Making of a method
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Thoughts during adverse movement:
Case for: Price had previously failed to break potential S of 94/95 (connecting SL's from the 15th to PM Support). That this failure occurred during the Opening time zone strengthened the case for traders once again exploring the upside.
Case against: The upside was already explored and price dropped fast. Adverse move was sharp, signalling likely failure of Reversal. I am going to wait and watch for how price acts at the Low.
Hey price bounced. Things are still adverse but case for up is now strong. Don't exit just to BE.
I think he was answering that same question about the second long in this post.
Similar situation in the ES open.
The down-move I had for the first 15min [Open was short] was extremely close to ending on Bar 4, only made continuation on 300 contracts volume.
By 9:51 EST we had confirmation of sentiment change.
Quote from dbphoenix:
Congratulations.
Thanks Db. If I could give you a brief state of the union. Until lately, the Forward testing did not have a stable base, as I was constantly testing and redesigning in the search for an integrated framework to make the decisions regarding participation, strategy, tactics and management.
I have now formed such a framework. Arraying my observations onto this framework has enabled me to operate with some control. More importantly, I can now tweak things around without worrying about undoing the entire structure.
Control has brought confidence and clarity. I am seeing behavior anew and it's exciting to know that this new vision will uncover further insights. There are times when I lose sensitivity to pressure. There are also certain environments that remain challenging. Ex:
1. Discontinuous trends - Sharp spikes followed by congestion followed by sharp spikes.
2. Slow congestion/channeling trends
Sure. The next short was a non-dominant leg taken around 10:01 EST, and I got it mine in at two ticks off the high of Bar 7, the last bar shown in the prior image.
What was happening at the time is that the momentum of the up-move was unsustainable, especially on the dropping levels of volume. A break of the "demand" line of the smallest fractal seen on the 5m chart was imminent, so reversal occurred in anticipation of that likelihood, and the DOM was referenced to reverse right as price approached a large block of limit orders that it could not pass.
I decided to post because I wanted to give you some positive reinforcement when I saw that your personal understanding of what was happening paralleled what I perceived to be technically happening quite well. Good work!
If my understanding is correct, you take positions in anticipation of the turn. So you are not trading the immediate momentum. And you are relying on various markers to signal Reversal. Volume seems to be quite important in your framework, being the independent variable that dictates price movement.
But even if volume influences price, does not price also dictate volume. What about low volume breaks/continuation moves that eventually become high volume cascades as traders rush in to join the move or capitulate out of it?