DislikedBeing aware of the psych levels of 00, 25, 50, and 75 is always encouraged. The typical school of thought is to fade these levels. Having said that, I have some friends that know this is "typical", and trade contrarian to the fade. At any rate, we should be aware of these levels.
I like plotting a ma on select time frames and looking for s/r and trend at these levels. A 50sma is a good one to consider, you might consider looking at higher time frame 50's, and plotting them on your smaller time frames (ex - 50sma on 100tick = 500sma on 10tick). Just have to play with the ma and find one or two that gives the cleanest look most of the time. I like to plot 60min values of ma's, bands, etc. on lower level time frames.
It looks like you are wanting to trade breakouts on key levels at a very small time frame. At times, it will look great, and on some days you will get whipped to death. Filtering when these times are is the rub, and not easily defined. You might consider looking at this at high volatility times during news, having a clear risk to reward defined, which is the key for any methodology. Good luck and good trading.Ignored
Yes using 50SMA to determine entry (hopefully with enhanced insight through 00255075 & HH, HL, LL, LH helping to make entries better than a 50/50 guess) - will quickly tell us if we are trading in the right direction.
We will sometimes find that we chose to trade in the in the wrong direction, but this should soon become evident.
Using 50SMA as an entry, we could expect to be trading in the right direction 50% of the time. However, our SL could be hit before we see any available profit, only for the trade to then go into profit in our original direction.
Being able to identify a range/consolidation pattern is important, to avoid whipsaws, and thats where HH, HL, LL, LH can be useful so that we can see what needs to happen before a breakout can occur/beofre a trend can form.