Well, I don't trade hyper-leveraged instruments & I don't trade penny stocks either. I know where is my SL but I got caught like 2 times early on by my trailing stop loss. I like 2X Commodities ETFs alot, I also like hot sectors like marijuana atm.
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- Thread starter leflos
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Well, I don't trade hyper-leveraged instruments & I don't trade penny stocks either. I know where is my SL but I got caught like 2 times early on by my trailing stop loss. I like 2X Commodities ETFs alot, I also like hot sectors like marijuana atm.
Here is a mickey mouse daytrade taken a few minutes ago in ES. Long 1 contract at 2670.75. Averaged down long 1 contract at 2669.75. Out both at 2672.25. Made 1.5 points on first entry and 2.5 pts on second average down entry. Profit 200.00. In a tight range market.
Here is an explanation and graphic of the context. Compare the first chart with second chartto see entries and exits as described.
So, we have on the 10th bar after the open (the big 60 second bar LOL) a wedge top starting. Three pushes up and we have a wedge top. However, the wedge top FAILS (i.e. no reversal at this point) and the drive up continues for a second wedge top (i.e. 3 more pushes up) in this TIGHT BULL channel. On this second wedge top will it continue with a third one or will there be some sort of reversal (even if minor). At minimum will see see some sideways action? Very likely. As the second wedge top (larger bull bar in start of the grey box) was followed by a bear bar then a bull inside bar then a doji (not good for the bulls) then a bear..followed by a dojo (not good for the bears). So, we have confusion. We have disappointment. We have neither side winning. This is TR behaviour. So, I draw the grey box marking the range starting from near the bottom of that larger bull bar as its price action will probably end up being in any range drawn.
So, now the tactic is to trade a tight range (in the form of a bull flag) using limit order entries and exits. The basic idea is that as they range expands to the right is to go long in the bottom 1/3 of the range and average in on any adverse moves up even slighly through the bottom of the range. Just keep adding. One contract at a time. First time after 1 point adverse move. Second time 1.5 ADDITIONAL adverse move...third time 2 point ADDITIONAL ADVERSE move. Why? The odds favor price will go back up at least for a scalp profit because of all that bullish behavior since the open AND price is at 20 EMA ..small range bars...etc. Chances are we will l see at least a pop up before any down price action. The concept is to take ANY profit back up to the middle area of the range. Just get out! There has to be a really good reason to hold on for more profit. Why? We are in a tight bull flag range.
This is the way I like to trade tight ranges. Don’t be fooled by big pushes up. They will most likely stop dead in their tracks at the top zone of the range and reverse back down. So if price does go up after I exit my long in the middle I just wait to inniate a second entry (but short) near the top and average in on adverse moves from the short side too.
In this case, I exited both contracts then price drops from middle and goes back down some more.
So, now what? I would be right back to averaging down with longs again (except I can’t because of typing up this beautiful explanation with one finger and it takes time..ROFLMAO) as price returns back down from the middle of the range to the bottom of the range then i would exit on any pop back up towards the middle of the range. Why? Odds favor doing this. As range gets wider I redraw it but trade using same concepts whether it gets wider on bottom end or top end. Then when we get a definite BO from any range with good FT I am gonna go the way of the BO and I trade BO’s different than ranges.
See I don’t need charts with piles of indicators to look at to trade PA. Gets too confusing.
Bye
Here is an explanation and graphic of the context. Compare the first chart with second chartto see entries and exits as described.
So, we have on the 10th bar after the open (the big 60 second bar LOL) a wedge top starting. Three pushes up and we have a wedge top. However, the wedge top FAILS (i.e. no reversal at this point) and the drive up continues for a second wedge top (i.e. 3 more pushes up) in this TIGHT BULL channel. On this second wedge top will it continue with a third one or will there be some sort of reversal (even if minor). At minimum will see see some sideways action? Very likely. As the second wedge top (larger bull bar in start of the grey box) was followed by a bear bar then a bull inside bar then a doji (not good for the bulls) then a bear..followed by a dojo (not good for the bears). So, we have confusion. We have disappointment. We have neither side winning. This is TR behaviour. So, I draw the grey box marking the range starting from near the bottom of that larger bull bar as its price action will probably end up being in any range drawn.
