Why Is The Obvious Not So Obvious?

Quote from baron193:



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Question: why go long on chart above?
We will be going against the immediate trend, what is different about this minor formation?
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B193

Good question, at first glance price broke out of the down trend – and that is what I commented on

Now that I’ve taken a closer look

========================================================

Yes price broke out of the DT (longer red line), but

Then pulled back and was rejected (longest horizontal black line)
Then made a LH (short red DT line)
Consolidated (the short black parallel lines)
Then broke out to the down side of the consolidation (which is where price is now)


Also right before price broke out of the DT (longer red line) – it did not make a HL, in fact quite to opposite – it made a LL

After reviewing, I would say my go long call would have turned out a loser


Good catch Sir (but did you pick up all the detail I just explained – rhetorical as I’m not here to pick)

Detail is important - I missed a bunch with my first call on this one



RN
 

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Quote from IntelliBitz:

Hi RN,

If we need to risk as low as possible, then should the entries be trying to catch the lows and highs? Or is the stoploss very very close to your entry?
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Yes my stops are very near my entries

Having said that - go write this 1M times

We will never know what is high.., or low until after the fact (and obviously too late to exploit)


The answer is in making succinct, and accurate context

Accurate meaning - it must be in tune with price (sans our opinion)

Succinct meaning - less is more (allows us to focus on price, not a bunch of lines)

Picking tops/ bottoms (highs / lows) is a losers game - period

RN
 
so making a consistently accurate contextual read of price during the day is very important?

reading the structure of price that day is more important than any pattern that comes up?

how do you/I LEARN to constantly read the market with enough accuracy to know it is going to be profitable? not always right, just profitable.
 
Quote from jas_in_hbca:

Thanks RN,

You've got set up areas. Triggers ? In that last yellow box would you look to buy near the up sloping TL ? Do you buy the upside B/O or would you wait for a B/O pullback to see if it holds.

Thank you !
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JAS


Me posting setups/ entries is getting too close to me appearing to make calls/ tell others how to trade

And I am not comfortable with that



Here’s what I’ll say

Reading price – is an absolute necessary skill

Creating context, which is in tune with price – is absolutely necessary

Being able to think out of both sides of our brain – is absolutely necessary (long/ short/ stand pat)


Then setups (an entry, stop loss exit, and target) become a dime a dozen


In fact – every tick of price is a signal – to enter, exit, or stand pat


=====================================================================

Learn to build proper context and trust it

Trend lines are diagonal S&R lines…, just as horizontal S&R lines are


Price touching and being rejected off either – is a set up

Price breaking through either and continuing – is a set up


As are many.., many more signals – if you but learn to extrapolate them from price


Btw Thank You for the kind words awhile back

If you have specific questions about set ups, please ask


RN
 
Quote from Redneck:

B193

Good question, at first glance price broke out of the down trend – and that is what I commented on

Now that I’ve taken a closer look

========================================================

Yes price broke out of the DT (longer red line), but

Then pulled back and was rejected (longest horizontal black line)
Then made a LH (short red DT line)
Consolidated (the short black parallel lines)
Then broke out to the down side of the consolidation (which is where price is now)


Also right before price broke out of the DT (longer red line) – it did not make a HL, in fact quite to opposite – it made a LL

After reviewing, I would say my go long call would have turned out a loser


Good catch Sir (but did you pick up all the detail I just explained – rhetorical as I’m not here to pick)

Detail is important - I missed a bunch with my first call on this one



RN
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Thank you for the detailed answer, no i don't get all the details yet, but i will, once i taken my time to think it over (it does take time when you're a bit slow):)
 
Quote from baron193:



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If long my first entry would be at the bottom of the consolidation with second entry at the BO, depending on the history of the rest of the chart and any possible news coming out, stops moved to BE on the bottom entry and i would either exit one lot on the resistance or on 1 min TF will be holding on to the button ready to exit, as it is likely a second consolidation will occur here with perhaps another BO, if that happens my aim would be the pivot above.
With price coming down to meet new up TL for a third touch another entry is possible.
Will also be watching for a fake BO of current resistance.
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I must add, another major S/R line exists between the second and third from top, the green TL did not exist at time of entry long, only after new high was made.
 
Quote from baron193:

I must add, another major S/R line exists between the second and third from top, the green TL did not exist at time of entry long, only after new high was made.
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B193

Something to ponder,

Price is acknowledging the green trend line, why not make a break of it your stop out

Lowers your risk - no??

Locks in profit - no??

A break would also say the uptrend may be ending - and a time to look short - no??

RN
 
that could work but isnt that just another dime a dozen pattern? i know we are looking at playing price for what it is right now and not what it will be but there are many charts that this exact trade doesnt work on. how do we teach ourselves to recognize the context of this.
 
Quote from xburbx:

so making a consistently accurate contextual read of price during the day is very important?

reading the structure of price that day is more important than any pattern that comes up?

how do you/I LEARN to constantly read the market with enough accuracy to know it is going to be profitable? not always right, just profitable.
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Hey XB

1.) Yes

2.) Yes - imo

3.) Learn to read the mkt.., by starting at the overall view (quarterly/ monthly TF’s) , then drilling all the way through down to the one minute

While realizing the quarterly/ monthly is built on the back of the one minute

iow all time frames are interlinked…, not discrete snap shots of time


3a.) We've got to used to the fact – knowing anything - with respect to trading – is impossible

RN
 
Quote from xburbx:

that could work but isnt that just another dime a dozen pattern?

i know we are looking at playing price for what it is right now and not what it will be but there are many charts that this exact trade doesnt work on.


how do we teach ourselves to recognize the context of this.
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It is if you want it to be

I’ve never seen a tradable chart where they don’t work – love to see one

Price is only doing one of three things ever – going up, down, or sideways – never fight it

Learn to read price… in its overall context..., and in its specific context

==========================================================================


Recall this thread is not how to trade…, but how to think like a trader

That said, trend lines don’t work for you – no worries – it is simply how I think.., create context, and trade (vertically, horizontally, diagonally)



As for when one doesn’t work, time to exit.., possibly reverse..,

Maybe even think about drawing a trend line in the opposite direction..., or horizontally

Without context price acknowledges, trading is near impossible - imho

RN
 
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