A - Not much happening around the open here.
B - We do bounce off 17, our overnight low, but still, it seems calm so I'm not even thinking about acting yet. REVs of course would have to be taken decisively, but this level wasn't one of those where price kept bumping up against it and couldn't cross. It was only touched once, not exactly an established level.
C - This Lower High allows for a SL to be drawn.
D- Coming down to 14 was rather quick. Now the frame of mind I am in now is that this looks like a down slopping channel. I see my green line, previous day low, but all I am expecting is to go up, and then come back down through it, as would happen if the channel continued down. Instead, for 3 more minutes, we have a serious a slightly higher lows. What we also have is a series of slightly lower highs. I drew my hinge in later, because as you can see by my possible short shown, I was still thinking to go short. Because of this, I fanned my SL down (light pink), because had price hit the entry for the short, this bar would provide the lower swing high that would be used for the SL.
E - Instead, price made another higher low on the next bar and shot up. It also broke through the non-fanned SL rather quickly. No way to get in, and even attaching the 15 second chart, there is no way to get in.
LESSON - Looking at it now, this is obviously a REV at the previous day low. So taking a REV trade is one way to treat this. I have decided that if I see the REV, or this it might happen here based on a tick chart, I would only take a trade like this at an important level, and a PDL should be good enough, and I will take it maybe within a point, based on a RET in the tick chart, and I would have a super tight stop, just one point beyond the level. I didn't do any of this today, wasn't prepared for it, but I see it here, and I see it would have worked here, and the risk is only 2 points (trade entered one point above level if the RET is there on tick chart, stop one point below the level - hence a 2 point loss if I should happen to enter above but price goes down below). When these REVs work, price only penetrates the level by a tick or two, hardly ever a whole point I would say, so this strategy I think will work well, maybe not often, but getting into the long at essentially 3715 is highly lucrative.
Another way to treat this would be a hinge as I have drawn in, but this was way after price had moved up. How do I trade an exit from a hinge? I would wait for a RET, but here it doesn't happen. I could maybe trade in on a 15 sec, but this too isn't fast enough. The problem with waiting for a RET is that often times, price comes back to test the exit level, so if I wait till I'm a few points away from the hinge to enter, the test might stop me out.
F - Here is our official SLA entry. Would you know it.. it works quite well! I didn't take it simply because the day was so inconsistent, and if you read my journal, you know how much I like to have excuses for not taking trades.
(well good trades mind you, I clearly don't mind taking stupid trades!)
G - DL broken... RET doesn't happen.
H - We made a HH, so we were able to fan our DL, but it breaks again.
I - Here a short sets up, and triggers. It goes against you right away, but less than 2 points, and hopefully the exit would be for only a point loss when the line does break.
J - Here a long sets up, triggers as well, but also would be scratched.
And since we have two scratches in a row, better wait for price to go somewhere else. As you can see, price does just go sideways.... so this is a good rule indeed!
Will follow this post up I think with more analysis as the day got a bit more interesting.
