Trading right into 4800 which was our Asia battle-line for the day. A pattern often seen is for price to drop down to that line at FO/LO to pick up orders before taking off. See Islander and Medici's thread if you want further examples.
Psych Levels, Pivots, and Trendlines - Resurrected
- #6,941
- May 4, 2011 3:37am May 4, 2011 3:37am
- Joined Nov 2008 | Status: Trader | 3,270 Posts
- #6,942
- May 4, 2011 3:42am May 4, 2011 3:42am
- Joined Nov 2008 | Status: Trader | 3,270 Posts
Hi guys,
Vantage & Eyevoltage...I have a Q for you guys
What do you think...how many wins can you get in a row if you realy try hard and set this as a goal...to take only super A+ setups, with tight management and look for fast momentum. For example if you set a goal to get 10-15 wins in a row, i bet sooner or later you would achieve it,do you agree?
I am asking because I am thinking to set an exercise like that for me and just want to get your opinion. You are more experianced and have more this types of trades under your belt....
The problem is partly psychological. If you expect not to have any losses you are setting yourself up for trouble.
A better exercise is to try to learn to take the losses with a smile.
- #6,944
- Edited 4:07am May 4, 2011 3:48am | Edited 4:07am
pgd,
Try using a second MA and use the two MAs as a trend filter. As you can see in Auron's chart, his fast MA was above his slow MA, indicating an uptrend.
Dhb has a good point about following the MAs and trends and I think most of the time that's the way to go. I use those MAs as a guide and generally I am taking trades in line with them unless price has just undergone an exhaustive move a good distance away (basic reversion to the mean).
However, I treat the early morning and the opens as their own animal. We know that during the European morning price often reverses as dealers move prices to levels where orders are located to clear them from their books. We also know that price tends to reverse from levels. We just don't know for sure which level it will reverse at, though we often have compelling evidence for some over others.
So unless price is trending quite strongly I am very open to the possibility of price reversing around the opens and timing is quite important here (also what my CII is for - reversals). So that brings me to my thinking this morning:
Price was moving within the channel and I was looking for signs of which way it was likely to break. We had levels on either side so I was waiting to see price's reaction once it reached some of them. I saw the FO LH, and although that is often an excellent trade, in this case I passed. I asked myself, where are the orders? Is there a good reason for price to move strongly here due to overwhelming order flow? Prior to FO we did not reach DP so quite simply I didn't think it likely that any significant order flow had entered the market to give that LH real meaning unless it managed to head through 4800 with some momentum.
As I pointed out before, the 4800 had shown itself to be an area where orders were present for a number of hours over Asia. I considered the possibility that price would break through the level but even if it did we still had MS1 and the bottom of the channel below. Not the strongest of levels, but additional risk when we don't have convincing reasons that we've put in a short-term top. So it was a matter of wait and see if mid-FH brings one of its likely reversals or if it follows through and then maybe looking for a LO LH.
We then proceed to form the tweezers/engulfing bar right off 4800 which was a sign we were likely to test the DP at the very least. That was enough room for me to at least manage a position without unreasonable risk, so I went long from there. After the two spinning tops above DP I took that as my cue to get out and avoid any potential LO drop but also with the intention of getting in again if we continued up, which we did. Exit after the M5 marubozu didn't follow through.
I don't think this is a good exercise. Risk and uncertainty are inherent in trading and should be accepted. Trying to eliminate the risk will likely not increase your profitability. That's my experience at least.
The problem is partly psychological. If you expect not to have any losses you are setting yourself up for trouble.
A better exercise is to try to learn to take the losses with a smile.
I'll reply by PM as I am going off topic from this thread.
- #6,947
- May 4, 2011 4:19am May 4, 2011 4:19am
- Joined Nov 2008 | Status: Trader | 3,270 Posts
Who needs to learn the basic lessons of pattern recognition when flashy indicators like CII are available?
Note that price retraced 50% of the morning session in less than half an hour
Since you mention it, I have to show off today's favourite trade. Not recommended, but I have somewhat of an addiction to these things.
Note that price retraced 50% of the morning session in less than half an hour
I have re-attached your chart after marking in blue a divergence that occurred before the one that you used.
what were your reasons for not using the one i marked to plan your entry? is it because that would be right into RN __50 or any others?
thanks.
Missed this nice EU long off the harami at mid-FH and TL break. Nice volume came in on the harami suggesting buyers coming in at 50. Very large volume at the MR1 so if I was in I would most likely take my pips there and take a wait and see approach to the level and maybe get back in after LO rather than hold for the break.
Sure someone out there who wasn't messing around on the Internet caught this one...
Sure someone out there who wasn't messing around on the Internet caught this one...
- #6,956
- May 5, 2011 2:13am May 5, 2011 2:13am
- Joined Jan 2007 | Status: Trader | 11,838 Posts
Missed this nice EU long off the harami at mid-FH and TL break. Nice volume came in on the harami suggesting buyers coming in at 50. Very large volume at the MR1 so if I was in I would most likely take my pips there and take a wait and see approach to the level and maybe get back in after LO rather than hold for the break.
Sure someone out there who wasn't messing around on the Internet caught this one...
Cable also had a similar move - a push down towards its DP in mid FH - also in a red ~marubozo, this is a great alert / heads up - then cable followed with a higher volume bullish engulfing for a 30+ swing into LO.
With BOE and ECB news later we might be in for a choppy morning.....
Trading Levels with WRBs
- #6,960
- May 5, 2011 5:58am May 5, 2011 5:58am
- Joined Jan 2007 | Status: Trader | 11,838 Posts
Trading Levels with WRBs