Making of a method
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It's still a work in progress. Ideally, my exits should be based on the nature of the risk taken. Is there high price or info risk? Is there potential for fast adverse movement? What is the opportunity cost? What are my expectations for the trade? Obviously, it's not possible to run a detailed analysis in the heat of the moment. So my challenge lies in developing a simple response to cover the above questions.
Take care, though, that you're not going through all this to protect yourself from the market. If it's just a matter of rapid-fire analysis, focus only on those elements that are absolutely essential. The various sorts of risk are not some of them.
Prior to entry, I have been asking myself: 'How much price risk is there in this trade'? The goal of this is to bring my awareness to recognize whether there is short term S/R close by, that may provide a buffer to allow me to stay in the trade during adverse movement.
The other challenge (something I encountered numerous times today), is the issue of interpreting the Demand/Supply balance once the trade moves favorably and comes back to entry.
All of this is contingent upon good entries of course.
There's also the matter of how much confirmation one requires, which is a function of how much he needs to be right. These are all personal issues.
Take, for example, the bounce off the apex of the hinge at 08.
I am assuming you would consider my long off the apex as a low price risk entry, given that I did not wait for confirmation through a new local high?
Price then moved according to expectations to 3714.25. It then retraced. This was expected given price's location at the apex of the previous hinge from the Open. The retracement came back to entry. There was a previous R level (now S), right below my entry. Given the larger LOLR and the presence of this S level, there was no need to exit just because I was at BE. The decision to exit arose from the thought: ' Price is Reversing on exit attempt from Hinge. These Reversals can be hard and fast, so get out. '
Technically, yes. But this is one of those things that can be tested within the context of the SLA. A hinge is after all another form of chop, and one doesn't want to be chewed up in chop. However, the hinge also offers a built-in launching pad. Sometimes these go and sometimes they don't. If one is interested in trading them at all, it's a simple matter to log 50 or so and determine whether or not there's anything in trading bounces off these apexes (or apices). If 80% of them are successful, that should help assuage whatever concerns there might be about "information risk". At the same time, one can determine at what point the bounce has failed, if it has done so, and the best level at which to scratch the trade. This addresses one's concerns about price risk.
I guess you are not much into SLA no more?