Now taking into account the 2 levels that were "hit" today (from the previous post), how do you take into consideration those turning points in the analysis?
The low occurred within a level bound by yesterday's opening range high and the high of the long afternoon consolidation at the (then) highs of the day ... so the best interpretation of today's low is that buyers renewed their willing ness to take on shares at a test of the highs of yesterday's range - that looks pretty clear to me. I didn't trade today at all so I can't tell you that I saw it and traded it ... though I probably should have lol. The little pullback you ask about was simple a failed attempt to breakout above the opening range high. The pullback was supported again by buyers willing to step in at the level of yesterday's high/close. What bar interval are you using? The chart you use for entries is probaly too fast and you are losing sight of the context. I trade off a 1500 tick chart during current volatility but I watch a both 5 minute or 15 minute charts as well for S/R and a daily for overall context.
Thanks I will then include the range extremes in my observations. Will look into this as well. I use 1 Min, as I always do. I currently trade between 8 to 10 AM I rarely stay until noon, unless I get a trend day. So I use very short term intervals. BTW I do not trade ES, but given that your expertise seems to be in that market, I am exploring those charts. If your suggestion is to jump to a larger interval, that is Ok by me. As I said I am just learning about this S/R world. Thank you very much for the time.
You should use what you feel comfortable with using. I was merely suggesting that focusing on a quicker bar interval often times allows one truly to miss the forest for the trees. Not a bad idea to have a map of the forest in the form of a 5 or even a 15 minute chart, even if you are using a 1 minute to manage your actual entries/exits. I use a fairly fast chart myself, but I always keep the 5 and 15 minute in view, and periodically check the daily as well (maybe 2 to 3's a day ... but I trade all day except in the summer. What is your market?
I feel comfortable using any interval I have tested enough with a written trading plan, so that is not really an issue. As I said I am trying to learn how to deal with S/R, specifically horizontal S/R as the suggestion has been made around using MAs or Trendlines as such. Today I plotted the 1500 Tick, just to make sure we are talking in the same language. The day opened at a R level 56.50, I was trading something else at the moment, so I couldn't pay attention to this in RT (And to reply to your question, it was CL), but in hindsight I noticed that the first thing that happened here was a LH below R, but it failed and then came a HL above that R, from there a trend started. It rallied towards 67.75 that was my next level plotted. Before they could make it there, a Break of LSL ocurred, but instead of turning into a trend it rapidly became a congestion. Finally 67.75 was reached and the trend restarted. It rallied again towards the next level or R and just a couple of ticks above it we found S strong enough to change the trend. I noticed that the distance from the last level (67.75) was exactly the same of the distance from the start of this leg of the trend 63.50. So the first thing that came into my mind was mean reversion. Prices returned towards 67.75, but bounced and a HL formed, by then I was free of my CL obligations, so I Gave it a try and following the same logic as at the open Long was the way to go. But instead of trending the market made a LH so the long was scratched. But this LH did not turn into a trend so the next time the market made a HL the way to go was a reentry. The market rallied again and at the point where I was expecting my mean reversion theory to hold, it didnt . Then the market kept on climbing until it hit the next level 76.75 there I got a DT and a Poke below last swing low, but it was just a poke and prices returned to the trend. At the time of this post I am waiting for the trend to reach the next level at 87,25.... I will update this later, and see if I missed something.
Finally, 1,25 pts below my expected R I got a Trend break and a LH so I closed. All comments are welcome.
Prior Day High and RTH close noted ... I do not know this market well but I'd be bearish below the opening range high until the RTH close is tested and bullish above the RTH opening range high. But S/R is only part of the context. Price action is the other. I do not see how to trade one without considering the other.
Sell down from failure at prior high to the prior close - now what is needed is to wait either for a reversal set up to go long, or a coninuation set up to go (or stay) short Have a good week!
Hey NQ, couldn't be here during this week, thanks for the take on CL, this is what I see in hindsight. And none of this I saw in real time, although I got a profitable day on Monday. Very interesting how PDC demand was there but wasn't enough to take prices above 50% from the open before plunging towards the level marked by the green arrow line.