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The Proper Way of Identifying a Double Top or Top


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#1 souelle6

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Posted 13 March 2010 - 07:01 PM

I have been utterly dismayed recently at posters inability to identify (by definition) a double top or a "top"... The market currently appears to have "double topped" only because the week ended at an important position... A "top" can characterized only be characterized on "the day of" by a one day reversal or something very close to the "ODR"... Defined by Livermore (a widely held definition since the 1900s) an ODR occurs where the "high of the day is higher than the high of thre previous day buy the close of the day is below the close of the previous day"... This is the only way to characterize a "top" on the day of which it occurs as many have incorrectly on Thursday & Friday of last week... The only other way is to allow several days to pass where an ST downtrend to emerge where one can by definition characterize this as a top.... This is not any piece of trading advice, it is simply the definition of an interim top and to say that the "top is in" as of Thursday or Friday just because the weekend has come is absurd... I hope my examples below provide more clarity to these long held definitions I try to explain ODRs, tops without ODRs, Pivotal Points and then demonstrate how the S&P is currently at a pivotal point which may or may not manifest itself to the upside (I have tried to drill this chart into the board but its not sticking): souelle

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  • Top_wo_ODR.jpg
  • One_Day_Reversal.jpg
  • SPYMarch112010.jpg

Edited by souelle6, 13 March 2010 - 07:10 PM.

"It's not the thinkin' that makes the money, it's the sittin' and waitin' that makes the money" -- J.L

#2 souelle6

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Posted 13 March 2010 - 07:21 PM

I recognize the ODR example I have show is not the clearest (sorry too quick)... I hope the point itself is still clear

Edited by souelle6, 13 March 2010 - 07:22 PM.

"It's not the thinkin' that makes the money, it's the sittin' and waitin' that makes the money" -- J.L

#3 selecto

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Posted 13 March 2010 - 07:53 PM

Thanks, Souelle, but that is not the only way to call a "top" on the "top" day.

A chartist with an eye on the lower windows can hi prob a daily "top" from price mo
studies on the day it occurs.

I do not like the word "top" preferring the word "turn." One will get laughed at a lot
less by trading "turns" rather than "tops." And who really cares if its a "top" as long
as its a "turn."

Top 'o the evening to you, though.

“Don't try to buy at the bottom and sell at the top. It can't be done except by liars.” Bernard Baruch

#4 souelle6

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Posted 13 March 2010 - 07:55 PM

Thanks, Souelle, but that is not the only way to call a "top" on the "top" day.

A chartist with an eye on the lower windows can hi prob a daily "top" from price mo
studies on the day it occurs.

I do not like the word "top" preferring the word "turn." One will get laughed at a lot
less by trading "turns" rather than "tops." And who really cares if its a "top" as long
as its a "turn."

Top 'o the evening to you, though.

“Don't try to buy at the bottom and sell at the top. It can't be done except by liars.” Bernard Baruch


Thanks selecto... I have read your posts before and this is clearly not for a chartist like you... Rather it is targeted for those which claim "I'm all in on the double top today"... When I think its pretty clear the daily interim top is still in question... haha consider it "an intro to defining tops"... I tried to make this clear with the "top w/o an ODR" which allows for far more ambiguity in ones defining a top... Still I think we require a couple more trading days before any kind of daily top or turn is clear enough to beget any kind of "all in" regardless of your macro perspective...

Appreciated,

souelle

Edited by souelle6, 13 March 2010 - 08:00 PM.

"It's not the thinkin' that makes the money, it's the sittin' and waitin' that makes the money" -- J.L

#5 redfoliage2

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Posted 13 March 2010 - 10:59 PM

There is no sign for a double top, but there are signs for a pullback. Unless the pullback breaches the Feb. low, there will be no double top. Don't worry too much, buddy.

Edited by redfoliage2, 13 March 2010 - 11:00 PM.


#6 porsche911sg

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Posted 13 March 2010 - 11:06 PM

I have been utterly dismayed recently at posters inability to identify (by definition) a double top or a "top"... The market currently appears to have "double topped" only because the week ended at an important position... A "top" can characterized only be characterized on "the day of" by a one day reversal or something very close to the "ODR"... Defined by Livermore (a widely held definition since the 1900s) an ODR occurs where the "high of the day is higher than the high of thre previous day buy the close of the day is below the close of the previous day"... This is the only way to characterize a "top" on the day of which it occurs as many have incorrectly on Thursday & Friday of last week... The only other way is to allow several days to pass where an ST downtrend to emerge where one can by definition characterize this as a top....

