Is It a Reversal or a Pullback?

[schizo]

So now I don't really give a hoot if I nailed the exact trend high or low, or got out too early or too late. If I got a big fat winner, guess what, that's all it's about. The best part is I don't have to spend another 13,000 hours at the computer screen with my notes, studying the charts for the perfect reversal formation that doesn't exist. Beautiful, isn't it?

That's absolutely gorgeous.

 

[schizo]

Measured moves using price can and sometimes do work, as the images posted earlier in this thread shows. But they don't work often enough in my experience to lend them much weight. Schizo may disagree with good reason.

Since it has already been covered elsewhere, I will briefly mention that measure moves come in two flavors: price and time. People often get hung over on the former without giving due diligence to the latter. Apply the latter with the momentum and you have a TNT in your hand!

 

[achilles28]

Since it has already been covered elsewhere, I will briefly mention that measure moves come in two flavors: price and time. People often get hung over on the former without giving due diligence to the latter. Apply the latter with the momentum and you have a TNT in your hand!

Thank you. I'll PM you sometime. Maybe you can teach me

 

[schizo]

At the end of the day, most of what I posted is really of minimal importance in trading. I'm of the thought that trade management is of 95% importance to a trader. I want to thank Buy1Sell2 for that, because he really drilled that into my head in the Psychology and Trade Management forums, to my great benefit. Entries, which is what we're talking about here, right now, are about of 5% importance. Who cares if you get the pullback right or wrong. It doesn't matter. What matters is HOW YOU as a trader respond to your loss.

This might sound too simplistic, but can you not use the reversal (failed pullout) as the stop loss? Stay in the trend until the pullback is breached. I don't see why the two needs to be diametrically opposed to each other.

 

[achilles28]

This might sound too simplistic, but can you not use the reversal (failed pullout) as the stop loss? Stay in the trend until the pullback is breached. I don't see why the two needs to be diametrically opposed to each other.

Like using the pullback bottom as the stop loss level, and trading with the trend? Sure, its a great method and how most traders do it, afaik. The problem from my perspective is that pullbacks come in many waves. Waves counted by V bottoms (in an uptrend). By that I mean a HL-LL-HL formation. So maybe after the first V bottom in a pullback in an uptrend, I go long, place my stop just below that V bottom expecting continuation. Then price makes another low (or a few more), then goes on to make a new trend high. This is why I got away from using PA strictly for entries, and see trendlines or MA's more accommodating and useful for pullbacks. I think you posted a chart earlier in the thread measuring a pullback with a trendline? On the flip side, if a trader wants to take little nips at the pullback, and okay to get stopped out a few times from a multi-leg pullback, I think that's okay. So long as they measure risk correctly.

I hope I understood the question correctly. Perhaps I did not.

 

[schizo]

Like using the pullback bottom as the stop loss level, and trading with the trend? Sure, its a great method and how most traders do it, afaik. The problem from my perspective is that pullbacks come in many waves. Waves counted by V bottoms (in an uptrend). By that I mean a HL-LL-HL formation. So maybe after the first V bottom in a pullback in an uptrend, I go long, place my stop just below that V bottom expecting continuation. Then price makes another low (or a few more), then goes on to make a new trend high. This is why I got away from using PA strictly for entries, and see trendlines or MA's more accommodating and useful for pullbacks. I think you posted a chart earlier in the thread measuring a pullback with a trendline? On the flip side, if a trader wants to take little nips at the pullback, and okay to get stopped out a few times from a multi-leg pullback, I think that's okay. So long as they measure risk correctly.

I hope I understood the question correctly. Perhaps I did not.

Alright, let me divulge another unholy grail. This is today's PA. You will see that the boxes line up perfectly (eg. measured move), price and time wise. You not only know where the price target is, you also can time the move almost to the fat T. This is the miracle of "buffer zone".

Moreover, it's sensible to use the boxes as both the breakout and stop.

 

[der_kommissar]

This. Nobody knows how long the trend will last, or if it's reversed already...

Great stuff, achilles...You have a gift for writing (mostly I've seen it in P&R), but this was really exceptional stuff...Almost brings back memories of a few of Darkhorse's posts from way, way back in the day.

 

[der_kommissar]

Alright, let me divulge another unholy grail. This is today's PA. You will see that the boxes line up perfectly (eg. measured move), price and time wise. You not only know where the price target is, you also can time the move almost to the fat T. This is the miracle of "buffer zone".

Moreover, it's sensible to use the boxes as both the breakout and stop.

Yes, time and price symmetry is found all the time in the indicies...Not just on those shorter tf's, but alot of those major swings...although past few sessions, it has been a bit messier...

 

[achilles28]

Alright, let me divulge another unholy grail. This is today's PA. You will see that the boxes line up perfectly (eg. measured move), price and time wise. You not only know where the price target is, you also can time the move almost to the fat T. This is the miracle of "buffer zone".

Moreover, it's sensible to use the boxes as both the breakout and stop.

View attachment 161205

This is very interesting. Boxes are something I've never studied before, so I'm unsure how to draw them based on what parameters. Like what determines the time length of the first box? The height of the first box (price function) appears to be established by the extremes of the 11:05 and the 11:35 candle. But why does the length of the box (time function) extend from the 10:00 am candle to the 12:10 pm candle? I remember seeing this too in the obvious thread....

 

[achilles28]

Great stuff, achilles...You have a gift for writing (mostly I've seen it in P&R), but this was really exceptional stuff...Almost brings back memories of a few of Darkhorse's posts from way, way back in the day.

Thank you brother. You too Darkhorse is actually one of the old posters I got alot of ideas from. Another guy who liked to pyramid...along with Anek.