Unity is strength... when there is teamwork and collaboration, wonderful things can be achieved. ~ M. Stepanek

Transcription

1 Fluidity Trader Chat Room w/cynthia E. - Wednesday, December 12, 2018: Page Begin Page End Chat Roll Time Wednesday CENTRAL Time Zone 6:30 *** Hello Fluidity Team Traders Welcome! *** 6:30 *** DAILY TRADE TIP *** *** Unity is strength... when there is teamwork and collaboration, wonderful things can be achieved. ~ M. Stepanek 7:01 JerryH: GM All 7:28 Saffa: gm 7:55 chicky527: gm all 7:56 Deni: morning team 7:57 Crosseyed: Good morning, all! 7:58 MikeS: Good morning! 7:59 tsurf: Good morning all 8:02 MB: GM traders 8:08 Andy: gm, more panic buying ;) 8:11 Cynthia E: Good Morning Team! 8:11 tsurf: gm Cyn :-) 8:11 Cynthia E: Before we get started, Crosseyed just brought it to my attention that there was an upload error last night on the Market Wrap Up and Chat Roll. 8:11 Cynthia E: I assigned a review of yesterday's chat roll as homework for today's lesson, and then it didn't upload, my apologies. 8:11 Crosseyed: Thanks, Cyn. They're there now 8:12 Cynthia E: When that happens, please send me an as soon as you know so that I can fix the issue. 8:12 Cynthia E: Thanks! 8:12 Cynthia E: Alright! 8:12 Cynthia E: Great Crosseyed - glad to hear it! And Thanks for the alert! ;) 8:12 DRich: GM! 8:12 Cynthia E: Let's get to the charts! 8:17 Cynthia E: See Chart on Next Page: 1

2 8:17 Cynthia E: Overnight inventory is net long and price is set to open near the YH to test an upside breakout from the YH/YL balance. 8:18 Cynthia E: Meanwhile, the overnight rally also has price back in the middle of the prior 2-day balance headed toward the retest of

3 8:18 Cynthia E: That said, as usual, with overnight inventory net long, we will monitor for any long liquidation move to adjust that overnight inventory, and whether that move holds support at the POC/YC, or whether we fade with weakness again like yesterday. 8:19 Cynthia E: If the overnight inventory is ignored, and price advances immediately, then we may be seeing a new surge of interested new buyers. 8:20 Cynthia E: 8:21 Cynthia E: On 14400, we can see that the upward drive in the overnight range continued yesterday's recovery with a higher high above the M period swing high, so we need to see if this pattern continues, or if we run out of steam again this morning and resume the downside pressure. 8:21 Cynthia E: See Chart on Next Page: 3

4 8:22 Cynthia E: On 3600, we get an inside look at the waves within the overnight upward drive. 8:22 Cynthia E: We can clearly see the M period swing high on the left of the chart, the higher low at the close (when the overnight session started), and then the extension to new highs. 8:22 Cynthia E: Let's set up our levels this morning. 8:24 Cynthia E: See Chart on Next Page: 4

5 8:24 Cynthia E: Here are the starting points 8:24 Cynthia E: Our GREEN line at is NOT very strong right now. 8:25 Cynthia E: There is neither DEPTH or TIME in the current pull back, so while the GREEN line is valid - be prepared to manage the trade quickly if a more substantial retracement starts immediately following an attempt to breakout above it. 8:26 Cynthia E: Our POLARITY level from the bigger time frame is the M period swing high at :26 Cynthia E: With our RED line just below at :26 Cynthia E: PRIMARY RED is down at the ONL swing low at :26 Cynthia E: Okay! 8:26 Cynthia E: 4 mins to go 8:26 Cynthia E: Get set and ready 8:30 Cynthia E: Layla 8:30 Cynthia E: Here we go 8:30 Cynthia E: DO = :33 Cynthia E: Very small range open thus far 8:33 Cynthia E: Adding a little time here to the retracement phase 8:39 JerryH:. 8:39 Cynthia E: When you see action like this, the BEST thing about having a clear idea of WHERE your trade signals occur, is that waiting through retracements like this give you a rock solid idea of where to SOH (sit on hands), and to NOT take trades! 8:40 Cynthia E: This SAVES a lot of lost capital and frustration. 8:44 Cynthia E: While we watch the price action develop. Let's discuss Jerry's question from last week! 8:44 Cynthia E: **** Lesson **** The Development of CL ******* 8:45 Cynthia E: To understand how and why CL was developed, we have to reference the standard benchmark chart for MOST intraday equity, option, and even some futures traders. 5

