A scrapbook of trading stuff of interest to me.
Breakout Study #1
Breakout Study #1
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Scribbles & Bits
- Thread starter fortydraws
- Start date
A scrapbook for trading stuff of interest to me.
Breakout Study #2
Breakout Study #2
A scrapbook for trading stuff of interest to me.
Breakout Study #3
Breakout Study #3
A scrapbook for trading stuff of interest to me.
Breakout Study #4
Breakout Study #4
A scrapbook for trading stuff of interest to me.
Breakout Study - Final
This post ties together the material in posts #20 - #24 inclusive of this journal.
I wanted to save each of these breakouts in this manner for two reasons: First, I wanted to record each one as the chart would have looked in real time to show that if one had identified the range, then one would easily have recognized the four tests of the range limits. Second, I wanted to make it easy to compare how price behaved after each test, to more readily see the difference in Breakout Study #4 - a bona fide BO trade opportunity, imo, from how price behaved in the prior three BO studies, each of which was a simple test and range reversal as I define them.
Breakout Study - Final
This post ties together the material in posts #20 - #24 inclusive of this journal.
I wanted to save each of these breakouts in this manner for two reasons: First, I wanted to record each one as the chart would have looked in real time to show that if one had identified the range, then one would easily have recognized the four tests of the range limits. Second, I wanted to make it easy to compare how price behaved after each test, to more readily see the difference in Breakout Study #4 - a bona fide BO trade opportunity, imo, from how price behaved in the prior three BO studies, each of which was a simple test and range reversal as I define them.
Last edited:
A scrap book for trading stuff of interest to me.
From a price action primer that can be found and downloaded for free at this link:
http://www.traderslaboratory.com/fo...yckoff-law-supply-demand-auction-markets.html
I have wondered if it would not be easier for someone new to learning to trade by price to consider that only two strategies: Breakouts and Reversals, and to consider Retracements not as a separate strategy so much as possible tactic one might choose for trading either. for trading either.
My understanding is that a breakout is any instance in which price has exceeded the limit of a trading range by the minimum trading increment for that market, i.e. a tick. One might choose to trade breakouts by placing a buy or sell stop at a pre-determined price level outside the trading range, with the minimum being one tick. That is one way to trade breakouts. Another is to wait for the breakout, and then wait for price to retrace, i.e. pullback toward the prior trading range, and then enter the trade when price indicates that it is resuming in the direction of the breakout.
Similarly, for reversals, one could simply buy using a limit order at or near one of the extremes of the range, or one could enter after price appears to have tested the limit and held, or, assuming a large enough range, one might wait for price to retrace in the direction of the test, and then enter the trade when price indicates the reversal from that test is resuming.
These considerations, as I understand them, are part of a price action trader's trading plan, and the particular strategies and tactics employed will depend upon the individual trader's "trading personality" and the market selected for trading. A straight breakout strategy in the NQ, for example, will have a lot of small losses, but the trader will be guaranteed not to miss The Big Ones. Trading a breakout strategy but entering on reversals will have a much higher winning percentage, but the profits will be smaller, and there is the risk of sometimes missing The Big One completely.
Asking "which is best?" does not yield a "one size fits all" answer, imo. Each person must ask and answer for him or herself which strategy and what tactics will allow that person not only to develop a consistently profitable trading plan, but will also enable the trader to follow that plan. If a lot of small losses bothers a particular individual, then trading a straight BO strategy is probably not the way to go. If one is afraid to put on a long trade after a price decline, or afraid to put on a short trade after a rally, then a trading plan based on a reversal strategy will likely lead to failure.
In any case, this definition of terms goes with Breakout Study posts starting at #20 of this journal, and now including all posts up to (and including) this one.
From a price action primer that can be found and downloaded for free at this link:
http://www.traderslaboratory.com/fo...yckoff-law-supply-demand-auction-markets.html
I have wondered if it would not be easier for someone new to learning to trade by price to consider that only two strategies: Breakouts and Reversals, and to consider Retracements not as a separate strategy so much as possible tactic one might choose for trading either. for trading either.
My understanding is that a breakout is any instance in which price has exceeded the limit of a trading range by the minimum trading increment for that market, i.e. a tick. One might choose to trade breakouts by placing a buy or sell stop at a pre-determined price level outside the trading range, with the minimum being one tick. That is one way to trade breakouts. Another is to wait for the breakout, and then wait for price to retrace, i.e. pullback toward the prior trading range, and then enter the trade when price indicates that it is resuming in the direction of the breakout.
Similarly, for reversals, one could simply buy using a limit order at or near one of the extremes of the range, or one could enter after price appears to have tested the limit and held, or, assuming a large enough range, one might wait for price to retrace in the direction of the test, and then enter the trade when price indicates the reversal from that test is resuming.
These considerations, as I understand them, are part of a price action trader's trading plan, and the particular strategies and tactics employed will depend upon the individual trader's "trading personality" and the market selected for trading. A straight breakout strategy in the NQ, for example, will have a lot of small losses, but the trader will be guaranteed not to miss The Big Ones. Trading a breakout strategy but entering on reversals will have a much higher winning percentage, but the profits will be smaller, and there is the risk of sometimes missing The Big One completely.
Asking "which is best?" does not yield a "one size fits all" answer, imo. Each person must ask and answer for him or herself which strategy and what tactics will allow that person not only to develop a consistently profitable trading plan, but will also enable the trader to follow that plan. If a lot of small losses bothers a particular individual, then trading a straight BO strategy is probably not the way to go. If one is afraid to put on a long trade after a price decline, or afraid to put on a short trade after a rally, then a trading plan based on a reversal strategy will likely lead to failure.
In any case, this definition of terms goes with Breakout Study posts starting at #20 of this journal, and now including all posts up to (and including) this one.
I don't know if you were long around 70 today. I was and if you were did you contemplate reversing the position around 80ish at 9:38? I'm working on SAR criteria but it's a bit tricky. Any thoughts on that? My shorts were under 62.75. I figured I would ask this here instead of the other thread where you posted your charts.
A scrap book for trading stuff of interest to me
"In fact every single one of them have a time stop utilized way more than a dollar stop."
"Their time frames utilize the entire session of the day most of the time."
"But they are definitely not in/out click-n-go guys"
"In fact every single one of them have a time stop utilized way more than a dollar stop."
"Their time frames utilize the entire session of the day most of the time."
"But they are definitely not in/out click-n-go guys"