A simple price action approach
- Thread starter metal
- Start date
I had looked at the 1-hr but haven't been paying much attention to it. Trying to get these patterns down in real-time can be enough to get my head spinning as it is, without getting into multiple timeframes!
I had the lower TL a little different than yours though. Mine was on 6E and I notice yours is on the EUR/USD. I've noticed that lines don't always match up on the two of them. The forex pair is probably more widely followed than the futures so maybe I should draw my lines on that. Any thoughts?
Quote from NoDoji:
I'm pretty sure this is what Josh has been trying to scramble my brain with recently
In that particular configuration, no--the footprint chart is showing buy volume versus sell volume AT PRICE ... on my charts you simply see buy volume versus sell volume PER BAR, whether that bar be time-based or otherwise. You are doing very well ND, please don't let my mostly unnecessary little portion of the chart window do any scrambling of your current success!
Yes I would. In fact, because the previous support zone happens to be at almost the same price as the falling 20 EMA and the near-term uptrend trend has broken, I would likely have had a standing offer to sell somewhere in there, hoping for a fill.
The 20 EMA is a mobile S/R, so I can't tell what the precise price level was at that time, but I'm assuming it was pretty close to where it is on your posted chart.
The mistake we tend to make is that we sometimes give ALL our trades room to work when some trades don't deserve any extra room and these are counter-trend trades. If I put on a counter-trend trade I need to see some momentum break through a previous level in my favor, or I'll scratch the trade, and maybe reverse.
The long trade was looking quite counter-trend at that point, despite the fact that price appeared to be holding slightly above the pre-breakout consolidation support level. Price had already broken the previous support level (which also broke the 20 EMA) and then it broke the LTL.
Your brain is still stuck in an uptrend, but what you're seeing in front of your eyes is a fully confirmed trend reversal in your time frame. This means you look to short a pullback to previous support/20 EMA or the previous LTL if it holds as resistance. A short of the break of the 3:00 bar low would've been a clean setup for me.
Once a key level in a trend breaks, anticipatory trades in the direction of that trend become risky. In a well-defined trend you may comfortably place a limit order at a TL or MA with a tight stop and the expectation that the previous high or low will be tested and may very well break out to a new high or low. But once a key level breaks, wait for confirmation to trade back in the direction of the trend. In the trade we're discussing, confirmation would be a break back up through the 20 EMA, possibly a close above it, then a pullback to a higher low. In the meantime, the up trend is no longer intact in this time frame.
Quote from themadman:
Horizontal lines got some uses at the proper spots but the dynamic diagonals are far superior the comparison is not even close, the precision is not even close, the occurance is not even close.
Takes a few more years of price action to actually visualize it.
Less 20 EMA more lines
THE Madman
madman, I hope you will show us some more nice charts and share some of your experience!
Madman works in mysterious ways.
Sometimes he gives green light to share high quality info other times he forbids a person from posting until further notice.
As of of now he has halted us, let's wait until a day when he wakes up feeling altruistic and you'll notice one of us sharing good stuff.
He loves to play games but it's through silly little games from him that I learned how to live off trading.
NAD
1. Notations are in the eye of beholder. Not a single chart posted by his followers at the end of the day, correctly anticipates what must come next tomorrow.
2. This requires the ability to differentiate between retrace and reversal. Spydertrader advised his followers to trade the trendline breaks. This strategy will lose money consistently.
3. See above.
4. The market consistently refuses to recognize the green bookmark as a signal for reversal.
5. This will triple the loss from incorrect entry.
6. This is not how the market works.
7. See above.
