how to manage false breakouts on NQ ES

Quote from Magna:

Jack, thanks for your commentary as always. Today (Wed) was a perfect example of what we were talking about yesterday, you have a rocket bo soonafter 10a, then a severe volume fall-off on the 1min indicating a failure, so beginners might do a wash exit. But if you reverse and go short right on the VDU around 976.50 (actually there were two VDU's in a row at 10:09 and 10:10), then you got nailed as the bo continued upward about 6min after the VDU's with full force. That's why I was essentially asking if you reverse right at the VDU or wait for some other confirming signal.
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Beginners hang out on the 5 min and I hope they were in on the rocket at sync or at latest by 10am. Their rocket exit was about 11am plus. In again at 15:15 or so and out at 15:45 or so.

Ice bergs in with beginners nad out at 12:05 or so. In at 12:15 and out at end of day. Just two long trades.

If an expert is on the 1 min chart the first formation is a FTP and it ends with VDU and a BO up as expected. they could set brakets after sync on the initial congestion and then see the centering vis a vis the FTP. They are in at 10 and got to pace of market by finding the "tape". the tape trend is fouind after point 3. Point 1 is 10am point 2 is 10:03 and point 3 is 10:14.

First "flaw" is at 10:45. This heads up is that the traverse from right line to left line fails. We are now out of "continuation" mode and into "change" mode.

We will reverse as dictated by future signals. We get four signals:
Volume VDU, MACD div, STOC div, and BO on channel. So we ease on down the road by taking profits and our entry.

By keeping lists for sequences we can monitor and just check off the signals as they occur and do our reverse where we want to.

If an expert waits for more signals; he continues to get them.

My one minchart is annotated below
 

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Quote from Ditch:



Although my name is not Jack, i like to on comment this. Riding this trend was a no-brainer when you look at price-action. Yesterday was a congestion-day, the market traded back and forth in a narrow range inside the previous day's range, so this favors a breakout. The first half hour was spent in a 3-point range awaiting the news. Within 3 min the market rose 5 pts, pretty strong breakout, i guess, then if refused to retrace below 1r, and below ema-20, indicating strong upward monentum. So imo, price action rules, not volume, or trin,tick and all that crap.
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Definitely a no brainer as usual.
 
Quote from jack hershey:

Beginners hang out on the 5 min and I hope they were in on the rocket at sync or at latest by 10am. Their rocket exit was about 11am plus. In again at 15:15 or so and out at 15:45 or so.

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Thanks for your answers and the chart. I must be misunderstanding something regarding the MACD, so please correct me. Using your settings of 5,13,6 here are my MACD histogram readings this morning starting with the 9:35 bar (5m chart):

9:35 bar (closes at 9:40): -0.20
9:40 bar (closes at 9:45): -0.20
9:45 bar (closes at 9:50): -0.03
9:50 bar (closes at 9:55): -0.02
9:55 bar (closes at 10:00): -0.02
10:00 bar (closes at 10:05): .42

As you specify +/-.40 (respectively for longs/shorts) I don't see how a beginning would have entered a rocket at sync or even by 10am. The earliest I see would be when the 10:00 bar closes at 10:05 (producing the MACD reading of .42), which of course is just after the huge spike-up due to the ISM Services report today at 10:00am.

And towards the end of the day:

15:10 bar (closes at 15:15): .12
15:15 bar (closes at 15:20): .24
15:20 bar (closes at 15:25): .28
15:25 bar (closes at 15:30): .51

Again, it wouldn't be til the completion of the 15:25 bar at 15:30 that the MACD would meet your minimum requirement.

Two questions come to mind:
1. Are you suggesting that a beginner ignore MACD if Stoch and Vol meet the requirements?
2. Even if the MACD had been .40+ prior to 10:00am this morning, would you recommend waiting for gov't reports (which almost always cause spiking and strong moves) or simply jump on board early and hope (ugh...) for favorable reports.

Thanks again.
 
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