Making of a method

Db, I may have missed it somewhere in the posts, but is there any additional filter besides breaking of SL for arriving at a conjecture that a Reversal may have happened. Whatever I have read from books generally speak about expecting continuation and not reversals and you speak about the same thing as long as the SL is not broken. But these lines keep breaking and then prices continue in the same direction or go nowhere in particular. But they do not reverse in the opposite direction and I get stopped out.

Am I looking at Demand/Supply lines wrongly. My guess is I am being too mechanical.

Am trying to attach a chart with 3 buys that get stopped out.

Thanks.
 

Attachments

Quote from yossy:

Db, I may have missed it somewhere in the posts, but is there any additional filter besides breaking of SL for arriving at a conjecture that a Reversal may have happened. Whatever I have read from books generally speak about expecting continuation and not reversals and you speak about the same thing as long as the SL is not broken. But these lines keep breaking and then prices continue in the same direction or go nowhere in particular. But they do not reverse in the opposite direction and I get stopped out.

Am I looking at Demand/Supply lines wrongly. My guess is I am being too mechanical.

Am trying to attach a chart with 3 buys that get stopped out.

Thanks.
More...

Without knowing the context or how the instrument trades, all I can provide are generalities.

Unless price is hitting major support or major resistance, as in a trading range, then the probability of a continuation has a slight edge. But that doesn't really matter in terms of real-time trading. You have to play the hand that's been dealt to you, and all you know at the time one of these lines is broken is that there has been a change in the dynamic between buyers and sellers. Buyers may reverse the trend or they may only retard it. Or they may fail entirely and sellers may again take control. Again, none is that is knowable, so you trade what's in front of you.

If the supply line is broken, sellers are no longer in control, at least for the moment. You trade as though buyers are re-asserting themselves. However, if price can't make a higher swing high after your entry, then you have to be prepared to exit and take the other side. In your example, you've left the field after only half the play. If price fails then to make a lower swing low as well, then price is going nowhere, i.e., balancing, and you have to wait until one side or the other shows its hand. The short op in the middle of the chart (you didn't take either side here) was a good one, as would have been a short after the subsequent failure of your long. The first and last trades would not have been worth as much regardless, but that's the way it goes.
 
Quote from game:

http://www.sierrachart.com/image.php?l=1369340396566.png
More...

If you enter before the setup is complete, then you risk being stopped out. But you also risk being stopped out if you wait too long. Here, for example, you have multiple tests of 3025 at the open and price lifts from there suggesting strength. The first RET begins at 0842 and the entry is at 0846, and that's the last trade you need to make until you exit some time after 0923.
 
http://www.sierrachart.com/image.php?l=1369420473674.png


It can be easy to get discouraged looking at my entry and exit performance. I am making a lot of mistakes here.

But I need to remind myself of the positives. On most days I manage to stay on the right side of the trend. Not trading counter trend is a big step. Not trading in chop is a big step.

So far, I have found uptrend days to be difficult. This is probably because I find it easier to enter shorts than longs. This bias causes me to be tentative on long set ups and I miss the entry that would have positioned me for the ride up the trend.
 
You must log in or register to reply here.
Back
Top