I'm not too keen on your TLs, would've adjusted them already, BUT, I would've shorted a break of the 10:45 bar low, targeting a break of each previous support level. The downtrend is still fully intact with resistance established at the down TL around the 50% retrace level, so I would trade short, expecting the triangle break to be continuation, until proven otherwise.
A simple price action approach
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I'm not too keen on your TLs, would've adjusted them already, BUT, I would've shorted a break of the 10:45 bar low, targeting a break of each previous support level. The downtrend is still fully intact with resistance established at the down TL around the 50% retrace level, so I would trade short, expecting the triangle break to be continuation, until proven otherwise.
I draw my main lines in my 5-min trading TF. I also draw channels on the 1-min chart for range trading and positioning for breaks out of triangles/channels.
I draw major TLs on a 60-min chart in case I catch a strong runner and want to know where the longer term players will look for bargains or throw in the towel.
Again, my main concern is my trading TF (5-min). My trading plan is based on the 5-min chart and the price swings common therein.
the first question you ought to ask yourself is....
what kind of a trader do you have the potentiality to become....?
5 min chart of whatever kind.... may not be suitable with your temperament nor your personality nor perseverance at all....?
are you quick on your feet? able to make quick decision independently?
many like to do day trade but is a bit slow on crunching number, then perhaps the learner should try longer time frame....
5 min time frame is not for the faint of heart.... but then you may be an exception ....
good luck and hope you find which time frame is best suited for just yourself... disregarding what everyone says on here.... especially what i just said.... lol
Any feedback here would be welcome.
Here is my 60-min down channel I mentioned earlier.
I've been managing the trades on a 5-min. Shown here.
On this mornings test of the upper limit, my idea was to short the first sign of rejection, first red down bar on the 5-min (orange arrow). My other idea was to wait for a 5-min bar close below the 20ema. Either of those could have resulted in a profitable short trade.
Then price came back up to test the channel limit again, this time slightly exceeding it. I didn't go long, since it was counter-trend and also right up against resistance from the morning highs.
But when price closed back inside the channel, I thought short (2nd orange arrow). This was stopped out when price broke back above the channel.
Next price broke back below the channel and closed below the 20ema (3rd orange arrow), so short again. As of now that "pretend trade" is good and a couple of pts in profit.
I also noted a 5-min channel in yellow. Price broke below it and then broke back into it (blue arrow). Is this another case where you buy and hold for a test of the upper limit? Or pass, since it would be going long in a down channel?
Another example, break out of the yellow channel, retest it, then take out the high of the retest bar, and go long for another shot at the big 60-min channel? Just another idea.
Just wondering, would anyone have considered going long, and playing for a breakout of that 60-min down channel? It kept crossing my mind this afternoon. Or would that be considered too counter-trend? (I know, there is no right or wrong, it depends on the trader and his/her plan, but just wondering if that's too advanced a tactic for someone learning this method). Meaning, should I only stick to shorting in down channels and buying in up channels?
Would appreciate any of the experienced members opinions on how they would have traded these scenarios. Would you be playing the same lines as me, or would you have seen something completely different? Thanks.
Here is my 60-min down channel I mentioned earlier.
I've been managing the trades on a 5-min. Shown here.
On this mornings test of the upper limit, my idea was to short the first sign of rejection, first red down bar on the 5-min (orange arrow). My other idea was to wait for a 5-min bar close below the 20ema. Either of those could have resulted in a profitable short trade.
Then price came back up to test the channel limit again, this time slightly exceeding it. I didn't go long, since it was counter-trend and also right up against resistance from the morning highs.
But when price closed back inside the channel, I thought short (2nd orange arrow). This was stopped out when price broke back above the channel.
Next price broke back below the channel and closed below the 20ema (3rd orange arrow), so short again. As of now that "pretend trade" is good and a couple of pts in profit.
I also noted a 5-min channel in yellow. Price broke below it and then broke back into it (blue arrow). Is this another case where you buy and hold for a test of the upper limit? Or pass, since it would be going long in a down channel?
Another example, break out of the yellow channel, retest it, then take out the high of the retest bar, and go long for another shot at the big 60-min channel? Just another idea.
Just wondering, would anyone have considered going long, and playing for a breakout of that 60-min down channel? It kept crossing my mind this afternoon. Or would that be considered too counter-trend? (I know, there is no right or wrong, it depends on the trader and his/her plan, but just wondering if that's too advanced a tactic for someone learning this method). Meaning, should I only stick to shorting in down channels and buying in up channels?
Would appreciate any of the experienced members opinions on how they would have traded these scenarios. Would you be playing the same lines as me, or would you have seen something completely different? Thanks.
Nice, a thread full of high quality info.
I got a couple of suggestions myself.
For starters take ESD's brilliant post and print it. That's easily one of the best ET posts I have ever read as far as systems go, absolutely beautiful.
Entry method is quite precise so this method allows and suggests no adding to losers. Forget better fills, better fills just mean price is not acting as it should in such method.
I'm a huge advocate of adding to winners, particularly when trend trading and when witnessing price is acting as you expected.
Couple of basic rules.
Only add smaller size than the previous portion.
Example:
500 shares 250 shares 125 shares
When shorting add on pops, don't add low, try to add on a new LH.
When buying add on retracements, don't add high, add los, like a new HL.
Never to a losing position and only when PA is agreeing with what you predicted/saw.
After you get the hang of it, look into trailing of stops after doing adds.
When you take a risk you must identify the good and the bad of the trade.
What happens when you add to a loser and you are wrong ? You lose big.
What happens when you don't get to add because you are right ? You win small.
Is that logical trading? Of course not, averaging down is for idiots, don't be one.
A better fill does not mean you should screw with risk.
Sound money management and techniques suggested in this thread and you good to go.
Kudos to those sharing good stuff to the community.
Excellent thread.
NAD
I got a couple of suggestions myself.
For starters take ESD's brilliant post and print it. That's easily one of the best ET posts I have ever read as far as systems go, absolutely beautiful.
Entry method is quite precise so this method allows and suggests no adding to losers. Forget better fills, better fills just mean price is not acting as it should in such method.
I'm a huge advocate of adding to winners, particularly when trend trading and when witnessing price is acting as you expected.
Couple of basic rules.
Only add smaller size than the previous portion.
Example:
500 shares 250 shares 125 shares
When shorting add on pops, don't add low, try to add on a new LH.
When buying add on retracements, don't add high, add los, like a new HL.
Never to a losing position and only when PA is agreeing with what you predicted/saw.
After you get the hang of it, look into trailing of stops after doing adds.
When you take a risk you must identify the good and the bad of the trade.
What happens when you add to a loser and you are wrong ? You lose big.
What happens when you don't get to add because you are right ? You win small.
Is that logical trading? Of course not, averaging down is for idiots, don't be one.
A better fill does not mean you should screw with risk.
Sound money management and techniques suggested in this thread and you good to go.
Kudos to those sharing good stuff to the community.
Excellent thread.
NAD