6 8:45 Cynthia E: That chart is a 15 min bar chart, and the standard benchmark TREND indicators that are used by MOST traders on that chart are the SMA 20 and SMA 50 (SMA = Simple Moving Average) 8:47 Cynthia E: 8:47 Cynthia E: So here is the chart just mentioned. 8:47 Cynthia E: A STANDARD 15 min bar chart with the SMA 20 (dotted green MA), and the SMA 50 (dotted red MA). 8:48 Cynthia E: What we have observed over the years is that MINUTE charts do not do a very good job of revealing trend and trend waves. 8:49 Cynthia E: The time component within those charts makes the trend choppy, or makes it to where a wave in the trend is simply represented by large bar that might have WICKS on both ends. 8:49 Cynthia E: Rather than actually showing us the cycles and rotations. 8:49 Cynthia E: Due to that fact, we migrated to TICK charts. 8:49 Cynthia E: TICK charts are based on trades and volume rather than time. 8:50 Cynthia E: So not only do they smooth TREND into a nicer pattern, they also do an excellent job at representing TEMPO and PACE (aka how much volume is going through the market). 8:50 Cynthia E: On our TICK charts - the charts a counting TRADES. 8:50 Cynthia E: So on the 14400, when the counter reaches a new bar starts. 8:50 Cynthia E: So if volume is high there will be a lot of bars, and if volume is low, there will only be a few bars. 8:51 Cynthia E: So at the end of a day the simple count of bars is providing information on how much VOLUME was traded that day. 8:51 Cynthia E: NEW RED line forming at :52 Cynthia E: Careful of the M period polarity point just below 8:52 MikeS: Just thinking that 8:52 Cynthia E: So it took a lot of years and study, but the OBJECTIVE was to develop a TICK chart time frame that matched the 15 min as closely as possible. 8:52 Cynthia E: In the end the answer to that question was :53 Cynthia E: I was surprised actually that it took a calibration that high to get close to the 15 min (because most traders I knew at the time were using TICK chart calibrations of 500 ticks or below) 8:54 Cynthia E: So for our strategy - our KEY chart really isn't the 3600, it is the 14400! 8:54 Cynthia E: And that is BECAUSE it mirrors the standard benchmark day trader chart - the 15 min bar chart! 8:54 Cynthia E: From there - we were looking for an ADVANTAGE! 8:55 Cynthia E: Something that would provide us an EARLY signal BEFORE other traders watching the 15 min bar with the SMA 20/SMA 50 as their guidelines. 6

7 8:55 Cynthia E: Again, after much testing (back testing and forward testing) - the answer was achieved. 8:55 Cynthia E: The answer was an SMA 13. 8:56 Cynthia E: That was the calibration that tracked the TREND of the and displayed reversals to the BEST possible accuracy. 8:56 Cynthia E: And it achieved our goal. 8:57 Andy: time change 3m 8:58 Cynthia E: It achieved a FASTER indicator than the SMA 20 on the 15 min 8:58 Cynthia E: So to monitor for TREND - we are watching an SMA 13 on the :59 Cynthia E: So that is the real source or the underlying source of where the CL comes from. 8:59 Cynthia E: It is also the REASON we employ Rule 1! 9:00 Cynthia E: Think about it. 9:00 Cynthia E: If our SMA 13 on is FASTER than an SMA 20 on the 15 min bar chart, then we are getting notified of a CHANGE in trend direction BEFORE the rest of the market sees it on the 15 min. 9:01 Cynthia E: Therefore, if we get a retracement phase that DOES NOT cross the SMA 13, then it tells us we do NOT have a significant change happening! 9:03 Cynthia E: 9:03 Cynthia E: Here is an example from a week or so ago 9:03 Cynthia E: We have an example of a SIDEWAYS retracement, and then one of a DIRECTIONAL retracement. 9:04 Cynthia E: In BOTH cases the SMA 13 was never crossed with strength. 9:04 Cynthia E: That directional retracement there was about an 8 point move. 9:04 Cynthia E: If we were watching just very small tick charts it would be VERY easy to misinterpret a move that big for a complete market reversal. 9:05 Cynthia E: But by tracking a very SLOW tick chart (the 14400), with a FASTER indicator (the SMA 13), we can see VERY clearly there that TREND did not change. 9:05 Cynthia E: This was the absolute MOST important discovery made in the Fluidity Trader strategy along the way. 9:06 Cynthia E: It was THIS concept that helped me stop over-reacting to "small" market movement ("small" including moves of 8-15 points of range). 9:06 Cynthia E: If it is a RETRACEMENT, it is nothing more than that. 9:06 Cynthia E: And as TREND traders, we are supposed to trade WITH the trend of the day, not counter-trend to it! 9:07 Cynthia E: But to do that WITH success - we had to get out on a large enough time frame that a TRUE picture of TREND was really being shown. 9:07 Cynthia E: It took the with the SMA 13 to achieve that objective. 9:08 Cynthia E: So before discussing let's summarize :08 Cynthia E: TICK chart is our version of the 15 min bar chart. 7

