Working on Consistent Profitability

[tlow]

Nod,

Thanks for the analysis...The whole "wiggle room" thing is something I definitely need work on. Would you only let the PA dictate what you were going to do in trade 1 had you done the same entry as me? Meaning it doesn't matter what the stop is, the breakout failed, exit right away, look to go back in if the set-up holds?

bigsnack,

Thanks for the chart, I may go back to the 512 chart (started with that but then switched cuz didn't like the noise). It makes it a bit easier to see where price stalls. I don't mind being late to the party, because it usually gives more confirmation...but I think definitely in trade 1 it obviously would've been better to get in on the 2nd leg. The 2nd trade, I don't think I would've done it differently. We were still in a downtrend in my eyes until that move up above around 1151.25 at 10:55ish. So ya, I guess I could've gotten in then....hmmmm, but that is hindsight and I guess I feel like I would still be going against the trend. Who's to say it wouldn't make a double top there, then continue lower...what confirmation would you use to confirm that the LOD had been put in and we are now in a reversal? I guess I have a hard time taking those trades when there's not a whole lot of confirmation. Thoughts?

 

[bigsnack]

Quote from tlow:


bigsnack,

Who's to say it wouldn't make a double top there, then continue lower...what confirmation would you use to confirm that the LOD had been put in and we are now in a reversal? I guess I have a hard time taking those trades when there's not a whole lot of confirmation. Thoughts?

Tlow,

There are a couple of things that led to a long at 49.50's. First things first, we have a clear resistance turned support at that level. Secondly, let's say that the hesitation at 51.25's was the beginning of a new downward leg. If that is the case, then the next area that we can expect resistance at would be 50.25's around 10:40, where a micro failed support should be sold as resistance. When that fails to happen at around 10:45 pst, I would have even more confidence that the long was looking good. Lastly, the TICK is my one indicator crutch, and it gave me a directional bias in this case. I have levels on the TICK I watch, and closes above or below certain levels have significance for me (Easy to ID what levels I care about just by looking at my chart).

The way I see it, whether you are biased short or long at the 10 - 10:45 time frame, there are clear entries that give you a chance to keep a very tight stop in place. Had I shorted 1150 / 1150.25's around 10:40, I would have known within minutes or ticks that I had made the wrong decision.

 

[NoDoji]

Quote from tlow:

Nod,

Thanks for the analysis...The whole "wiggle room" thing is something I definitely need work on. Would you only let the PA dictate what you were going to do in trade 1 had you done the same entry as me? Meaning it doesn't matter what the stop is, the breakout failed, exit right away, look to go back in if the set-up holds?

I trade breakouts on CL a lot and I traded breakouts on ES back when I traded it more regularly. I expect follow through and if I don't get it, I'll bail at or near b/e (never more than a $100/contract stop loss). You can always get back in, but as you can see, the wider stop is difficult to recover from.

 

[tlow]

Bigsnack,

I found a chart thats not quite the same as today but similar idea...So where I have marked, you would look to go long there? If so, with what kind of stop and what kind of target?

 

[tlow]

Here's another for your viewing pleasure and input...thanks!

 

[NoDoji]

Quote from tlow:

Bigsnack,

I found a chart thats not quite the same as today but similar idea...So where I have marked, you would look to go long there? If so, with what kind of stop and what kind of target?

I'll throw in my 2 cents. I'd find the R:R to be poor taking a breakout long entry after a pretty strong break of the previous uptrend and price at the 50% retracement level of the move from the pivot high to the pivot low on that chart. I play breakouts with the trend, buying a new high or selling a new low. For long entries off large down moves where you're anticipating a reversal, I prefer to enter off a pullback pivot, preferably catching the first higher low.

 

[bigsnack]

Quote from tlow:

Bigsnack,

I found a chart thats not quite the same as today but similar idea...So where I have marked, you would look to go long there? If so, with what kind of stop and what kind of target?

Tlow, I'm in agreement with NoD that there doesn't seem to be a high probability long in the first example. 1081's was a failed support that has yet to be tested as resistance, so even if you buy an R to S here, 81's is so darn close that it may not be worth it. If price were to pull back and bounce, I would have to aim for a bounce at 77.75's (most recent resistance turned support). On the other hand, if we traded up to 1081's and then a micro support failed and turned to resistance, I would be willing to sell.

 

[bigsnack]

Quote from tlow:

Here's another for your viewing pleasure and input...thanks!

Tlow,

The chart seems more ripe for a long, BUT the entry is already gone. 92's or 91.75's would have been the ideal spot for an entry IMO. You will notice on the small timeframe that 92's tried to bounce as support and failed, then tried to hold as resistance, and then failed, and then bounced again and moved upward. I would target 96.50's for that trade if I had gotten in. You can almost treat areas like that as tiny head and shoulders. Also, hindsight shows that 1090's was the first true resistance turned support, but you would never have been filled.

Waddya think?

 

[tlow]

Chart 1,

What you guys say makes sense...

Chart2,

Would you be long on that 1st wave up above 1092 or the 2nd push? That area looks like chop to me so I have a hard time verifying the s/r, need more time i guess. Also here is the rest of the day. How would you handle the rest of the trade as far as exiting when price turned against you or waiting till it hit your stop?

 

[bigsnack]

Tlow,

From the time dashes on the chart you posted, I would be long at 12:15. Based on my rules, my stop goes to b/e after +6 ticks, so it would have been a break even trade minus commissions. Now I'm definitely not saying that I wouldn't have taken this trade, but I would be curious to see what the TICK was doing there to see if it matched my other criteria. From a price only point of view, I would still stand by my original entry, but it obviously didn't work out.

Now, taking it further, let's say I didn't keep a super tight mechanical stop, and wanted to just know when to exit the trade and call it a loss. Shortly after the long entry, we see a reaction and we start to move higher. I'm expecting support at 1093's (micro resistance turned support). If and when that doesn't happen, I would flatten immediately. Basically I'm trying to manage the trade based on the time frame that I am entering. If I enter on the micro swing time frame, I have to manage it on that same time frame. I would have most likely called it a day after that b/e stop, but if you were feeling extra sharp, you could turn right around and sell 91.75's when we break through micro support turned resistance.