Keeping It Simple
- Thread starter dbphoenix
- Start date
Hi DB,
i got in at 10:10 TS6 time at the break of 1030.50. I drew a trend line on the 5 min chart from 10:39 to 10:57 bars and got out on a break below the 11:00 and 11:03 lows. Was 11:00 exit a mistake, i seemed to get most of the move but maybe i was mistaken getting out there. Let me know DB. Thanks.
Jerry
Getting in at 1030.5 was correct. As for the exit, there was no "point" to use to draw a trendline after the 1025 reaction low, so the only TL to draw was from the opening low, across the 0925 and 1025 lows. A break of this would get you out at close to the same point, but you'd be using more legitimate trendlines.
Trendlines, though, aren't your only choice. Note that price was close to reaching the target for the day. Once it got within 10% of the target, you could have elected to use trailing end-of-bar stops, which would have got you out at 1037 (on a 3m chart).
You seem to have the idea, though. And you made only one trade.
--Db
Though reversals are not an integral part of the strategy I've posted, there are simple ways to play them, the specifics of which I've already posted. And though trading on a day like today might take extraordinary patience, that's what the sort of strategy I've posted is all about, and today provides a good example of the sort of rewards that are available if one knows what to look for, can be patient enough to wait for it, and can withstand the temptation to take a lot of boredom trades.
Whether one used my strategy to enter long or not today, a reversal setup presented itself when a reaction low was created around 11:21 at 1139.5. After noting the weak rally attempt, one could have entered at 1137.5 at 11:46 (the 2pt entry is part of the strategy I've posted). The 1139.5 level was subsequently tested twice, but came nowhere near a 5pt stop. After that, it was only a matter of waiting for an opportunity to move the stop to breakeven.
Even though breakeven took more than TWO HOURS, there was no need to fool with the trade. When the futures tanked, the trader was already there ready to take advantage of the drop. Since price "ramped", and since price was close to the target for the day, a trailing end-of-bar stop was called for, which could be placed at 1028.5 at 1408 (I say "could" because one could also have continued to trail the stop above the next two 3m bars, but, since price had not yet actually reached the day's target, one could also opt to leave it at 1028.5 and see what a bounce could accomplish).
Leaving the stop at 1028.5 would enable the trader to wait until price did in fact reach the day's target, then move the stop down to 1025 at 1448. At this point, one could either leave the stop where it was and look for an "overshoot", or follow it on to the top of the next bar at 1021.5 (stop at 1022.5). If he left it at 1025, he could then follow the stop down to the 1333 bar for 1019.5, or possibly wait for the close (my preference would be to take the 1019.5, since it's the third leg down and the hour late, which would be a profit of +13 if one had taken the initial long entry and taken the 5pt stopout).
Granted there's no way to know in advance that these mini-rallies and collapses will take place. But that's the nature of trading. No hindsight is necessary here. Every step of this trade follows criteria that have already been posted.
--Db
Whether one used my strategy to enter long or not today, a reversal setup presented itself when a reaction low was created around 11:21 at 1139.5. After noting the weak rally attempt, one could have entered at 1137.5 at 11:46 (the 2pt entry is part of the strategy I've posted). The 1139.5 level was subsequently tested twice, but came nowhere near a 5pt stop. After that, it was only a matter of waiting for an opportunity to move the stop to breakeven.
Even though breakeven took more than TWO HOURS, there was no need to fool with the trade. When the futures tanked, the trader was already there ready to take advantage of the drop. Since price "ramped", and since price was close to the target for the day, a trailing end-of-bar stop was called for, which could be placed at 1028.5 at 1408 (I say "could" because one could also have continued to trail the stop above the next two 3m bars, but, since price had not yet actually reached the day's target, one could also opt to leave it at 1028.5 and see what a bounce could accomplish).
Leaving the stop at 1028.5 would enable the trader to wait until price did in fact reach the day's target, then move the stop down to 1025 at 1448. At this point, one could either leave the stop where it was and look for an "overshoot", or follow it on to the top of the next bar at 1021.5 (stop at 1022.5). If he left it at 1025, he could then follow the stop down to the 1333 bar for 1019.5, or possibly wait for the close (my preference would be to take the 1019.5, since it's the third leg down and the hour late, which would be a profit of +13 if one had taken the initial long entry and taken the 5pt stopout).
Granted there's no way to know in advance that these mini-rallies and collapses will take place. But that's the nature of trading. No hindsight is necessary here. Every step of this trade follows criteria that have already been posted.
--Db
Sorry, Jerry. I didn't see your post before I made mine. Think about the conditions for backing off a little on your exits. You may choose to go ahead and just take the money with EOB stops, but think about why you're doing it: whether you have good reasons for taking those profits or whether you're just too nervous about holding onto them.
--Db