated line was only until a second high/low is established but now I am having seconds thoughts on this. Would you please share your thoughts on this issue?

  5. #235
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    Hey Duggils,

    You use the initial two point channel as a template for the opposite side of your potential channel as you said.
    If two new points then appear then draw a new line through them. THIS NEXT BIT IS VITAL, is your new line at the same angle as your first line? If so, then your new line may just be a midpoint and may then travel to your estimated line.
    Your estimated line still stays in place until the original line/channel is broken in any case.

    If this is not clear then tell me and I will restate.

    Regards

    Steve Parsons (Starting To Feel Like A Relation)

  6. #236
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    Quote Originally Posted by SMPFutures View Post
    Hey Duggils,

    THIS NEXT BIT IS VITAL, is your new line at the same angle as your first line? If so, then your new line may just be a midpoint and may then travel to your estimated line.
    Your estimated line still stays in place until the original line/channel is broken in any case.

    If this is not clear then tell me and I will restate.

    Regards

    Steve Parsons (Starting To Feel Like A Relation)
    Really appreciate it if you could please restate the highlighted part. Also, what is the purpose of keeping the estimated line even after you get two points? Do you consider partial exits when the nearer line is touched?

  7. #237
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    Quote Originally Posted by duggils View Post
    Really appreciate it if you could please restate the highlighted part. Also, what is the purpose of keeping the estimated line even after you get two points? Do you consider partial exits when the nearer line is touched?
    Steve, I do get what you mean by the second line being the midpoint now that I thought about it a few seconds. So please ignore that part- you don't need to restate.

    But how do you react when this new center line is touched? Watch PA and act accordingly? My other question is, what if the real original line is not the same angle as the estimated line? Do you then discard the estimated line?

  8. #238
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    Hey Dugg,

    Yes I will take partial profits at the point you suggest.

    Sending you a private message with a chart to answer the rest of your question.
    Mike I will cc you on the same chart.

    Steve

  9. #239
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    Thank you Steve. Muchas Gracias!! Awaiting your PM.

  10. #240
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    Price reversal points

    hi blott,SMP futures and duggils, i resolve these issues of directional change when we have 2 balance points with COT or sine wave directional change,if i get more buyers than sellers, its clear market will change direction, if i still get more sellers than buyers i know its a continuation to the next levels using the gap.Note the Ms and the Ws on higher time frames as the neckline represents structural points ,when broken confirms directional change as well.happy trading

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