The very definition of "resistance"... everybody should have got this

Scataphagos

Scataphagos

"Matched high resistance"... for a sell/short

Don't know whether support ~5440 will hold, but that's a separate trade. Fact is... 5510 clearly identified as possible resistance, held for 60 pt drop.... $3,000/contract.

Price TA... KISS, baby.

FWIW....

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how far would you have let it go against you before exiting after entering on that second resistance touch/yellow arrow? pretending that it continued north instead of dumping so hard like you wanted.
 
zghorner said:
how far would you have let it go against you before exiting after entering on that second resistance touch/yellow arrow? pretending that it continued north instead of dumping so hard like you wanted.
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"How far to let a move go against a play?" is a stop issue. Some will trade with tight stops. Some with looser stops. Stops are subjective, no "right answer".

One thing for sure... if the "resistance level" is breached, one needs to recognize that their short play is at risk. (Hey, the resistance level was "supposed to hold", but it didn't so far.) Where to "pull the plug" is subjective. Personally, I'm in the camp of "10 points or less, depending upon how close I got to the best entry on the ES". After all, a "failed break" is a strong technical indication. That's why one needs a "buffer" for a stop. (You would hope that your stop would encompass a failed break.... can't say for sure what amount to risk is "proper"*... all a subjective guess.)

One of the biggest potential trades ($600k) I missed was by 1 tic on a limit buy. One of the biggest gains I ever caught came within 1 tic of being stopped out before reversing for a big run. (Bad luck, good luck in both cases.) Where one places stops is a subjective guess/hope. Stops are a necessity to protect capital, regardless.
 
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Scataphagos said:
One of the biggest potential trades ($600k) I missed was by 1 tic on a limit buy. One of the biggest gains I ever caught came within 1 tic of being stopped out before reversing for a big run. (Bad luck, good luck in both cases.) Where one places stops is a subjective guess/hope. Stops are a necessity to protect capital, regardless.
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We can be wrong in any decision making; when we buy, when we sell or where we place stops.
It's an art, the art is in the ability to be flexible and realise the error and correct.

But trading again is a skill, we can be wrong when we sell, then self correct, then discover our initial wrong trade was correct and our subsequent correct was wrong.
 
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