8 9:09 Cynthia E: SMA 13 is our FASTER version of the SMA 20 on the 15 min bar so that we get information FASTER than other traders - an EDGE or an ADVANTAGE 9:09 Cynthia E: CL = Critical Line 9:09 Cynthia E: It is the blue line / white dot Moving Average always shown on the and :09 Cynthia E: CL = SMA 13 on :10 Cynthia E: So the SMA 13 we've been discussing is our CL or critical line. 9:10 Cynthia E: Fluidity Trader Rule 1 - Do not trade against CL - EVER! 9:10 Cynthia E: Do not go LONG when price is below CL. 9:10 Cynthia E: Do not go SHORT when price is above CL. 9:11 Cynthia E: The golden reason for THAT rule is that any retracement that doesn't AT LEAST cross CL is NOT a significant retracement (and it is DEFINITELY not a REVERSAL). 9:11 Cynthia E: Before we transition into are there any comments or questions from this point? 9:12 MB: none here 9:12 JerryH: no 9:12 tsurf: good here 9:12 Cynthia E: Phone call - just one moment 9:13 Cynthia E: Heads up - driving up to test :13 MikeS: All good here Cyn 9:21 MikeS: :21 MB: gj Mike 9:22 JerryH: wtg Mike 9:22 MikeS: Thanks 9:22 MB: wtg jojo! 9:22 JoJo: hi there 9:22 MB: sneaky thing you! 9:22 JoJo: smiley face 9:22 tsurf: took 1, tick away from +3 and may get it 9:22 tsurf: JoJo :-) 9:23 MikeS: Hey JoJo. Good job! 9:23 MB: nice surf! 9:23 JoJo: missed most of you yesterday 9:23 Cynthia E: Outstanding job Mike and Tsurf! Nicely done. 9:23 Cynthia E: We did get our SIGNAL here - but as you all can see it really tested the LIS, and it wasn't a blast off kind of move. 9:23 MikeS: Good job tsurf. Thaks Cyn. 9:23 Cynthia E: Yeah Jojo! Very nicely done! ^3 9:24 tsurf: thx Mike 9:24 Cynthia E: I did not attempt the trade with the phone call. 9:24 tsurf: great work JoJo, you da man ;-) 9:24 Crosseyed: Great job. Lots of perseverance - price was back and forth 9:24 Cynthia E: I was having a technical support issue that I had to resolve. 9:24 Cynthia E: Agree Crosseyed - that is what I see as well. 9:25 Cynthia E: So quickly before I have to head out early today. 9:25 tsurf: buyers sure did not flood in 9:25 Cynthia E: Let me finish up the final comments on CL. 9:25 Cynthia E: When we transition CL down to the 3600 time frame, it is nothing more than a FRACTAL calculation. 9:25 Cynthia E: Many of you (prior to coming here to Fluidity) have heard about using FRACTAL charts. 9:26 Cynthia E: All that means is that you are using charts that are exactly some multiplier away from the other time frame. 9:26 Cynthia E: The most common fractals are 3x and 4x. 9:26 Cynthia E: We use a 4x fractal. 9:26 Cynthia E: So we get 3600 by dividing by 4. 9:27 Andy: time change 3m, watching for D period extension, if not, may test lower 9:27 Cynthia E: That basically makes our 3600 chart equivalent to approximately a 4 MIN BAR chart. 9:27 Cynthia E: Again - that allows us to be slightly FASTER than the average trader. 9:27 Cynthia E: Because MOST traders watching the 15 MIN will also watch a 5 MIN bar. 8

