ES2008082701

Start of chart is up move(leg 1), retraced during afterhour(leg 2), climb back up just before market open(leg 3). Leg 4 is a ABC, giving 1st chance to enter trade, didn't enter with intention to follow jjrvat PBP. 2nd chance is when px pull back to now support line, didn't enter as was looking at V10000 whick pull back is not obvious.

ES2008082601

Entered trade when px retrace 50%, 3BR like. Expected px to move down swiftly, exited trade when that didn't happen, which end up to be a correct move.
Another reason for entering the trade was last higher low breaking the upward trendline. Looking back these trendline has varied results. Horizontal lines indicating support/resistance provide better view of the market.
V10000 chart gives a different picture, my entry was in the battle zone, it did break down but not significate, infact, it's low was a flip of 3:50 of earlier day. Px eventually rised to congestion area of previous trading day and turn there. These S/R lines are real good for target.

ES2008082501

One trade today, not really high probability. Took the lead from support line @ 1281.75. Set prudent target just below the pivot high, which was a right move, price moved just 1 tick above the target before retracing.

Position Sizing

See that this is the way to money management. There are so many success story out on EliteTrader Price Action Thread.
The trick is to enter a trade with 2 cars, take profit on first car with 5-6 ticks and move the stop of remaining car to Break Even. Phychologically easier to swallow as there is no downside once we move 2nd car to BE.
2nd car is the money spinner, let it ride as far as possible.

AHA moment

Beginning to have the "aha" feeling. Horizontal support and resistance line do play a very important part. Look for S&R flip. Price do bounce off S&R.

Price zone will lots of volume are important too, take the middle of these area. Price do bounce off these area too.

Do look at S&R as zone and not absolute value. Market is never absolute. Observe price movement, tell tale sign like slowing down indicate a possibility of turn.

On top of that, realised that S&R of daily picture (not daily bar) gives the best result, propably because most traders stay up for the whole session. Smaller oscillation has little effect for S&R.

All the TA that we learn such as Head and Shoulder, Double Top, Double Bottom works best with a correspondance S&R. Not just any H&S, DT, DB that comes along.

Trading / Investing based on Technical Analysis

Found this interesting writeup. The explaination of momentum is just what I'm looking for
http://www.marketskillbuilder.com/trading.htm

Momentum

Up and down-moves can be fast ("impulsive") or slow ("corrective" or "drifting") in nature (or in between). Note: The most important aspect of "Momentum" is not any absolute measurement of its value, but whether it is constant or changing. the key questions (to be answered from direct observation of the price-charts) are:

• Is the current price-move speeding up (in which case you want to stay with / get into it) or slowing down (in which case, consider taking a position against it)
• Is the current price-move faster or slower than the immediately preceding move in the opposite direction (expect the on-going trend to be in the direction of the faster of the two).

Support and Resistance Psychology

Repost from investopedia

Support and resistance levels exist only by virtue of traders' and investors' memories of their experience of trading a given security at certain levels in the past. Investors will be more inclined to lend their support at the same level at which a large crowd of investors once purchased the stock. Traders tend to have the expectation that a stock will rise again from the same level as it did in the past. Even if those traders did not hold the security in a previous session, they will still look to history to be their guide, examining prior examples of session bottoms and levels of support.
You should also note that particular zones of support or resistance are expected to shift to their opposite once their zones have been broached. For example, a strong zone of resistance, once broached, becomes a psychological victory for traders and quickly turns into a zone of support for the ensuing trend as traders continue to celebrate the victorious breakout. By contrast, once a zone of support is destroyed, the psychological deflation is all too real as the chart stubbornly refuses to touch this zone again in the near future.
The psychology of support and resistance corresponds to the vicious emotions of pain and regret. Traders holding losing positions feel pain and, looking for the first available opportunity to lessen their pain, abandon their positions. Traders who missed a good opportunity feel regret and look to trends from the past to find new opportunities to make up for missed chances in the past.
Even in a flat market these emotions can be prevalent. Traders may practice buying at the lower edge of a range and shorting at the upper edge. In uptrends, bears who engage in short selling will naturally feel pain, and bulls will experience regret that they did not buy more. Both will be eager to buy if and when the market gives them a second chance, which will create support during investors' reactions in an uptrend.
Resistance indicates bulls feeling pain, bears feeling regret, and both camps ready and waiting to sell. A downward breakout from a trading range will cause pain to bulls who bought and will make them eager to sell during the first market rally so that they can get out even. Bears will regret not shorting more and wait for that same rally to allow for a second chance to sell short. The pain of bulls and the regret of bears in a downtrend translates into what is referred to as resistance.

ES 20080731