Everytime the range broke I picked up a few more points, trading it in the direction of the breakout. I think I'm up like 18 points today. Also, in case any one is curious, I used 1 pt. stops outside of my range lines I drew.
Today was an extremely interesting day. It showed exactly why a trader needs multiple weapons in his arsenal. First it ranged, broke out, ranged, and then brokedown. The only thing it really didn't do was trend. The market was testing the lower range since the higher range had been tested yesterday. As you can see, in the morning the ES was definitely confined within the upper range of Monday's UVA and POC. It wasn't quite ready to go back into Tuesday's range and rotated back and forth. The news of the capture of another high ranking Hussein official catapulted it into Tuesday's range, but could not extend it beyond Tuesday. The market searched for value in Tuesday's range and again found it wanting, but the lower range was also found wanting. In my opinion, it appeared to me that the market was trying to find a happy medium between Monday's upper range and Tuesday's lower range. Anyways, I would be hesistant to use this method tomorrow. Numbers and Greenspan move markets and men, so watch out! I don't expect tomorrow to be as simple, boring, and profitable as the past two days. Watch for breakouts and trends as Market Profile is at its weakest in these types of markets. The value areas would be good for entry/exit points and potential support/resistance. Support and resistance, that's all it is. PRICE DOES NOT EXIST IN A VACUUM. Traders are rotating the market in order to find potential buyers/sellers. That's what making a market is all about.
JT- Good thread. The range bound days are usually my worst days. In the past I have faded bollband breaks...which works ok...but I do fall for false breakouts from tme to time. I hope this thread continues. Happy Trading
Do people not know what the heck the search function is for? For esignal users. http://share.esignal.com/groupcontents.jsp?folder=&groupid=114
BTW - Ensign users using "Price Histogram" to do this - beware. I've had some odd issues with the bands calculating differently depending on how I have my chart scaled. Changing the vertical scale of my chart many times changes the values of the range bars - which makes no sense - they should stay the same no matter the scale of the chart. I'm waiting to hear back from Ensign support on this.