Made a 10 point move off the bottom.
Disprove This Trend
- Thread starter Fundlord
- Start date
Handle, would you mind explaining about the Quads. How do you define if it is a top or a bottom. Thanks.
This occurred today on a 5 minute chart of the SP500, can someone tell me everything thats wrong with taking a trade like this.
Instead of trying to predict what will happen 5 days, 5 weeks from now how about trading an impending fast price move ?
The only drawback would be staring at a screen all hours waiting to snipe maybe just one or 2 trades a day.
Because your pic is not clear, I'd say just from your text, that ONE problem would be if this was a spike. Here you'd have spike traders buying.
Each market has different amount of ticks to show it within range of being called "equal" high/low, so like ES, from highest pivot high to lowest pivot high can not be greater than 2 ticks, so I watch previous pivot highs and current high which might not be completed pivot high is within defined rule of pivots, then I will either do breakout, or I can watch for breakout and put in limits to sell 2 ticks better (price has to come back), or if bar is very big by the time of the breakout, require many ticks to retrace to take short or pass on the trade. My testing has proved to be at this time, and tested each month, normal waves within a swing is about 4 points then price snaps back for consolidation which often gives retrace signals back to moving averages. What ES does most of is whatever last pivot is tries to break it by two ticks to hit protective stops, so targeting this is often conservative areas to take profit, now depending on how conservative one is, if breakout is too close to previous pivot, would pass on the trade. As far as selling right on the highs, my losing percentages go up too much to warrant me doing so.
I am much better at getting in counter-trend than take with the trend whether in day trading or very long term commodity trading, but have limited trend trades. But for me counter-trend signals like triple/quad tops and bottoms, H&S and BB failures offers lowest losing percentages for me. But you have to understand, I built my systems to have very low losing percentages cause I average down on all signals and some weeks I will have 55% plus one tick trades and hoping for many add-ons getting out near the plus one tick on orginal trade, I will get few to several trades of $100, but I am quite happy getting plus one tick as it means ES is staying in chop. And chop s controlled market.
I been a chop day trader many years and that is most consistent way to make profits for me. I had back tested number of Options systems past 18 months and now fully trading a method where it seeks choppy stocks/ETFs, and again works well on option decay, but since even chop can trend and strong money management rules is going to be the difference between being profitable and losing.
The great thing about trading, you can have two traders that each have developed their Trading Plans and so long as you do same things over and over, you can do well. I see that chart and I see 2/3rds of it in uptrend so trend signals taken and some counter trend, given market does go far enough to trip protective stop areas, two traders can both profit.