Ranajit Chatterjee 10 Posted June 4, 2020 So clean, nice one @Christopher Patterson 1 Share this post Link to post Share on other sites
Justin 262 Posted June 4, 2020 Very nice @Christopher Patterson! I was actually in that trade long, riding it to the top. That was my exit for the same reason! I should have reversed, but was happy to take my profits and be done. Well done; thanks for sharing! 1 Share this post Link to post Share on other sites
Christopher 129 Posted June 4, 2020 @Justin thanks! I was thinking about hijacking a thread and doing a video a day on one of my trades, it helps me, and I think there might be a couple people out there that would enjoy it, would that be alright? Share this post Link to post Share on other sites
Justin 262 Posted June 4, 2020 Of course! I'd enjoy watching them myself! You could even start it as a Journal in our journaling section if you'd like (but I'm not really fussed where you post it): https://forums.bearbulltraders.com/forum/11-day-trading-journals/ 1 Share this post Link to post Share on other sites
Clay Davis 2 Posted June 9, 2020 What might have happened if it weren't so over-extended? Share this post Link to post Share on other sites
Christopher 129 Posted June 9, 2020 (edited) On 6/8/2020 at 10:31 PM, Clay Davis said: What might have happened if it weren't so over-extended? Good question @Clay Davis! Lets think about it.. First, the following is my opinion... There are a ton of different ways that this could play out, but in this scenario since there were SO MANY orders sitting at $20, the price is highly likely to bounce off of $20 a few times, and we will almost always get something that represents an ascending triangle. Now, by first principles we know that there is no such thing as a fixed price per share, price is dynamic, so long as there is volatility. So, by "wedging" price in to a fixed point, we're trending towards a contradiction. The market is saying, "THE SHARE PRICE IS WORTH EXACTLY $20" but we know from first principles that this can't be true! I like to think of it as momentum, the tighter the wedge, the more momentum accumulated, and ultimately, the more volatile the inevitable breakout. So, we know 2 things, price is going to breakout to the upside or to the downside, it has to. scenario 1 (upside breakout) 1. Break with a continued buying effort 2. Break with a retest of $20 3. Break with a retest and fail of $20 scenario 2 (downside breakout) 1. Break with a continued selling effort 2. Break with a retest of $20 3. Break with a retest and fail of $20 So, the main take away is that price cannot converge, there is no such thing as a "true value" of a share price, only a "perceived vale" and when we wedge we create a contradiction = > increased momentum = > breakout, In my video, price had no support beneath it, and so it's no surprised that it got hard denied, in the situation where price does have a lot of buying support, and we're approaching a strong level, we are trending towards a contradiction and ultimately, a breakout. Edited June 10, 2020 by Christopher Patterson Share this post Link to post Share on other sites
Clay Davis 2 Posted June 11, 2020 Thanks a lot Christopher. very helpful. 1 Share this post Link to post Share on other sites
