Here is my last trade for a bit has I have to run to town and do some errands. I moved around some of my annotations of the earlier 3 trades so as to make some room for this annotation for trade #4.
See once price starts a TR then I must change techniques. Since price is usually in a sideways move around 70% of the time in a session these TR can be quite profitable by fading tops and bottoms of them. Many traders will not trade them as they deem it noise. My posture is that there is no noise in the markets. Only movement. Techniques must be developed to capitalize on those movements. There are a few rules and things I look at while trading TRs.
1) 20 bars sideways to down in a bull market. sideways to up in a bear market. When I say market I am talking about the context of the previous trend (if any).
2) The range must be broad enough for at least a min scalp which I consider 1 point. This is explained in the next two concepts.
3) Not only must #2 be true but most of the bars in the TR must be at least the size of a min scalp.
4) The range must be at least 3x as broad and most of the bars (i.e.) the average size bar.
5) I have other techniques for trading TRs but if using the technique of fading the tops and bottoms of the TR then I will begin entries in the upper or lower 1/3 of the TR. That is: Shorting in the top 1/3 and going long in the bottom 1/3.
6) I want to see doji's and overlapping bars in the range as that indicates two-sided trading taking place. I prefer to see moves up and down within the TR.
7) When fading tops I will often scale in and exit on any move towards the center line of the range. Remember I am scalping (what some call noise LOL) and am not in it for a big homerun. Just look at this 4th trade. After my last exit it went on down through the center line of the TR but I was out with my profit. Sure I could have held for more but it could just as easy have turned up after my last exit. Besides if it goes on down which it did after my last exit will I short more? No! not without a very good reason like (like very strong mom). Instead, I am out with a profit and since it continued down I will now look to go long in bottom 1/3. I could have done so the very next 2 bars after my last exit and made more as it moved up and through the center line. But I didn't take that trade as I was too busy typing up this pretty chart LOL.
8) I will continue fading tops and bottoms scaling in when appropriate until there is a successful BO of the TR. What constitutes a successful BO is already in my journal if I recall.
If you like scalping 1 to 8 points in ES then this may interest you. Good luck! Henry Ford once said: "the harder I work the luckier I get!" Put in the work! Take the time to learn trading first on a SIM then live. If you can't make it work on a SIM it certainly won't work live.
Note: Notice my three scaled in short entries fading the top of the TR and my 3 scaled out exit as price moves towards center of the range. Grab those profits! (I am being nice here using palatable talk when saying "scaled in" ...it really is "averaging down" LOL the one rule drilled into us from the infancy of our trading experience as the one thing NOT to do.) I also watch the bar timer ...orange box top right as bar are forming. I like to how price is doing towards the last few seconds of the bar. It tells me who wins that bar, bears or bulls, and I can be johnny on the spot to execute a trade right at or after the close of the bar.
