Trading Ranges, Support, and Resistance

[Spectre2007]

You have to aim for homeruns, and capitalize on it, instead of taking profits. Your win needs to compensate for multiple strikes.

So which SRs are more likely to lead to homeruns? Usually ones at periphery of ATRs.

 

[SimpleMeLike]

Trading for a Living - Elder

Thank you

 

[murray t turtle]

I can't help with your first two questions, but can try the third ...





Not really, no: it's primarily considered "identifying reversals", and secondarily (perhaps, the way you describe it) "trading ranges", which conceptually overlaps with that anyway, on a smaller scale.

What you describe, overall (which reminds me a little of "pin-bars on the line") is certainly in itself a valid and reasonable way of trading, together with some price action knowledge and experience.

%%
1] Market Makers Edge , by Joshua Lukeman
2]Same pattern as #1
3] I would not call that a countertrend if it was monthly candles,;
with daily or 5 minute charts, i would call/name it a counter trend. I like to learn to id good trends if i wanted to do countertrends, thus the MM edge book. But Andrew Carnegie noted first man get the pearl, last man gets the shell. But come to find out Andrew Carnegie could have waited more, more asking prices[polite] + got more, selling US Steel JPM admitted, so depends on what you want

 

[SimpleMeLike]

You have to aim for homeruns, and capitalize on it, instead of taking profits.

Thanks Spectre2007,

When you state "aim for homeruns and capitalize on it"? Are you referring to increasing size on high probability trades?

 

[Jzwu2017]

It’s not the high probability trades, but high reward/risk trades.

You can scalp with high probability trades, but the winnings are rather small after spread, commissions and slippage. However, if you nail on a big move/trend it will be much more than all the small winnings combined.

 

[Spectre2007]

Thanks Spectre2007,

When you state "aim for homeruns and capitalize on it"? Are you referring to increasing size on high probability trades?

No size stays same since every trade you enter should be high probability trade. Increasing size is more a Martingale technique, and only done with small incremental units to start with. Consolidation patterns ramp up the units till breakout. It’s the only way I know to beat consolidative patterns. But it can be deadly if not done judicially.

The consolidative pattern can persist longer than the equity in your account. Any large institution can market make around a significant SR level. Meaning they can keep increasing units indefinitely till a breakout occurs and they achieve net profit.

As unit size increases, the distance price needs to breakout from SR levels gets closer and closer to be in net profit. This can also be done after significant news event.

 

[SimpleMeLike]

You have missed the most important part of breakout/breakdown trading---The second mouse gets the cheese.

Buy1Sell2,

is this what you mean by 2nd mouse gets the cheese. breakout occurred at support. instead of just hopping (first mouse) on the downside, i wait for retrace (second mouse)

 

[Buy1Sell2]

Buy1Sell2,

is this what you mean by 2nd mouse gets the cheese. breakout occurred at support. instead of just hopping (first mouse) on the downside, i wait for retrace (second mouse)

View attachment 182057

The retrace with fresh momentum in your direction will establish new resistance/support and give you a nice filter. In your example the second mouse has not gotten out of bed yet and I realize your charting is somewhat futuristic

 

[Buy1Sell2]

Look at ES on Thurs 1/25. You'll see resistance formed midday at around 2848.
That resistance was broken a couple of hours prior to open on 1/26. Your confirm of the impending upmove comes late morning 1/26 though and that is the safest place to get on board if trading breakouts.

 

[SimpleMeLike]

In your example the second mouse has not gotten out of bed yet and I realize your charting is somewhat futuristic

Thanks Buy1Sell2 for explanation.