Traders Dilemma....

I would like to get your opinion on Price methods. Alot of traders define price in different manners, some used multitimeframes etc etc.

I have presented 2 charts to help our cause for discussion.

Chart 1 is the current 1hr trend og GU....
I have identified certain patterns within this chart form...

1. Reverse head and shoulders?
2. Triangular consolidation
3. Rectangle Range

What would be your cause of action?
Looking at the long term trend, you should go short...but then again the short term trend is already showing you signs of reversal, dilemma...

What are the strategies that i could put into use in order to gain from the current PA?
Seriously, i would love to go short BUT BUT BUT.......

looking at chart1...price is already at support level, it would not be wise, coz price might just rebound, infact it would be a better idea to go long and target the top of the rectangle as my TP then going short, Oh also note that we might reach the top of the Downtrendline at 2.0400, so note to go short there, blah blah blah......Confused already? lol

Look at chart 2 now....is it easier to trade with less data and less biases? I really think so! Well theres nothing wrong in noting SR areas but over analysis...can really hurt a traders cause for riches...

Lets discuss how you guys would intepret the charts below.

Jest, you need a trade plan man.

Price-Action trading is nothing but buying support and selling resistance. Going short at this juction would not be wise as per your chart #1, correct? that doesn't mean that you should go long. Let's assume the overall trend is down (I dont know, it's just a case example) and you're looking for shorts. Since price is right now at support as per chart #1, then we dont want to sell into support, correct? so how about waiting for that up-trendline to give way in order to enter short? if the breakout takes place, you got green lights to sniff for a short. If it rebounds back up, it's time to give the setup a miss altogether.

That's moreless the type of thinking process I go through with my own trading: I write my own script and per what exactly I want price to do in order to enter a trade and if it eventually does something else I simply dont enter at all.

Those are basically my Trade Plans.

Find a coin with heads and tails .... toss the coin into thin air ... if it lands with head up, go long .... and if it lands with tail up, then go short ....

There you have it, a simple master trading plan ... happy trading ...

Please don't take what I will say as an advice. After all, you will just need to do what you WANT to do according to your circumstances.

As a general idea and concept, I won't go against the long term trend with large position sizes. I would capitalize over such corrective trades with minimal position sizes.

Also, if I am trading against the long term trend, I will never trade breakouts because their risk/reward are terrible and there are many false ones out there.

So, if I were to go against the long term trend, I would go long at supports and with minimal position size and go short at resistances with minimal position size.

This combination shall enhance the profitability of such a counter trade and reduce the risk against me dramatically.

The above situation occurs when I see a long term trend but I anticipate a major correction against it. There are no other situations. The major correction justifies the profitability versus the risk. If the correction is weak, it won't bring me enough profits to justify going against the long term trend.


On the other hand, if I am trading with the long term trend, I would establish positions at supports and potential bottoms (If I am going long with an uptrend) or tops (If I am going short with a downtrend). Remember, I am just establishing positions, which means that I am building my position and the size shall be minimal. This is because you never know if this is a correction or a true reversal.

The next step is to wait for the market to confirm the continuation of the trend. When the market confirms, I build the rest of the position and aggressively add to it to capitalize on the next expected move. Usually this comes with breakouts. This doesn't put me in a bad risk/reward trade because I already established portion of the position at supports or near the bottom of the correction and thus when I continue building the rest of the position, my average is better than the guy who is solely trading the breakout or after the confirmation.

If the confirmation never comes and the correction turned out to be a reversal, I am out with a small loss on a small position in the first place, so nothing to worry about.

What is the minimal position and what is the normal position and how much to trade is completely according to your trading style and plan. I might be an aggressive trader and thus the minimum position I use might be 20% of my equity. I might be a conservative one and the minimum position I use might be 5% of my equity. This is totally up to the person and differs from one to another. To determine this, you must know yourself, which I assume any trader must do before trading at all.

Jesse Livermore said, there are times to go long, there are times to go short and there are times to go fishing.

Once again, what I said is generic and please don't take it as an advice to buy or sell anything. These are just general rules I abide by. If they are helpful to you, I am pleased, if they are not, just discard them and I am pleased as well


Thanks,

Nader

i trade short time frame for entry, and longer time frame for exit,
i vote for long with tight range.

i never think too much about this and that, just keep it small enough.