9 9:28 Cynthia E: So we watch the TICK (15 min equivalent), and the 3600 (4 MIN equivalent). 9:28 Cynthia E: From there we must accurately display CL, and we achieve that by multiplying 13 x 4. 9:28 Cynthia E: That is how we arrive at CL = SMA 52 on the 3600 chart. 9:28 Cynthia E: So! 9:29 Cynthia E: Here is the final summary. 9:29 JerryH: Got it Thx Cyn 9:29 MB: thanks cyn, see you tomorrow 9:29 JoJo: bye Cyn! 9:30 Cynthia E: When price accelerates AWAY from CL on the 3600 and it appears that we have a very LARGE point distance between current price and CL, what we KNOW is that even if price travels through that range but does not CROSS CL, that it still isn't a 'significant' retracement. 9:30 Cynthia E: Because we KNOW that we haven't crossed CL on 14400! 9:30 Cynthia E: Are there any FINAL questions as I wrap up and head out today? 9:30 DRich: No, thanks for the explanation of CL! 9:30 MikeS: Excellent lesson., thanks! 9:31 Andy: good stuff, thanks Cyn 9:31 tsurf: nope- Thx for the summary on CL, good stuff 9:31 Cynthia E: 9:32 Cynthia E: Here is today's 3600 summary. 9:32 Cynthia E: We NEVER got any confirmation for any SHORT trades. 9:32 Cynthia E: Even though we dipped below CL - we never BROKE to a LOWER LOW price. 9:32 Cynthia E: So our trend progression was NOT broken. The market continued to maintain trend with HIGHER LOWS. 9:33 Cynthia E: Then we bounced and triggered the Continuation Long above the ONH swing high, and on the pull back price retested the opening swing high resistance in combination with the ONH. 9

10 9:33 Cynthia E: There is your KEY Crosseyed. 9:33 Cynthia E: Do you see that? 9:33 Cynthia E: The very mini lower high that was made just after the bell was INCLUDED in the LIS on that breakout. 9:33 Crosseyed: Yes. Thanks Cyn 9:33 Cynthia E: You bet! 9:34 Cynthia E: 9:34 Cynthia E: Here is the final histogram 9:34 Cynthia E: C has tested the YH upside breakout, but so far D retreated to retest support at the DO, and back within yesterday's range. 10

11 9:35 Cynthia E: Continue to monitor for a successful YH breakout - otherwise, strong re-entry sets the destination target for the YL. 9:35 Cynthia E: Alright! 9:35 Cynthia E: That's a wrap. 9:35 Cynthia E: I have to run. 9:35 Cynthia E: I will see everyone tomorrow! 9:35 DRich: thanks and bye Cyn! 9:36 Cynthia E: Special Note: Krug, we will make sure you have everything setup properly tomorrow! I will double check everything with you! 9:36 Cynthia E: Thanks all! 9:36 Cynthia E: Bye! 9:36 Krug: Thanks 9:39 Deni: if they like it 9:41 MB: who dey? 9:41 MB: lol 9:41 MB: deni's sleep chatting 9:41 tsurf: is Deni seeing people again, lol 9:41 Deni: yes lol 9:41 MB: lmao 9:42 Andy: +2.5 off :42 MikeS: Great job Andy 9:42 MB: nice andy, was that a short? 9:42 MikeS: Great job Andy 9:42 tsurf: great job Andy, was looking at that, nicely done 9:42 JerryH: wtg andy 9:43 MB: I see, cl break short but don't really see the lis 9:44 JoJo: have a great day all! 9:44 Andy: slow tempo so far 9:44 MB: bye jojo, keep up the good work 9:44 tsurf: you too JoJo, good job today and thanks for dropping in! 9:44 MikeS: Take care JoJo 9:45 Andy: CL flat, no confidence either way so far 9:48 Andy: 2 way trade 9:52 Andy: poor high here 9:56 Andy: if they can't bust over C/D high, they will press lower 9:57 Andy: high tics here 9:58 Andy: hit the stops, see if we get follow thru to :59 Andy: time change 1m, need a buy program here 10:02 Andy: see if this is a head fake for bulls to get better prices & shake out weak hands :) 10:03 Andy: bbl 10:04 tsurf: ok Andy 10:04 MikeS: +3 10:04 tsurf: well done Mike, congrats 10:05 tsurf: did you enter on that pullback? 10:05 MikeS: Thanks, Yes I did. 10:05 tsurf: perfect :-) 10:06 MikeS: Pullback confirmed support at YH. 10:07 MikeS: Heading out team. Best to all who are trading. Have super afternoon. Connect in the morning. 10:07 JerryH: bye Mike End of Chat Roll for Wednesday, December 12,