I think it's worth noting that support/resistance shouldn't be seen in isolation. First, draw a trendline and see if the two converge. Second, price level alone doesn't mean anything. What's the big deal about ES trading near the previous support or resistance level? What should really matter in my opinion is how and how fast it got there. There is an important difference when ES is meandering near its previous support for the last 30 minutes and when ES is testing its previous resistance after shooting up more than 10 points within the last 10 minutes. All three components can be neatly summed in what I call "payment" or P.M.T (short for price, momentum, and time). Just my 2-cents.
The Price Action Journal
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Hah hah funny I also entered a short entry at that first short you did on this chart. I almost got stopped out though missing it by a tick. I also entered a short at about the same time you made your second short trade. I think we might have a similar entry rule. That last long trade you made was also a qualifying long entry for me which I didn't took because I have a short bias of the market, it's because of the TICK as being bearish all day. I was afraid It might just be a fakeout spike then they might kick it lower. Overall I made 2 trades 2 wins today. But for me I think we should keep our entries to ourselves because if more people trades the same way we do it might not work anymore. lol up to you though just a thought. But good job on those trades last Friday.
A Tidbit: (Nothing on tv this morning, well aside from some vacume cleaner ads and different ways to make a fortune))
In a different post i mentioned "DO NOT diddle in the Middle", i thought i would explain where that came from. In a nutshell it came from chasing a breakout that i missed. Keyword = chasing.
How many times have you witnessed a breakout ( i am a breakout trader in general in ES 5 min chart during pit hours only) and after the breakout you decided it was going to "RUN" so you throw in a mkt order and get filled and now on board?
You get a few ticks to the good and price starts to lose momentum. What to do? In days gone by i did this as a fault in trading because chasing a breakout means you missed the first couple handles (or few ticks even if the breakout is false, trading false breakouts is another tactic completly so i will pass on that in this hit) because the trade was not pre-planned properly. I might not have been focused enough or flat misjudged the breakout level. A "news" breakout these days is not really even going to be a surprise because the levels are plainly known and watched. Should be anyway,
Ok, you are filled, price starts to slow and the STOP LOSS is in the mkt. Here is where the trouble start.............price starts to retrace and it hits your STOP LOSS. RATS!!!! You are taken out on a NORMAL retrace of a leg because you entered at the wrong time, you set yourself up for a loss.
Chasing is a rookie mistake. Sure sometimes like anything else in a game of probabilities chasing will work. Chasing is a defect in pre-planning the initial breakout.
smilingsynic posted this: I do keep a journal of my ES trades that I write AFTER market hours based on observations made DURING market hours. However, I will not post that material online, as it is too valuable to give it away for free.
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Hoggie wonders what price you think it is worth. HA To be perfectly honest i feel it is a false security blanket to think one has "secrets", would it not be less of an ego trip just to say "i know what works for me " I mean we all know there are no SECRETS in trading, NONE. Better to share because that will enhance your trades.
In a different post i mentioned "DO NOT diddle in the Middle", i thought i would explain where that came from. In a nutshell it came from chasing a breakout that i missed. Keyword = chasing.
How many times have you witnessed a breakout ( i am a breakout trader in general in ES 5 min chart during pit hours only) and after the breakout you decided it was going to "RUN" so you throw in a mkt order and get filled and now on board?
You get a few ticks to the good and price starts to lose momentum. What to do? In days gone by i did this as a fault in trading because chasing a breakout means you missed the first couple handles (or few ticks even if the breakout is false, trading false breakouts is another tactic completly so i will pass on that in this hit) because the trade was not pre-planned properly. I might not have been focused enough or flat misjudged the breakout level. A "news" breakout these days is not really even going to be a surprise because the levels are plainly known and watched. Should be anyway,
Ok, you are filled, price starts to slow and the STOP LOSS is in the mkt. Here is where the trouble start.............price starts to retrace and it hits your STOP LOSS. RATS!!!! You are taken out on a NORMAL retrace of a leg because you entered at the wrong time, you set yourself up for a loss.
Chasing is a rookie mistake. Sure sometimes like anything else in a game of probabilities chasing will work. Chasing is a defect in pre-planning the initial breakout.
smilingsynic posted this: I do keep a journal of my ES trades that I write AFTER market hours based on observations made DURING market hours. However, I will not post that material online, as it is too valuable to give it away for free.
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Hoggie wonders what price you think it is worth. HA To be perfectly honest i feel it is a false security blanket to think one has "secrets", would it not be less of an ego trip just to say "i know what works for me " I mean we all know there are no SECRETS in trading, NONE. Better to share because that will enhance your trades.
I was asked in a PM if I'd illustrate some examples of my swing price reading. I'd be happy to.
A 4 hour chart is used, when I remember, to measure where I'm at in trends. It most closley resembles the action in a daily chart and is therefore a reliable read in swings.
I trade out of a 10 minute, 233 tick and 610 tick - and I'll admit sometimes I'll lose sight of the over all picture.
Here's a start to compliment my swing rules:
A 4 hour chart is used, when I remember, to measure where I'm at in trends. It most closley resembles the action in a daily chart and is therefore a reliable read in swings.
I trade out of a 10 minute, 233 tick and 610 tick - and I'll admit sometimes I'll lose sight of the over all picture.
Here's a start to compliment my swing rules:
Oh please. don't make me laugh with this nonsense. Every skilled daytrader knows there are no secrets or magic tricks in this business.
The only grail is your ability, developed from practice and experience, to catch price at strategic places in real time while having the courage and discipline to pull the trigger when you are right and wrong.
Susana
One greatest misconception I see among traders is that they think there is only one support or resistance throughout the day. In reality, there are many minor support and resistance that corroborate with one another to establish a major support or resistance.
Hence, there is no such thing as a "major" support or resistance in my dictionary. However, as I stated in my previous post, you can guage the momentum on its way up or down to the support/resistance to get a feel for how these price levels will hold up. Let's take an example. Suppose we just hit the support at 1250 and reversed course. Now it's trading at 1252. The next obvious resistance lies at 1261, which aligns with previous support in the past. However, there is a cluster of minor resistance looming over 1253, 1255, and 1258. All of these resistance will act as a barrier, much like those nasty bumps on the road to curb speed. Likewise, the momentum will be hampered with every encounter at these levels. By the time you reach your destination at 1261, you're flat out exhausted. As such, you rarely ever get a clearance on your first visit.
Having said that, the text book definition of a major support is spelled out as any price level that withstood the onslaught in the past. I have no qualm against that assertion, but if you bang enough times anything is likely to come toppling down. So my theory is that even a major support or resistance will get taken out, for the most part, on the second attempt. The key is just how quickly that will happen. The longer it takes, the lower its probability of success. Therefore, the wide spread notion that the third attempt usually ends up as a disaster tends to be equally true.
Again, it's all about P.M.T (Price, Momentum, and Time). So, pay up!
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