A simple price action approach
- Thread starter metal
- Start date
I agree, it's uncomfortable holding, especially if there's an interim level halfway through the channel move, such as the infamous mobile S/R (20-bar EMA).
Since first reading this thread and drawing a lot more TLs and channels, I do take significantly more anticipatory trades at the lines than I used to. I really like those early entries with tight stops.
Quote from Xspurt:
Perfect
If you only knew who did that chart.
El Maestro de los Maestros!
ESD
Some people would short there. From what cornix has shown, that looks like a location where he might try a short with a tight stop.
For me, I've been waiting for confirmation before entering. A take-out of the previous bars hi/lo. So there was no entry there. It's a trade-off. If you're more aggressive like cornix you'll have more losses, but they'll be small. If you are more conservative you'll have fewer losses, but they'll be larger. Of course size of stop on the aggressive entries will effect results quite a bit, too tight and you'll get kicked out in noise, too wide and etc... If I remember right, NoD did lots of backtesting on CL 5-min charts to determine which method gave the best results for her style of trading and I think it was the latter.
Quote from EON Kid:
Best let sleeping dogs lie
Keep this thread on topic please
Funny considering he controls the flow of info on this thread.
He taught Metal, taught NAD, taught me.
New info is provided as he allows it.
I suggest you be nice to him or the flow of new info will stop.
ESD
Here's what I had for today's 6e session.
1.. Long around 3:30. I was initially looking for a short, but was thinking that price had been in this channel for quite a while so don't be surprised if it stops me out. But the entry never triggered and I decided if it broke out above the last two bars highs, I'd go long.
2. Short in the yellow down channel around 7:00. I missed this one in real time but figured I'd show it anyway. I had the channel drawn a little differently as I was drawing it off the highs and copying it down to the lows. You get the yellow channel if you draw it off the lows (across the bodies, not wicks) and had you done that it could have been in place for the short entry. I just didn't see it.
3. Long at 10:00. I passed on it because it looked like a double top just prior, and the channel was so steep anyway. The double top was also at resistance from the 4:00 high so I figured it wasn't worth a shot. Still seems like good logic to me. If price had gone down from there I'd be patting myself on the back for staying out.
1.. Long around 3:30. I was initially looking for a short, but was thinking that price had been in this channel for quite a while so don't be surprised if it stops me out. But the entry never triggered and I decided if it broke out above the last two bars highs, I'd go long.
2. Short in the yellow down channel around 7:00. I missed this one in real time but figured I'd show it anyway. I had the channel drawn a little differently as I was drawing it off the highs and copying it down to the lows. You get the yellow channel if you draw it off the lows (across the bodies, not wicks) and had you done that it could have been in place for the short entry. I just didn't see it.
3. Long at 10:00. I passed on it because it looked like a double top just prior, and the channel was so steep anyway. The double top was also at resistance from the 4:00 high so I figured it wasn't worth a shot. Still seems like good logic to me. If price had gone down from there I'd be patting myself on the back for staying out.
An anticipatory short allows a tight stop if done where you indicated, and you'd have scratched the trade off the 1-min price action (not shown, but I can see it in my head as I use that sort of setup a lot to position for a breakout of a level).
The thing that would stop me from taking an anticipatory short position is the 1-2-3 reversal setup by way of the 9:30-9:45 bars and price finding that double support near a longer term LTL combined with the size of the bull bar leading to the upper line. I'd have been long the break of the 9:35 bar high, and watching how price reacts to each R level in line on the way up (assuming it continued up). The fact price ran to the upper line in a single bar tells me buyers want in badly. A 1-min chart will show a clear pullback entry to the long side, for a breakout of the upper channel line, at which point the HOD is in play.
Channels eventually break out. The breakout to the downside was shallow, and a longer term LTL was nearby. the speed with which price runs to the upper channel line off the 1-2-3 reversal setup is a bullish sign, not a bearish one.
