Advantages of trading over 50 – Relativistic and systematic modes [Video]

The screenshot below shows a shift from longs in control to a battle to maintain control to sellers in control.

Weekly VWAP (yellow line) restarts with each new week. You can see four weeks of rising prices, a one-week "battle" with long traders "hanging in there", and finally, two weeks of prices moving down, signalling sellers are in control.

I'm going short. Right? Not so fast.

Considerations: The latest CFTC COT report shows commercials are net long and speculators are net short, albeit in declining quantities.

The next chart is a collaboration of observations. See where long traders front-ran a known relative value price at 0.6795. As you'll see in a minute, this level will play a vital role.

Zooming in and notice the aggressive lifting of offers shown by the delta slope.

What do the points covered so far have to do with age? Synthesizing different perspectives and seeing between the differing views to extract and exploit a trading opportunity uses relativistic thinking. A thinking skill only completely accessible post-50 yrs of age.

Spoiler Alert: Here's the move in its entirety. But it wasn't simply a case of buying the low & selling the high. The horizontal lines - green, red and blue show the 'playing field'. These are the same levels that appear on the 2nd chart.

The horizontal price levels mark the boundaries of the playing field and bring order and structure to the unruly characteristic of price movement. They inform you of the price ranges of where it's okay to trade (within the playing field) and where not to trade (out-of-bounds).

Here's where things get really interesting!

You can see the power of the playing field as the market traded post-analysis.

Below shows you what traders commonly refer to as footprint view. It shows buyers lifting offers and sellers hitting bids. Using color shading intensity, the more intense the color green, the higher the number of contracts "lifted" at the corresponding offer price. Similarly, the more intense the color red, the higher the number of contracts "hit" at the corresponding bid price.

1. Recall the front-running? And notice the sellers entering at the edge of out-of-bounds?
2. Large buyers step in at the next playing field only once firmly established. 
3. Repeat of what occurred at point 2
4. Approaching out-of-bounds, those who bought at levels 1, 2 and 3 sell into late buyers. 

I expand on the 4 points in the upcoming video for further explanation.

The playing field was developed using systematic thinking. A skill only completely accessible post-50 yrs of age. But systematic thinking in trading doesn't end there. It also characterizes flexibility and fluency in generating ideas.

See systematic thinking when live trading during the market movement we've discussed.

 

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