This is not any piece of trading advice, it is simply the definition of an interim top and to say that the "top is in" as of Thursday or Friday just because the weekend has come is absurd... I hope my examples below provide more clarity to these long held definitions

I try to explain ODRs, tops without ODRs, Pivotal Points and then demonstrate how the S&P is currently at a pivotal point which may or may not manifest itself to the upside (I have tried to drill this chart into the board but its not sticking):

souelle

There is NO WAY to Cofirm it has double top unles it breaks 1040, even then it still cant be confirmed untill it goes on for some time lets NOT get too technical about tops, Take Shanghai ssec, charts has shown a double top, second top higher than first marginally, but fell more than first top, Can ypu say it has double top technically till today? No! because it has not broke below the neck line, It will take months to confirm a double top nobody knows for sure, but can you make money shorting the prevoius highs -> yes. So don't bother with double tops, top, super triple top, flat top all kinds of tops forget it.

If technical were right JL would not have written a book and he would not have died broken! The fact that he went broke and kept on to his long position when the bull market turned was enough reason not to use technicalls entirely
The market catches almost everyone on the wrong side. We always seem to get fake break out before that huge dump or the hugh dump before the false break down! Trade Safe!

#7 souelle6

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Posted 14 March 2010 - 01:13 AM

If technical were right JL would not have written a book and he would not have died broken! The fact that he went broke and kept on to his long position when the bull market turned was enough reason not to use technicalls entirely


Sure... this is not my point though... I think you get my point... especially because you seem to recognize I am just using J.L's definitions as proxy's for age old descriptions
"It's not the thinkin' that makes the money, it's the sittin' and waitin' that makes the money" -- J.L

#8 porsche911sg

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Posted 14 March 2010 - 01:32 AM

If technical were right JL would not have written a book and he would not have died broken! The fact that he went broke and kept on to his long position when the bull market turned was enough reason not to use technicalls entirely


Sure... this is not my point though... I think you get my point... especially because you seem to recognize I am just using J.L's definitions as proxy's for age old descriptions

I get your point but how about focusing on the failures of technicals. Many times, they fail, these failures are enough to get a trader broke.

An overbought market can stay that way for some time, but the times are when we are at the bottom of the rally, An oversold market can also stay for some time. The best logical use of J.L methods are pivots points which is the only system I use to decided when i need to cut off my trade.

Price at pivots is the only way out. Since 1150 is taken out on friday, and friday closed down it's highly likely you will see 1135, 1115, 1105,1090 next week. Shorting at the the neckline say 1030 is a sure way to confirm you'll get broke if the the 'double top' is a failure.

Since no one on board is mentioning shorting at 1030-1040, why the mention of double tops?
The market catches almost everyone on the wrong side. We always seem to get fake break out before that huge dump or the hugh dump before the false break down! Trade Safe!

#9 TMN

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Posted 14 March 2010 - 08:55 AM

I recognize the ODR example I have show is not the clearest (sorry too quick)... I hope the point itself is still clear



is shanghai on the 4th of March 2010 a clear example?

#10 souelle6

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Posted 14 March 2010 - 09:52 AM

If technical were right JL would not have written a book and he would not have died broken! The fact that he went broke and kept on to his long position when the bull market turned was enough reason not to use technicalls entirely


Sure... this is not my point though... I think you get my point... especially because you seem to recognize I am just using J.L's definitions as proxy's for age old descriptions

I get your point but how about focusing on the failures of technicals. Many times, they fail, these failures are enough to get a trader broke.

An overbought market can stay that way for some time, but the times are when we are at the bottom of the rally, An oversold market can also stay for some time. The best logical use of J.L methods are pivots points which is the only system I use to decided when i need to cut off my trade.

Price at pivots is the only way out. Since 1150 is taken out on friday, and friday closed down it's highly likely you will see 1135, 1115, 1105,1090 next week. Shorting at the the neckline say 1030 is a sure way to confirm you'll get broke if the the 'double top' is a failure.

Since no one on board is mentioning shorting at 1030-1040, why the mention of double tops?

Why not focus on the failures of technicals? I wasn't talking about that???

I really don't understand what you are talking about... overbought markets and oversold markets don't have a context in my trading strategy (I have said that the post was not trading advice) or J.Ls I used his definition because his has been around for ages... My strategy hasn't even been put on the table and I'm not making any argument for T.A over fundamentals or anything like you seem to be implyingh... If you don't think double tops have been called on this board I suggest you go back to thursday, friday and saturday's posts you will see this and others...

http://www.traders-t...howtopic=117044

If I was making any point is that those who have called a double top are early as we have only approached a pivot which may or may not fail... I think you are saying the same thing but somehow you also seem to think I've put in a plug for J.Ls stratgy, which is pivot point heavy anyways...
Are you sure you actually read the post entirely?

souelle


By the way read J.Ls biography, the man suffered from some serious mental illness that was probably more responsible for his downfalll than technicals...
"It's not the thinkin' that makes the money, it's the sittin' and waitin' that makes the money" -- J.L