Market chop... buy the bottom of the range, sell top of range. Nothing other until range breaks.
- Thread starter Scataphagos
- Start date
What?
They let you out of the ES 2023 turd topic somehow.
The bone that everyone is picking on isn't about "why'd you do that for?", but why you keep feeding them HINDSIGHT ANALYSIS. Instead, they want you to show them what will happen going forward.
Charts are always crystal clear in hindsight and seemingly KISS.
Let's say price arrives at your level - be that a trend line or a horizontal support line. Do you buy or not?
Let's say you buy. It snaps down 10 points and you're stopped out.
Price then quickly reverses back up to your level around your initial entry point. Is this now a breakout test before reversing lower again? Or was the initial break a false breakout?
What the f*ck do you do?
It's not uncommon for the market (ES) to churn around a level stopping out both longs and shorts before finally resuming a direction.
Due to the volatile and periodically choppy action of the market it most certainly takes skill to navigate those gyrations successfully. If not, everyone would be rich simply buying support and resistance.
Let's say price arrives at your level - be that a trend line or a horizontal support line. Do you buy or not?
Let's say you buy. It snaps down 10 points and you're stopped out.
Price then quickly reverses back up to your level around your initial entry point. Is this now a breakout test before reversing lower again? Or was the initial break a false breakout?
What the f*ck do you do?
It's not uncommon for the market (ES) to churn around a level stopping out both longs and shorts before finally resuming a direction.
Due to the volatile and periodically choppy action of the market it most certainly takes skill to navigate those gyrations successfully. If not, everyone would be rich simply buying support and resistance.
You apparently don't get the point at all.
When I post support/recently plays like recently... the importance is NOT "here's a trade in hindsight", but rather "similar technical setup trades occur often and usually work out the same". So.. one can learn what they are and watch for when they occur again. I've recently shown examples of "matched low support" and "trendline support/resistance". I've shown them working just as they usually do. They work out the way shown often enough with a favorable R:R such that players SHOULD be taking those trades.
BTW... NOBODY knows "what's going to happen going forward*" in any but the smallest sense.
*Interestingly... Price TA is one approach that shows "what's going to happen going forward"... that is, "after ____(setup), usually comes _____ (up or down)"... at least for a bit. Successful setups show the START of something, which apparently isn't enough for most traders... but unfortunately that's the best you're going to get.
Last edited:
Charts are always crystal clear in hindsight and seemingly KISS.
Let's say price arrives at your level - be that a trend line or a horizontal support line. Do you buy or not?
Let's say you buy. It snaps down 10 points and you're stopped out.
Price then quickly reverses back up to your level around your initial entry point. Is this now a breakout test before reversing lower again? Or was the initial break a false breakout?
What the f*ck do you do?
It's not uncommon for the market (ES) to churn around a level stopping out both longs and shorts before finally resuming a direction.
Due to the volatile and periodically choppy action of the market it most certainly takes skill to navigate those gyrations successfully. If not, everyone would be rich simply buying support and resistance.
You've brought up this "false breakout" notion before in my posts... seems like you're obsessed about it. Not understanding how it REALLY is... is holding you back.
What you have described happens sometimes.. not what happens most often.
And yes, "everyone would be rich simply buying support and selling resistance"... with proper stop management, of course.
You can't do anything about "tricks and traps". You just have to cope.... and they don't occur all that often, comparatively.
False breakouts are very common with US index futures - particularly ES. You should know if you're trading it actively in present day. I imagine this is partially due to the high degree of competition and multiple strategies being exploited by the various players across multiple timeframes on this heavily traded instruments.
False breakouts usually fuel powerful counter-moves. I imagine this is because many short term traders got trapped selling into a low or buying into a top and have to liquidate - in addition to the new traders entering in the same direction.
Was it different a decade or two ago? Maybe and I would guess so. I'd invite more experienced traders to answer that. I did my first trades in ES over a decade ago and my impression is that it's changed even during this period with false breakouts being more frequent. Levels would more cleanly break in the past. Particularly to the short side.
I listened to an interview with Marty Schwartz and won't quote him as I don't remember exactly, but I'm pretty sure he said that the strategies he employed back in the day no longer worked for day trading ES and he had moved on to mostly trading options and gold.
You don't realize it, but you're arguing against your belief. False breakouts are usually good signals. That is, false breakdown and recovery = good buy indication. False upside breakout and recovery = good sell indication. (I understand you don't like the hassle of the "false" part... nobody does.) Regardless of "sloppiness" around them, support and resistance are still THE most important action points.
Not at all. False breakouts are one of my favorite entries.
I'm just saying that your KISS methodology isn't necessarily KISS as it takes skill and experience to be able to discern when S/R holds and not. Rest assured, many players are stopped out multiple times before a reversal or a continuation is materialized.
I'm not saying there's no validity in what you're proposing. I'm just saying there's a bit more to it than you suggest.