how to manage false breakouts on NQ ES
- Thread starter pawpaw
- Start date
most breakouts on ES get faded these days, true.
imho 2 things will help:
1. If you're in on a breakout, it breaks out with a good volume spike and then immediately gets faded, bail out RIGHT AWAY. Don't wait to see what happens. 99% of times it will lean and you'll take a large loss. Just get out RIGHT THERE for breakeven.
2. Trading these days is about PREDICTING. That's right, the P word. There used to be an idiom "the game is to react, no to predict". imho that advice is similar to "the game is about throwing your cash to the sea". These days the game is all about predicting. "Anticipating", whatever you call it. You need to have a full scenario in your head and go in only if it materializes. Don't REACT to any 1min triangle setting up, because most of them get faded.
Combine these two and you're set. However takes a lot of discipline. It also means that you'll sit on your hands almost all day, if not all week. However you'll be profitable, thanks to the few good trades that you will take and to the tens of bad trades that you will avoid. Worth it? You decide.
Cheers
50
imho 2 things will help:
1. If you're in on a breakout, it breaks out with a good volume spike and then immediately gets faded, bail out RIGHT AWAY. Don't wait to see what happens. 99% of times it will lean and you'll take a large loss. Just get out RIGHT THERE for breakeven.
2. Trading these days is about PREDICTING. That's right, the P word. There used to be an idiom "the game is to react, no to predict". imho that advice is similar to "the game is about throwing your cash to the sea". These days the game is all about predicting. "Anticipating", whatever you call it. You need to have a full scenario in your head and go in only if it materializes. Don't REACT to any 1min triangle setting up, because most of them get faded.
Combine these two and you're set. However takes a lot of discipline. It also means that you'll sit on your hands almost all day, if not all week. However you'll be profitable, thanks to the few good trades that you will take and to the tens of bad trades that you will avoid. Worth it? You decide.
Cheers
50
Hi 50 cent,
Don't get the guys around here all jacked up again by raising the "Prediction/Anticipation" question anew. ET had to allot some extra disk-space already to hang on to all the smart commentaries.
I share your view completely. Let's better trade on it and make some money. I have given up trying to convert people. Leave this up to Harry.
nononsense
hey nononsense,
cool, i wasn't trying to convert anyone.. it just that it took me a while to find out what seperates my good trades from my bad ones. turns out that in almost all my good trades, i was predicting, and in almost all my bad trades, i was reacting. cost me a lot of money to make that distinction! and still hard to sit on my hands when the market appears to shoot without me.. however 2 seconds later i get rewarded.. when it gets smothered...
cool, i wasn't trying to convert anyone.. it just that it took me a while to find out what seperates my good trades from my bad ones. turns out that in almost all my good trades, i was predicting, and in almost all my bad trades, i was reacting. cost me a lot of money to make that distinction! and still hard to sit on my hands when the market appears to shoot without me.. however 2 seconds later i get rewarded.. when it gets smothered...
Hi 50 cent,
I was only poking some fun.
FWIW, the thing you have to sort out is to know when you are "predicting" and when you are "reacting". From then on things will fall in place for you.
Be good,
nononsense
Quote from nononsense:
FWIW, the thing you have to sort out is to know when you are "predicting" and when you are "reacting". From then on things will fall in place for you.
Yes you are right. I also found that after a killer trade, that gave me some big bucks, I tend to react a lot more. Trying to re-live the experience or something, I develop a gambler's mentality. Although that initial killer trade was well planned and came from predicting and not reacting. A good example was the last Fed day.
But I guess that's a post for the psy forum.....
Usually, if the previous day was in a narrow range, pp, support and resistance tend to be broken easily the following day for the simple fact that the spread between the pivot point and the four resistance and support levels will also be narrow.
Example:
Yesterday (Oct, 11) was Columbus Day, volume on the ES and NQ was very thin (spread between high and low was 10 points only!!)
What ended up happening is that the distance between R2 and S2 was 21 points only.
Because of that, all of the levels were constantly broken.
At the beginning of the trading session, I got a 4 points hit after it broke from the 1430.5 level (partly due to lack of discipline) , I had to readjust my strategy by forgetting about the PP that is based on previous day's high, low and close and instead follow the intraday ones.
The end result was that these PP held!
Example:
Yesterday (Oct, 11) was Columbus Day, volume on the ES and NQ was very thin (spread between high and low was 10 points only!!)
What ended up happening is that the distance between R2 and S2 was 21 points only.
Because of that, all of the levels were constantly broken.
At the beginning of the trading session, I got a 4 points hit after it broke from the 1430.5 level (partly due to lack of discipline) , I had to readjust my strategy by forgetting about the PP that is based on previous day's high, low and close and instead follow the intraday ones.
The end result was that these PP held!