The Trouble With Scribbles

Buy1Sell2 said:
This is not true. If price spike up or down on the 5, you should know where you are on the 15 and 60. If they all agree on direction and the 60 and 15 are either oversold according to RSI and turning up in the case of a long, or overbought according to RSI and turning down on the case of a short. The analysis in the quoted posting here is singularly self-defeating.
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You're missing the point. One doesn't buy spikes or sell drops if they like mitigating risk and making money. They wait until a pullback that agrees with the bigger picture (that we agree on) and then put the trade on.
 
i960 said:
You're missing the point. One doesn't buy spikes or sell drops if they like mitigating risk and making money. They wait until a pullback that agrees with the bigger picture (that we agree on) and then put the trade on.
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Not every trade is a descendant of the retrace-family, many of them are simply breakouts, buy high, sell low and no time for pullbacks or else..... leaves without you.
 
Autodidact said:
Not every trade is a descendant of the retrace-family, many of them are simply breakouts, buy high, sell low and no time for pullbacks or else..... leaves without you.
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Of course not every trade is like that but the VAST majority of trades are. So given that break-through/retrace trades are the overwhelming majority why would one ever target the break-through/never-retrace trades with buy or sell stops when they have a high likelihood of getting screwed? This assumes someone actually wants to hold the trade for more than just the breakout itself.

Even in the more aggressive instruments like crude, you're not seeing 100 tick rips without a retrace on non news events. The likelihood of entering with slippage on momentum only to have it retrace and take you out is high.
 
now we have the 60, the 15 and the 5 all in overbought territory. This is a much likelier scenario for where shorting could work. It is also a place to consider taking profits if you have been long on these frames Be careful about initiating new longs here if trading these frames. Looking now for places where the short term reversal will happen
 
Here are the rules that I use in trading my system.

1. Keep losses small. (Never risk more than 2% of Total Liquid Net Worth on any one trade/idea.)

2. Let winners run using stops outside the noise.

3. Keep commissions small

4. Don't scale in or scale out.
 
Here's how the 5 min looks today. Buy signal created in the wee hours again. But it could also have been bought in RTH. With the 5, 15 and 60 now all overbought, one would consider taking profit.
 
upload_2015-5-4_9-44-27.png
 
Here is the view of the 15 today---note the same buy in the small hours. Profit taken when very overbought. In order to actually short for an extended gain, one would need the 60, 15 and 5 to all show reversal with momentum to the downside. --and that hasn't happened yet. Odds are greater that a buy signal on the 5 would be more advantageous to take until that happens.
upload_2015-5-4_10-53-41.png
 
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