A simple price action approach
- Thread starter metal
- Start date
Here's how I use channels (trend lines and parallel channel lines)
1. In my main trading time frame (5min) I look at the 80-90 price bars leading up to the hard right edge and draw any applicable trend lines and parallel channel lines. If there's no clarity within that view I double (or possibly even triple it) and draw any applicable lines.
2. In a time frame 12x my main trading time frame (60min) I draw major trend/channel lines 2 to 3 weeks back and then draw minor trend/channel lines 2 to 5 days back. When price reaches these levels I watch the price action for signs of a trend reversal in my trading time frame. For example, Friday's abrupt selloff in crude oil (CL) found support at a lower trend line that extended across the lows of 1/14, 1/16, and 2/6.
I only anticipate these lines holding as S/R at profit-taking levels; I do not anticipate them holding as entry levels. I look for confirmation on my entries. Confirmation means I have a stop order in place to initiate a trade, or I place a limit order to initiate a trade on a post-confirmation pullback.
For entries, I use a smaller time frame (1min) and I've demonstrated early in this thread one of the ways I use a smaller time frame for entries.
I redraw lines when price prints new swing highs or swing lows.
Is "second mouse" a known trading term? I suspect I understand what it means. It means basically wait for a retest of a trend line before getting in, correct?
Not sure how well-known but I heard it from buddy traders since a few years ago. Basically it means when the first try of a price to go somewhere fails, but is quickly followed by the second attempts to go in the same direction aka "second mouse getting the cheese (while the 1st one being smashed by the trap)".
\Quote from metal:
Just took this long on 6e. Stop is under those two double bars sticking out through the trendline. Target is in the 1.4274 area at this time.
metal
This quoted post is as far as I have gotten thus far in this thread, which i am studying closely. I do not see any difference between the so-called nuance trade, which was just introduced by Metal, and what we have been learning thus far. In other words, the nuance trade looks exactly like the TL trade techniques that came before. Obviously I am not grasping the what is different in the nuance trade from previous teachings. I'm loving it (the thread, that is).
Here's a tip...in order to trade bigger size and avoid competition eventually you must develop a way to "anticipate" the entry and buy as the market is coming down to you / sell as the market is coming up to you...
using stop orders to enter and/or waiting for pullbacks to enter will lead to frequent misses of the juiciest trades
C:\Users\computer\Documents\YM 03-13 (1 Min) 08_02_2013.jpg
15:40 - 16:35 the market sells off, but in terms of order placement, what is the price action not doing?
15:40 - 16:35 the market sells off, but in terms of order placement, what is the price action not doing?
C:\Users\computer\Documents\YM 03-13 (1 Min) 08_02_2013.jpg
16:35 - 17:35. The market doesn't want to trade above 13950 and begins to trade below 13945.
The market is inflexible, it doesn't bend, although charts tend to give the impression of flexibilty.
16:35 - 17:35. The market doesn't want to trade above 13950 and begins to trade below 13945.
The market is inflexible, it doesn't bend, although charts tend to give the impression of flexibilty.
Approx. 17:25 13945 becomes the new selling price. But, we want the better price, we want 13946, and to get filled at best bid on the offer the market effectively has to come over you...then trade in the desired direction.
Nerve, precision and focus. Hard to keep when you are dealing with the unknown, losses and expenses.
Nerve, precision and focus. Hard to keep when you are dealing with the unknown, losses and expenses.