Trade #6 was getting caught in a BO of the range after an initial entry and adding 3 times to it then exiting with a loss, followed by immediately doubling up and reversing direction. If I remember correctly i didn’t quite double up the position size, but almost. The point is I made back my loss in a small move (because my position size relative to the previous losing position size was nearly double). Let it run some more on trade #7 before exiting the larger size to go to town and run some errands. Again in accordance with the rules and guidelines in post #1149.
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
Trade # 6 Additional comments. You got a BO then an additional 5 bars all with closes outside the range. This indicates a successful BO. Plus you got gaps between to BO point and bars 3,4,5, 6 (although bar 6 isn't labeled). Price held and did not trade back into the range within 5 bars. Time to exit this averaged down losing position double up on position size and reverse recuperating the loss and maybe making some profit. Yes it takes decisiveness and guts but the goal is to recuperate the loss in about 1/2 of the movement it took to make the loss. So by labeled bar # 5 I know this is likely a successful BO per guidelines in my post #1149 above and we will likely see another leg up. The PB on bar 5 held above the BO point. The next bar is a good size bull bar. Dump the losing position. Double up!
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Once I have exited the losing position followed by nearly doubling up and reversing in about 1/2 distance price traveled to create the losing position I have recouped my losses and back in the money with profit between top blue line and red line, my exit point on the nearly doubled up position. The red lines on the left measure the distance to creat the loss.The blue line superimposed or drawn in between these red line measure the aprox distance price had to travel with a nearly doubled up position to recoup the loss. This is how I like to handle a loss incurred while averaging down after a successful BO BO caught me in an average down position while fading BO of a range. It is imperative to simply do what I have to do to recoup my loss and perhaps get back in the money quickly. This is scalping. I have to play it in such away that the mathematical odds favor me. See if a BO of a range is successful like this one is and I got caught in it then I know it will likely have at least one more leg up. It thus behooves to exit then double up and reverse and get back my loss on part of that second leg and make money on the latter part of that second leg.
When scalping ranges or chop by fading the outer limits I must be cognizant of what to do when things go wrong simply because when fading BO attempts sooner or later one BO will be successful and I need to know what to do should I be caught in such a situation with a position on.
Much of the time (probably clise to 70%) market track sideways as opposed to trending so it behooves me to develop, or have some tactics for trading what others call noise or chop. Or I will miss out on a lot of trading opportunities.
When scalping ranges or chop by fading the outer limits I must be cognizant of what to do when things go wrong simply because when fading BO attempts sooner or later one BO will be successful and I need to know what to do should I be caught in such a situation with a position on.
Much of the time (probably clise to 70%) market track sideways as opposed to trending so it behooves me to develop, or have some tactics for trading what others call noise or chop. Or I will miss out on a lot of trading opportunities.
Your welcome.
No those are entries 1 and 2 on trade #6. I started shorting on that bar in the top 1/4 of the range (fading the BO) and continued adding until i saw the BO was gonna be a successful one and not just a failed attempt. So I had to dump the losing position 6 bars after the initial 2 entries bar then go long on trade #7 with a larger position than the previous losing position.
I am showing the same chart for all the trades just basically marking up one or two trades each time and giving some concepts showing how I traded these trades and correlating those actions with the rules and guidelines in my post #1149 that deal with 2 tactics for trading ranges, namely;
1) fading the outer limits
2) what to do when I happen to get caught on the wrong side of the market (i.e. a BO is successful) while fading the BO.
There are other tactics I use with trading ranges but here are two foundational ones if one is gonna scalp “chop” for 1 to 8 points in the ES.
PS. I don’t believe in random noise in the market. If price moves any at all it is because an institution generated that move. Other institutions will counter it. In ranges with chop both side are exerting pressures. That is exactly what creates the range. They are about even until one side wins and manages to create a successful BO. Both sides are attempting BO’s. That is why 80% of BO attempts fail and price goes back into the range. One side attempts. The other pushes back. Eventually one side gives up and we get a BO, usually followed by a channel then that channel followed by another range or in other words, an area of equilibrium. Most call that chop or noise and avoid trading it. I call it an ATM MACHINE LOL.
1) fading the outer limits
2) what to do when I happen to get caught on the wrong side of the market (i.e. a BO is successful) while fading the BO.
There are other tactics I use with trading ranges but here are two foundational ones if one is gonna scalp “chop” for 1 to 8 points in the ES.
PS. I don’t believe in random noise in the market. If price moves any at all it is because an institution generated that move. Other institutions will counter it. In ranges with chop both side are exerting pressures. That is exactly what creates the range. They are about even until one side wins and manages to create a successful BO. Both sides are attempting BO’s. That is why 80% of BO attempts fail and price goes back into the range. One side attempts. The other pushes back. Eventually one side gives up and we get a BO, usually followed by a channel then that channel followed by another range or in other words, an area of equilibrium. Most call that chop or noise and avoid trading it. I call it an ATM MACHINE LOL.
LOL hope it was the gorilla brand of duck tape. Cessna 170 tail dragger I suppose.