The week starts out 'interesting'. Gold is only a few cents from the 'magical' $1600 level. I think the only magical level is $10,000, and the musings on when that gets taken out. If it does, and the moves were proportional, that prices gas at the pump around $30/gal and crude around $400. Imagine food prices then. The Swissie is exploding, and the EUR/CHF just set another new record low, as parity is now the talk. And this has our futures down a whopping 1.75 points. Wow, pretty scary, the ES down 1.75 points.

And up off the .447 from the KZ, as expected. Let's see if it can get some legs or not.

Kane 4 PCP ABCD completing at 0.382 fibo. I am not sure if that is a genuine Lightning trade, I will have to check the archives, but it certainly is a nice follow-on to the Kane 4 PCP

Good Trading,

Al Kamego

Oops. Make that a Kane TD ABCD instead of a Kane 4 PCP.

Al Kamego

Al, I checked my notes on the lightning trade and I think you have a valid example there. You had the box formed by the fib confluence
of .382, .5 (or can be .618), and .786, then price entered that box, left and re-entered, then closed in your direction outside the box. Price did not exceed the other side of the box.

Originally posted by albert

Kane 4 PCP ABCD completing at 0.382 fibo. I am not sure if that is a genuine Lightning trade, I will have to check the archives, but it certainly is a nice follow-on to the Kane 4 PCP

thanks, ches,

Al Kamego

ches, I'm a little fuzzy on the lightning trade - can you direct me back to the full example? I understood it, but don't feel I could explain it to another trader... thanks

Here's a good way to do it:

Originally posted by rat89

ches, I'm a little fuzzy on the lightning trade - can you direct me back to the full example? I understood it, but don't feel I could explain it to another trader... thanks

I guess what I am saying is that not every time price hits a line, or lines confluence and price hits them, it's an area that produces a potential trading edge. With experience one can make an attempt at filtering out these areas that just don't have the right look to them. I'm not really talking about subtle, almost invisible variations here, I'm talking about 'obviously has potential', and 'obviously looks totally wrong'. This is frequently something that can be seen by eye real easily, but is very, very hard to program into a computer. I wish I had a chart example off hand for you, but I don't.

Originally posted by tx_ches

Jim, what do you mean when you say "our eyes would say the geometry is not good." How can geometry be bad?

I'm not convinced the algo's are using the same median lines as roofer all the time. On the QQQ's, I drew 2 other sets before I saw roofer's set and even after I drew another set. So all together there were 4 sets with lines going into his areas. The algos could easily have programmed in 2 of them without using the more minor swing low that roofer used.

How heavily do you think the algos rely on measured moves? It seems like I see a lot of median line sets that capture a measured move. I wonder if that is what the algos key on when it is looking like they key on a median line set?