I'm a new trader, I see pattern like this a lot in intraday line charts, and I'm really curious how successful day traders deal with it. What are your your entry and exit point? Will you cultivate a short price range between point A and B? Would you cut your long position loss at point C? Would you make a bet on point E? Thanks!
Just backtest it and then simulate trade it...you'll then be "a little" better prepared to trade it with real money. Yet, just be aware that the pattern is just one piece of the puzzle.
It looks like a failed breakout that took out stops to the downside. I'd probably want to be long, but only on a break and retest
80% of range breakouts fail. Being in favor of the underlying trend helps. Source: Al Brooks and experience.
It's an early stage expanding triangle. It's likely to continue to chop wider with each whipsaw until a dominant trend forms. If it continues to whip and completes the triangle pattern then the trend that eventually follows should be huge.
Wow, thanks so much for all your replies, they were very helpful! Funny that when I cut the loss, the breakout usually fails; but if I don't, the loss grows. My trade size is around $10K, I used to sell my long position when the profit/loss reaches at least $50, often much higher; now I would sell when it's $20~30, or even less, by doing this my fund is under my tight control, which feels much safer. But I seem to be on the way to be a scalper, I don't like this word.
once you begin to trust yourself, then you may be able to let the market tell you how much is available in any one trade. If you are unsatisfied with 20 or 30, maybe try losing every trade and see how that feels. I guess winning feels better for most people
No, I'm not being unsatisfied with the $20 profit, I'm just not sure if I'm on the right track, that's why I eager to know how successful day traders trade. I did earn $600 on a lucky day, but I also lost over $1000 on a bad day, and the worst part is that my account is NOT in my control, I don't like that. I changed my daily target to $50 this month, it feels good.
For me, upon 3rd touch of an area(A), I would enter long so many cents above the lows, not knowing how many bars between highs/lows so as a way to get to better than breakeven stop, then reverse after 3rd touch of highs(B) and falling back down, risk in just couple cents above area. Again, not knowing the stock nor what the average swing lengths, it is hard to know where to take partial profits but have to lock in better than breakeven protective stops, but I would not trail as markets tend to go up to previous lows and then bounce back down at which time you can enter more short. I would not try shorting again if price went 75% plus retracement between (E) and (B). As far as (D), I 'd wait for price to go up some then retrace to perhaps 50% of distance of (B) and (C). Having VOLUME is good way to trail stops as it will show reduction in interest when volume declines after volume increased, like a volume divergence.
That's amusing, you have feelings? I have no feelings whether I profit or lose, trades happen fast enough, it strictly numbers game, you get to a point where it is just a job, you are numb, it is like I can not wait for 75 minutes to go by in ES so I can quit for the day.... Then you know you playing the game well enough. "Bingo"