So, now the tactic is to trade a tight range (in the form of a bull flag) using limit order entries and exits. The basic idea is that as they range expands to the right is to go long in the bottom 1/3 of the range and average in on any adverse moves up even slighly through the bottom of the range. Just keep adding. One contract at a time. First time after 1 point adverse move. Second time 1.5 ADDITIONAL adverse move...third time 2 point ADDITIONAL ADVERSE move. Why? The odds favor price will go back up at least for a scalp profit because of all that bullish behavior since the open AND price is at 20 EMA ..small range bars...etc. Chances are we will l see at least a pop up before any down price action. The concept is to take ANY profit back up to the middle area of the range. Just get out! There has to be a really good reason to hold on for more profit. Why? We are in a tight bull flag range.
This is the way I like to trade tight ranges. Don’t be fooled by big pushes up. They will most likely stop dead in their tracks at the top zone of the range and reverse back down. So if price does go up after I exit my long in the middle I just wait to inniate a second entry (but short) near the top and average in on adverse moves from the short side too.
In this case, I exited both contracts then price drops from middle and goes back down some more.
So, now what? I would be right back to averaging down with longs again (except I can’t because of typing up this beautiful explanation with one finger and it takes time..ROFLMAO) as price returns back down from the middle of the range to the bottom of the range then i would exit on any pop back up towards the middle of the range. Why? Odds favor doing this. As range gets wider I redraw it but trade using same concepts whether it gets wider on bottom end or top end. Then when we get a definite BO from any range with good FT I am gonna go the way of the BO and I trade BO’s different than ranges.
See I don’t need charts with piles of indicators to look at to trade PA. Gets too confusing.
Bye
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Thanks for the response man! That's exactly what i'm looking for. You obviously have more expertise in TA than I do. To me, with a gapper like that, I would've been interested around 9:15 if bear volume was very low previously. Personally, I don't really like tight ranges bc I feel like you have to be more experimented to be able to recognize what's going on especially on short time frames like that.
And a third beautiful example. As range gets wider more opportunities for range trading using the concept of averaging down, which is a No..no..in trading world advice from the pundit educators. That is, IT is looked upon as a breaking of the cardinal rules established by the “elites” (not these elites here on ET..well ..not all of them anyway....LOL). Every wonder why they teach such things?
Anyway, one word or sentence or paragraph of warning. THE CONTEXT MUST BE RIGHT FOR ALL THIS AVERAGING DOWN GARBAGE (such language is used to keep the naysayers happy roflmao) THE CONTEXT TO THE LEFT SAY STRONG BULL FROM THE OPEN BUT SLOWLY GETTING WEAKER..SLOWLY..SLOWLY.
Bottom line LARGER CONTEXT...BEHAVIOUR... slow or fast...BIG RANGE SMALL RANGE...BIG BARS...SMALL BARS..BEAR/BULL PRESSURES...etc...etc..
PS Averaging down not to be attempted in all circumstances...warning.
BYE.....FOR THE THIRD TIME....
Anyway, one word or sentence or paragraph of warning. THE CONTEXT MUST BE RIGHT FOR ALL THIS AVERAGING DOWN GARBAGE (such language is used to keep the naysayers happy roflmao) THE CONTEXT TO THE LEFT SAY STRONG BULL FROM THE OPEN BUT SLOWLY GETTING WEAKER..SLOWLY..SLOWLY.
Bottom line LARGER CONTEXT...BEHAVIOUR... slow or fast...BIG RANGE SMALL RANGE...BIG BARS...SMALL BARS..BEAR/BULL PRESSURES...etc...etc..
PS Averaging down not to be attempted in all circumstances...warning.
BYE.....FOR THE THIRD TIME....
Bullish channel all night then gap up on the open followed by a little drop with several overlapping bars indicating TR you gotta look at going long for that ride up when you see the BO on that big 9:19 bar after the PB following that big bar. Entry was the second higher high after after that big bar pb. I mean channeling up all night followed by gap up on the open..fairly large...several point (around 9pts at bar 9:19) BO...well time to go long after any pb. So, go long on the close of big BO bar or wait for a second entry or a third entry ....but get long. Buying pressure is there..all the signs....
My previous charts were just to show how to trade tight sideways action after a big BO.