I gotta say, I'm quite sad about today. The simple act of sliding up that profit target which got me out so soon from my first short really set up the whole day to be unproductive.
Coming back to the charts now, I see that price continued higher, and turned around just below the OH again, here at L. This was hit at 10am (my chart time), and it took 15 minutes to really drop down below the little range that was forming. What is important to see here though was the failure of traders to take price past 95.50. It matches to the tick the previous high shortly after the open and set up a 15 point move down. I doubt I would hold to the bottom, but it was still a great trade. Had I not been upset from how the day started, I wouldn't have left so soon, and might have take this short again since price got to this level again only 90 minutes into the open.
The other thing I see on the chart now is this hinge that formed at the bottom at M. I know that in real time, I might draw the lines differently, heck, I more than likely wouldn't even be around, clearly I wasn't. But the hinge action is clear, and I understand the behavior behing it, and once price leaves the hinge, it really keeps going.
Other than this hinge, most of this action between 78 and 96 I can't make too much sense of, but there was enough just in the first hour to profit from.
After spending so much time studying over the weekend I do feel as if I'm quite close, so I am moving in the right direction, but its just such a shame to not be able to monopolize on any of it today.
What I have seen in my testing is that taking automatic reversal at the levels outlined does work, but not often enough to blindly take the trades. Sometimes price congests around these levels, and I might get chopped up by trying both longs and shorts with price stuck in a range at this level. So the secret really is to watch the tick chart. The beautiful thing about these levels is that the exits are quite clear to me, and when price does reverse, it tends to set up an excellent trade.
As an example, today when price hit the bottom of the overnight range just before that hinge, I can see that it penetrated by only 3 ticks before it reversed up. If the long was taken, price only went about 2.5 points higher before coming down again. But the thing is that there was plenty of time for an exit at BE or even a point profit and not much had to be risked. This overnight low is pretty much the level of where the apex of the hinge would be, so this level certainly does just out for traders I think since it made both sides fight for it.
Oh, and before I finish, I also see the importance of the 50% levels. If we look at the move from N to P, we can see that the RET up to Q is 50% of the down move. Price couldn't retrace more than 50% so the down move had strength. If we consider the larger move of N to R, we can see that S is 50% of this down move, and same thing, price dropped after retracing only 50%, so more strength in the down move.
I can see this things so clearly, its just that being in the middle of a trade I find it difficult to hang on when money is at stake. I sometimes wonder if just for me, it would be better to put on a trade with a defined stop and profit, maybe in the form or a 1:2 ratio and just walk away. My managing of trades is horrible, so a stepping stone for me might be to walk away and give the trade time to work since I am impatient. This might teach me to not be freaked out by the slightest hesitation or when price is taking too long to move in my favor. Having just a few wins under my belt might do a world of wonder to my psyche. For my first short, I didn't have to move my stop at all. It was over a point above the OH level, a very well defined stop level, and price never got close, but messing with the profit target is what really messed me up and I didn't give it any time.
Coming back to the charts now, I see that price continued higher, and turned around just below the OH again, here at L. This was hit at 10am (my chart time), and it took 15 minutes to really drop down below the little range that was forming. What is important to see here though was the failure of traders to take price past 95.50. It matches to the tick the previous high shortly after the open and set up a 15 point move down. I doubt I would hold to the bottom, but it was still a great trade. Had I not been upset from how the day started, I wouldn't have left so soon, and might have take this short again since price got to this level again only 90 minutes into the open.
The other thing I see on the chart now is this hinge that formed at the bottom at M. I know that in real time, I might draw the lines differently, heck, I more than likely wouldn't even be around, clearly I wasn't. But the hinge action is clear, and I understand the behavior behing it, and once price leaves the hinge, it really keeps going.
Other than this hinge, most of this action between 78 and 96 I can't make too much sense of, but there was enough just in the first hour to profit from.
After spending so much time studying over the weekend I do feel as if I'm quite close, so I am moving in the right direction, but its just such a shame to not be able to monopolize on any of it today.
What I have seen in my testing is that taking automatic reversal at the levels outlined does work, but not often enough to blindly take the trades. Sometimes price congests around these levels, and I might get chopped up by trying both longs and shorts with price stuck in a range at this level. So the secret really is to watch the tick chart. The beautiful thing about these levels is that the exits are quite clear to me, and when price does reverse, it tends to set up an excellent trade.
As an example, today when price hit the bottom of the overnight range just before that hinge, I can see that it penetrated by only 3 ticks before it reversed up. If the long was taken, price only went about 2.5 points higher before coming down again. But the thing is that there was plenty of time for an exit at BE or even a point profit and not much had to be risked. This overnight low is pretty much the level of where the apex of the hinge would be, so this level certainly does just out for traders I think since it made both sides fight for it.
Oh, and before I finish, I also see the importance of the 50% levels. If we look at the move from N to P, we can see that the RET up to Q is 50% of the down move. Price couldn't retrace more than 50% so the down move had strength. If we consider the larger move of N to R, we can see that S is 50% of this down move, and same thing, price dropped after retracing only 50%, so more strength in the down move.
I can see this things so clearly, its just that being in the middle of a trade I find it difficult to hang on when money is at stake. I sometimes wonder if just for me, it would be better to put on a trade with a defined stop and profit, maybe in the form or a 1:2 ratio and just walk away. My managing of trades is horrible, so a stepping stone for me might be to walk away and give the trade time to work since I am impatient. This might teach me to not be freaked out by the slightest hesitation or when price is taking too long to move in my favor. Having just a few wins under my belt might do a world of wonder to my psyche. For my first short, I didn't have to move my stop at all. It was over a point above the OH level, a very well defined stop level, and price never got close, but messing with the profit target is what really messed me up and I didn't give it any time.
Since I probably took about 6 "scalps", with only 2 I think being positive for a point each, well, I'm a bit shy of the necessary 90% success rate.
