ah, I read a couple of times your post, would say more clear now on what you tried to express. I put my understanding below in blue color for your comment. please correct me if I am wrong. thanks
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You're looking to take advantage of one of two things...
One.... is momentum from that bar the moment it does it's thing. (wether you catch a retracement entry or whatever). The best set up bars are large and close right at the extreme , or not far from it. The buying/selling pressure is strong at THAT time. This time you missed it. Don't get beat up over it. You need to evaluate your strategy over many trades, not just one. [ retrace not necessarily take place each time, it depands on momentum, if missed one, then move on to the next. regarding the setup quality, you prefer to seeing a larger size, as well the close ideally beyond current level ]
Even if it retraces it can still have momentum. It may just be taking a breather.
When a bar closes very close to the direction it's heading it's a very good thing. BUT, it's a snapshot of the market at that moment in time. The next bar or two can still be a run on of that momentum, no problems. So it's a valid set-up to play still for that short time. The momentum can continue on. Sometimes for many bars until we reach a major group of orders in the other direction. Of course.
Much later on though it's a different story isn't it?
5 or six bars later, if you are still waiting for the retrace of that first bar, you are mad. It could be a whole new group of traders working the market by then, and whatever caused the main move could well be all over.
As an example let's pretend we are looking at a 1-hour chart:
A bank may have been moving some money for a very large corporation in preparation for their overseas payroll. When it starts the job, it creates a BEarish Outside Bar on the 1 hour chart with it's first package of transactions.
As they continue on, the price trends down over a few bars. There might be a retrace or two within the range of those bars as they pause and wait for the market to come back to a better price for them.
The momentum is there as that bank (and other traders get on board) continues with the currency transfer in bursts. No problem. But later on in the day it's all over. That's why timing is important. The immediate bar afterwards is the strongest chance. If you miss the first entry and it's already on it's way, don't bother getting in late. ...There are too many good setups just around the corner to risk getting caught up late in a move that's probably close to being all done and dusted!
Two.... is another independent setup off of the same level later on. Another pin or BEOB or whatever next week or something off of that 127.70 or so level again. This is where sellers came in, twice. [ chance still exists if price pullback into his short limit order level, exercise some patience to wait for unless price break another level, then a different story. ]
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We wait for the best opportunities , we don't become obsessed with one chart and our preconceived ideas of where it may be heading.
Bundy's status today: "Waiting..."
U. S.
