Making of a method
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Review:
Hesitation: I followed the LOLR for the most part without much hesitation.
Overtrading: None
Trade Management: Managing the first short based on the 50% guideline would have kept me in the trend. After that the use of swing highs would have let me ride a good part of the trend. While using the 50% rule will cut profits during times of Range action, it will more than make up for during trend days such as these. Besides, there was no confirmation of Range Support. My awareness of the PM hinge's apex at 35 got me to use the Rev wave off this level as an excuse to get out. But the Rev wave was just a technical rally and I could have waited for a retest to confirm that S existed at the apex.
Observations:
0837 The open had a lot of indecision within a narrow range. Then it broke to the upside. Once this upside thrust failed, all that pressure was likely to break down. The plan does not call for taking outright Reversals of main swings. However, in this case the context called for going short once the up thrust was brought down. I need to lay some guidelines down for conditions that warrant getting in straight Reversals.
http://www.sierrachart.com/image.php?l=1380812877263.png
Hesitation: I followed the LOLR for the most part without much hesitation.
Overtrading: None
Trade Management: Managing the first short based on the 50% guideline would have kept me in the trend. After that the use of swing highs would have let me ride a good part of the trend. While using the 50% rule will cut profits during times of Range action, it will more than make up for during trend days such as these. Besides, there was no confirmation of Range Support. My awareness of the PM hinge's apex at 35 got me to use the Rev wave off this level as an excuse to get out. But the Rev wave was just a technical rally and I could have waited for a retest to confirm that S existed at the apex.
Observations:
0837 The open had a lot of indecision within a narrow range. Then it broke to the upside. Once this upside thrust failed, all that pressure was likely to break down. The plan does not call for taking outright Reversals of main swings. However, in this case the context called for going short once the up thrust was brought down. I need to lay some guidelines down for conditions that warrant getting in straight Reversals.
http://www.sierrachart.com/image.php?l=1380812877263.png
Whatever guidelines you come up with regarding hinges may not apply to anything else. Price will regularly feint out one side before returning to the hinge and exiting out the other. Today's is a virtual template for that. If you're going to trade these, I suggest you come up with guidelines that are to be used only for hinges since the dynamic is different than that for ranges, trends, and breakouts.
As for the 50% "rule" cutting profits during ranging, that's what it's supposed to do, though perhaps that's what you meant.
This was a fairly wide hinge and I was looking at it more as a range during my prep. The smaller compression during PM is the one you alerted me about?
http://www.sierrachart.com/image.php?l=1380821532328.png