Lol
Reversal Shorts - Top in
- Thread starter jazzsmn
- Start date
Well. I used to do such counter trend trading aka Kamikazae Trading.
When price hit the resistance line, I shorted the market immediately
without waiting for confirmation pattern.
Success rate : zero.
Those were the days.
There is very big difference between taking reversal down signal and doing
counter trend trading.
One is you can reach financial freedom soon.
The other is your accounts will be blown away again and again.
When price hit the resistance line, I shorted the market immediately
without waiting for confirmation pattern.
Success rate : zero.
Those were the days.
There is very big difference between taking reversal down signal and doing
counter trend trading.
One is you can reach financial freedom soon.
The other is your accounts will be blown away again and again.
Also shorted Crude Oil today. .... Short 63.52 stop 66.17 & closed Longs Friday. ..... here
https://www.elitetrader.com/et/threads/crude-oil.326772/
https://www.elitetrader.com/et/threads/crude-oil.326772/
If your success rate for shorting into resistance was zero, then this should mean you could always buy at resistance and you would be profitable 100% of the time, no?
Of course you need to come up with some metrics regarding where your stop and target is to consider this a successful trade, and when you do this, I doubt you will have even a 30% loss rate (given something like a 1:1 trade). The fact is that often, there is an initial reaction at said resistance. Hardly does it ever blow through on the first try. (we of course also would need to discuss how you are defining your resistance levels)
If you wait for a confirmation pattern, now your stop is going to have to be much bigger since you're waiting to see some down action and then get in. You might now win more of these trades, but you also lose more on the times it doesn't work since your stop naturally had to be bigger.
Your blanket statement of saying shorting at resistance never works makes me wonder if you are actually trading.
no problem mister. trade whatever way you want.
Well me thinks not. Although it (ES) is at weekly high from oct 2018 the reversal up in dec 2018 and the subsequent channel is just too tight and bullish. I think it will break right through resistance of oct 2018.
Weekly
And if you go to a continuation monthly chart the reversal is 4 strong bull bars in sequence coming from the bottom area of an expanding triangle pattern with gaps between closing prices AND price at the present moment has not reached the top of the expanding triangle. No sir...this will most likely sail right through oct 2018 high..rocket through 3000 and keep going on up towards top of the expanding triangle. Of course, the market can do anything but this is my take on it and I’d say it has a 65% probability of working out this way and a 35% probability that the BO of Oct 2018 will fail and price will reverse back down.
To define a successful BO you need a bull BO bar followed by a preferably a good bull follow-thru bar that has a low above the BO point and closes preferably in the upper half of it’s range.
If BO fails and a reversal does take place then the least likely will have happened and when the least likely happens look for multiple legs down and a measured move or even multiple MM’s down.
Nevertheless, on BOTH weekly and monthly charts there is selling pressure too indicated by price trading on down through EMA a good ways so bears too are active and at the moment it could just be a test of oct “18” high but I still say odds favor bulls as general context too speaks of bulls being stronger than bears. So, STILL I say 65/35.
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First chart is monthly. Second is weekly. Yellow indicates how far below Ema it traded on both charts. Green highlight on weekly indicates the tight bull channel. Only three bear bars in that tight channel. So, on both charts we see a bull trend line break that goes far enough below the EMA that tells us bears can be strong when they exert themselves. At the moment we are testing the previous high. So it is a valid setup for a major trend reversal. However, all this is taking place in an expanding triangle and the top of the triangle has yet to be reached on either chart. In addition, the general context is bullish (note all the bars to the left). Because of these latter two things I assign a probability of 65% price will breakthrough the oct 2018 high and go on up. Nevertheless, I am cognizant that a major trend reversal setup is now present. However, I just think the bulls are stronger. So, I assign only a 35% chance that a major reversal will take place. But I would need to see double or triple tops..some sideways action...possible failed BO action and a good signal and entry bar to short this.
Such is the nature of trading. In either senario I want to see signal bars and entry bars in those TF’s before I would take a position, long or short. Now if we go to a 5 min chart I would be trading setups many times more while waiting on weekly and monthly setups to appear.
Such is the nature of trading. In either senario I want to see signal bars and entry bars in those TF’s before I would take a position, long or short. Now if we go to a 5 min chart I would be trading setups many times more while waiting on weekly and monthly setups to appear.
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