Quote from NoDoji:
PO, there are many days when the major trend is one way, but it's a trending range that you can enter both ways or the day provides a decent pivot at some point.
Today was a day where the stock index futures displayed almost no long invitations (I watch ES and assume the others may have been similar). At 10:40am ET, price broke through previous resistance and left a higher low behind. Not the highest probability trade, but aggressive bottom pickers might've jumped in and ended up with a scratch trade or a small scalp. Then at 1:30pm price broke through previous resistance AND closed for the first time above the 20-bar moving average on the 5-min chart. If strength followed that bar, you could consider it a possible trend reversal. However, the breakout failed right away and that was another short entry signal.
It can be difficult to join a strong trend, like the one that was in progress from pre-market through the half hour off the open. You may feel that price has gone too far and will reverse at any moment, trapping you. You look for long entries against a down trend because surely price has to reverse! So how do you join a strong trend that just isn't pulling back nicely?
I found a method that often works well: Enter via a buy stop or sell stop placed above/below a previous bar's high or low. For example, today's ES opening 5-min bar closes with a low of 1083.25 in a very clear pre-market downtrend, so place a sell stop @ at 1083.00 with your protective stop above the opening bar's high of 1086.50. Trailing a stop above each closed bar's high now keeps you in the trade until 1074.00.
