Message I received from someone, some of the info may help others. My answers in bold.
ESR,
I've had your levels on my screen everyday for while now. I've been trying to incorporate them into my trading. Often times using them as profit targets and stops. And they've helped a great deal.
<strong>Thats good to hear : )</strong>
A quesiton or two.
With Mean Reversion, are you sometimes entering trades that are contrary to the trend?
<strong>Yes a lot of my trades are contrary to the prevailing trend, on strong trend days i use "dynamic" S/R to roll with the trend. I primarily think of myself as a counter trend trader, believe it or not I find trend trading harder</strong>
Example, @ 11:26 we're clearly in a hard sell-off. But we've got a bar piercing the BB, and bumping into support at that time.
<strong>Yep, I took a loss on that one also, sometimes the method doesnt work and we get a level blown through even with a good set up. On this particular trade I entered when I thought the down force in price action was decreasing, I got it wrong on that occasion. It does happen, as with any method. Thats where trade management and keeping your risk to reward at optimum levels comes in. Yesterday was a very good day for me and anyone following the levels, many very profitable trades were on the table. </strong>
But looking towards reversion, 11:26 and 12:07, we've got this criterion met, but we're blowing righ through the levels.
<strong>This is where experience comes into play. We've had a VERY volatile market the last few days if price action is hitting your area with force you have to make judgement calls. The ability to read price action comes with screen time and practice in different markets. Think about it logically I "predict" these areas using past market action, you cannot rely upon that alone. Ultimately your trade in that area is governed by a set up and the action of price in that area. You take a trade only with a set up and price action on your side. If price is running like a mad bull at your area its unlikely it will hold....ultimately being able to read price action comes with time and experience.</strong>
Also, are you looking for a CLOSE above the BB?
<strong>Close above the BB not so important to me, I am looking for my entry to be outside the bands, the further out the better.</strong>
.. saw a red spinning top at 11:29 and because of strong rally earlier I figure I should take longside trades with 55.50 becoming support, and 20EMA was lining up with 55.50, maybe I got lucky or is it the analysis?