Some like dojis, inside bars and breakouts from them. Dont matter for a whole position and sl too tight loses trading virginity
I PERFER to do back testing then be asking the masses who are going to give you answers that actually are not going to help much at all. I get many ideas from the forum, but unless I back tested ideas, I will NEVER trade without solid proof that after 10,000 samples of whether it will work and from the MAE and MFE will help on stops then test the time. Your idea of "right area of the chart" what does that even mean? first off do you understand what a swing is as all have different definitions of such. And some have a counter trend trade that may start before the trend does as right shoulder of H&S or "Secondary low" which is a bar that fails to make new lows and often they are down candles and next bar might go up and breaking the high of previous bar's high and close above that high. Do you take 10 day average of each trading hour swings and duration of time to complete swing? Or are you waiting for new trend to start and what definition using for trend, something trend does no start until five wave of the swing which means trend might be near over. And what about breaking 2nd pivot back and you get a down candle, if using sma, trend might be up and price structure showing trend down as confirmation is close below 2nd pivot and recent pivot high was end of the trend, but ema, wma, sma is too slow, but what now since it looks like "entry is in the right area of the chart." As a scalper I have a over dozen signals which means they pile up and grouped together in tight cluster, more signals the better, some are down bars, some are 5th down bar, some going up, some are going to be breakouts, some are distance trades, there are counter trend trades, support/resistance, H&S, some based on angles, 3 are based on volume, too much/too little, one is based on speed, couple based on spoofing, trendline traps, breaking of HOD/LOD, most I risk same amount regardless of where I enter and reason is from back testing. Some signals happen only when other signals are present. Because the entry is least of his concerns, market structure, time of the day, risk and time management, break down of price, break down of waves, over extended or under extended swing, Day session S&P Index open, Swing ave.. Traders I have helped usually spend 2 years learning concepts of price structure, so asking if risk going to be smaller cause it is a down bar, IMHO is absurd and showing him what a picture of down candle? I would be fool to do so as most would not understand wave and swing structure. Are you aware that swings making new contract highs are smaller in first hour than swings ten days from the highs? Are you a where that weeks that have four or less trading days are much tougher to trade than full weeks? And more often the first hour is more volatile and less direction than five day week. When one has all the answers of when not to trade, entries are so simple. Tuesday after holiday can be a hummer all.
When I develop a system, I always look at the preceding day's candle, and yes I have found that it is good to buy, under certain conditions, after a down candle, and vice-versa.
%% I like best what William O Neill o[IBD , Investors Business Daily]notes... do not miss the move, by trying to save a $ 00.25............................................................................
Hello, I think this is bit of a personal decision initially in your trading strategy. I perfer entering on a "down candle" or retrace so my stop loss does not have to be very big if entering on the "up candle" or momentum. My rationale is that I hope the entering on the retrace the trend of the moment will continue in its initially direction. This is also depends on what time frame you are using. A small time frame may experience more retrace. Like I said, in my opinion it really depends personal or even better what you have back tested over series of trades. But I do prefer retrace entry, because I am cheap buyer/seller personally. lol
Oh yesss, this is true, buying on retrace or down candle, you may miss some good moves. Yes, i have experienced this. So its a catch 22, waiting for that retrace you may miss it.