how to manage false breakouts on NQ ES

I think this is what Jack is trying to say:

A= lull before the storm = congestion, penants, NR7, etc

B= breakout

C= retracement/reverse in trend

Volume confirms a breakout
increasing = continuing trend
steady = no direction, drift
decreasing = impending change in trend

Look for a bar with extremely low volume - that is the turning point

Reverse your trade at that point.

Note - you can't trade these concepts on a tick chart because there is no volume data.

pretzel
 

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I'd never expect to get so many replies on my first post, actually I thought this was just a newbie question...Happy to note that there is so much interest also by skilled traders on this topic.
Thanks to everybody.
I guess my problem with trading retracements is just a matter of mental attitude, since I always treat retracements as they all were inversions, but in fact they're not. I think I'll do a little paper trading in these days to test how I can manage pullbacks.

I'm afraid I still have to work on it a lot, Just hope I don't run out of bucks first!!:D :D

Bye
Pawpaw:D
 
Quote from pawpaw:

I'd never expect to get so many replies on my first post, actually I thought this was just a newbie question...Happy to note that there is so much interest also by skilled traders on this topic.
Thanks to everybody.
I guess my problem with trading retracements is just a matter of mental attitude, since I always treat retracements as they all were inversions, but in fact they're not. I think I'll do a little paper trading in these days to test how I can manage pullbacks.

I'm afraid I still have to work on it a lot, Just hope I don't run out of bucks first!!:D :D

Bye
Pawpaw:D
More...

Yes, we're too just lazy to start another thread. Thanks for starting it.

pretzel
 
Quote from pawpaw:

I guess my problem with trading retracements is just a matter of mental attitude, since I always treat retracements as they all were inversions, but in fact they're not.
More...

The retracement works to your benefit if the breakout is genuine in that it gives buyers a second chance to enter a trade they thought they'd missed. Of course, there have to be buyers and they have to feel as though they're missing something. If these conditions don't exist, you're looking at a failed breakout.
 
Quote from jack hershey:






As you know I am here to get you all to be millionaires. Gary Smith in his book commented on making about 900,000 in a day net. LOL... well It takes me about 20 trades to get into that situation and 30 trades to get out. You know, as a one day event.
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Well, we appreciate that Jack. You mean it takes Jack
Hershey 20 trades just to make $900,000. I figured for
a trader of your caliber it would only take about 5 trades...hehe

Just kidding, and thanks for your posts. :D
 
Quote from pretzel:

I think this is what Jack is trying to say:

A= lull before the storm = congestion, penants, NR7, etc

B= breakout

C= retracement/reverse in trend

Volume confirms a breakout
increasing = continuing trend
steady = no direction, drift
decreasing = impending change in trend

Look for a bar with extremely low volume - that is the turning point

Reverse your trade at that point.

Note - you can't trade these concepts on a tick chart because there is no volume data.

pretzel
More...

I think all kind of secondary indicators, like volume and market breadth, aren't indicative of the future direction of the market. IE, th last rally took place with lousy internals, but so what? My advice is to look at what you trade and that's price action.
 
Quote from Ditch:



I think all kind of secondary indicators, like volume and market breadth, aren't indicative of the future direction of the market. IE, th last rally took place with lousy internals, but so what? My advice is to look at what you trade and that's price action.
More...

Right, trading naked, meaning without indicators.


pretzel
 
Quote from pretzel:

I think this is what Jack is trying to say:

A= lull before the storm = congestion, penants, NR7, etc

B= breakout

C= retracement/reverse in trend

Volume confirms a breakout
increasing = continuing trend
steady = no direction, drift
decreasing = impending change in trend

Look for a bar with extremely low volume - that is the turning point

Reverse your trade at that point.

Note - you can't trade these concepts on a tick chart because there is no volume data.

pretzel
More...

See attached to add some detail.
 

Attachments

Quote from pawpaw:

I'd never expect to get so many replies on my first post, actually I thought this was just a newbie question...Happy to note that there is so much interest also by skilled traders on this topic.
Thanks to everybody.
I guess my problem with trading retracements is just a matter of mental attitude, since I always treat retracements as they all were inversions, but in fact they're not. I think I'll do a little paper trading in these days to test how I can manage pullbacks.

I'm afraid I still have to work on it a lot, Just hope I don't run out of bucks first!!:D :D

Bye
Pawpaw:D
More...

Which entry would you prefer? The dig dick entry or the chicken one?
 

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