Quote from ChkitOut:
do you also bet against a pivot high or low for a failed break out trade by simply placing your order to buy the prev low or sell the prev high? or do confirm with bar formations instead of just placing your order at specific level??
IMHO, this looks like a profitable tactic in chop/range around a flat 20EMA. Interestingly, my homework this weekend is to compile stats surrounding this strategy and determine whether I want to add it to my plan. I've done it a few times. It's currently an out-of-plan trade, which I like to call OOPs, because most of my out-of-plan trades fail, lol. This one has worked well though.
I'd never do it in a defined trend, though. If price fails to break a previous high or low by more than a few ticks, I wait for an in-plan setup for a "confirmed" counter-trend entry.
Quote from ChkitOut:
so if you used this strategy on thursday on ES would you not do anything until the 13:15 bar? Because there is no break of a major swing h/l until that time? even though it "looks" like a trading range day..
using the 1 minute tactic does that mean you'd be buying the 13:34 bar @ 1521.75 (1 tick above ema) and then would you exit @ 13:40 bar because it closed below the ema and below the previous pivot low? or would we stay with the trade? or am i not doing this right?
If the two strategies I described in this thread were the only strategies in my trading plan, I would not do anything until the break out of the range. On my chart price never closed
below the 1min 20EMA, it closed at the 1min 20EMA, so there's no reason to scratch the trade.
On the other hand, I'm pretty sure if I bought 1521.75, I would scratch the trade following the 1-tick failed break of the previous high. That would be a discretionary reaction on my part. As you can see, this deviation from plan would've cost me a full profit target.
Another thing to consider is that there's no technical reason not to hold this trade for full stop or target because that previous range resistance breakout (1520.75) is well-contained within the initial 8-tick stop on the trade.
I recently worked with a trader who wants to trade for a living. She was looking at too many things, trying to manage too much information, and was basically trading from a state of confusion.
I explained to her this trend continuation tactic and told her to practice trading this and nothing else. There were days when it presented itself one time. That teaches you patience. Then there were days when it was an ATM machine. That reinforces how patience and discipline get rewarded in trading.
My price action trading plan started out with only the 5min time frame and a very specific setup. It was difficult enough for me to get aggressive with that single setup. If I was trying trade everything (chop, range, triangle breakouts, NR7's, Fibs, phases of the moon), I think I'd have given up long ago.
