Stops and Risk Control - ES

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Price put in a micro double top on the 5 minute ES this morning and then corrected into a retrace zone triggering a short. Any subsequent bear bar close could have been shorted but the next zone pullback entry occurred after another corrective leg. Both of the zone trades were better entries and the stop would have gone over the swing entry. There were any number of ways to set targets on the trades. No one has the exact trade plan but everyone needs to fully understand what is or is not a valid entry/setup and trade management rules.
 
speedo said:
While shorting closes in a strong down trend is valid, it's deep into the move by that point. I would wait for a pullback if not already short by that point. The black dot would be the most conservative stop but IMO too generous given your proposed entry. And yes price is dynamic and context is always subject to change. As an example, say on a pullback entry. you could place the stop over/under the entry swing and keep it there or you could go flat if the close of the entry bar did not close in the direction of the trade.....depends on one's trade plan. Any trade can fail and there is no perfection in trade management. The best any of us have is an edge and the discipline to protect it.
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Hello speedo,

Thank you so much for the explanation you stated. I agree sir with everything you stated.

Being dynamic with entry and stop and correlating that with price structure and price action is our Edge. In addition, our edge is ton of screen time and observation.

Thank you
 
speedo said:
Price put in a micro double top on the 5 minute ES this morning and then corrected into a retrace zone triggering a short. Any subsequent bear bar close could have been shorted but the next zone pullback entry occurred after another corrective leg. Both of the zone trades were better entries and the stop would have gone over the swing entry. There were any number of ways to set targets on the trades. No one has the exact trade plan but everyone needs to fully understand what is or is not a valid entry/setup and trade management rules.
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Perfectly stated speedo. I argee.
 
David's faith said:
Which candles are you referring to as to be a double top? The first two right at the open or the next ones after?
I never looked at micro duble tops before.
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The first two bars of the RTH open. It looks more like a conventional double top if you dial down the time frame. Similarly an inside bar in a trend can be viewed as an "inferred" flag as it can be seen as a conventional pullback flag on a lower TF. You can learn to see these things without having to use multiple time frames.

Developing (day) traders would be well advised to spend many hours observing price development before they form their trade plan and risk money. Better than memorizing "patterns" from a text book or seminar/webinar is understanding how price is behaving as it develops through time and without emotional attachment to the outcome. "Patterns" will become obvious but you have to understand the context in which setups occur.
 
easymon1 said:
Where were your exits, and which candles did you enter during?
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See my chart posted above, Bar number 6 was a signal bar in the retrace zone of the opening range, the takeout of the low of that bear bar was the short. Bar #5 tested the open, bar #6 probed that level and failed. The close below the open print was bearish in itself as it is an important pivot.
 
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speedo said:
See my chart posted above, Bar number 6 was a signal bar in the retrace zone of the opening range, the takeout of the low of that bear bar was the short. Bar #5 tested the open, bar #6 probed that level and failed. The close below the open print was bearish in itself as it is an important pivot.
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Nice. Any exit?
 
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