Susana, i would recommend you read a book by Joe Dinapoli (someone i respect a lot). He uses an approach similar to yours (looking to enter on pullbacks) using a well defined and simple method using Fibonacci levels. He uses the fib extension tool for targets, and most importantly, the method is easy to learn, back test, and forward test so you can get an idea pretty fast. heres a quick chart exemple. This is last friday on ER2. Consider the downswing AC. you then add a fib retracement between AC, then BC. If you get overlapping .618 and .382 levels from the 2 swings, or if they are very close to each other, its a fibonacci cluster. Dinapoli would want to enter short there since its a zone of strong resistance. look how it worked all day. yellow arrow indicate possible entry points according to his method. pm me if you want it. also if you want to translate what jack said up there into something intelligible, i can also provide you with a book on something called volume spread analysis, which is pretty much what Mr hersey is referring to. the study and correlation between volume and price. Here is a quick exemple.
I had thoughts on the topic a while back and did my best to make it clear what I think it takes a struggling trader to become profitable. I'm very profitable and what I said is the basis for my trading style. Start with my post here and read through the rest of the thread. Let me know if you have any questions. http://elitetrader.com/vb/showthread.php?s=&postid=1789150#post1789150 btw my second post isn't until pg 7 so if you want just skip ahead.
"It" is YOU Sorry to sound cryptic but really that's the only way to explain it. Work on your discipline.
Congrats on remaining active after three years - not many can make that claim! I found this guy on you tube here: http://youtube.com/user/SnP500Trader He teaches what to watch for - all I can tell you is since I started watching and practicing what he teaches, my trading as improved greatly! I've only been in this game part time for about the last 8 years - but in the last month or so since I found this guy, I no longer routinely buy the wrong pull back or sell the wrong spike - - -when I do, I'm out like greased lightning thanks to what I learned from watching his vids. Best to you!
http://www.elitetrader.com/vb/showthread.php?s=&threadid=38777 http://www.elitetrader.com/vb/showthread.php?threadid=83604
Thank you for all the suggested links, books, works and suggestions. I have been bombarded with information, I mean this in a good way. Many sent personal messages via private and the general consensus is that those who studied the writings of Dustin and Anekdoten took their trading to a new level so I will begin there along with a few suggested textbooks from famous writers. I want to thank everyone that has written helpful stuff those who did in the past and those who are doing so right now in order to lend a helping hand to a stranger. God bless you all, Susana
You have to give up everything you know about trading. Keep trading. You will get tired and exhausted. You will hate trading and hate it so much that you don't ever want to look at another chart or mention anything about trading to anyone. It will eventually lead you to give up trading and believe me, the day you give up will be the day you get it.
I have no idea about Anekdoten since I have never read a single of those posts (I doubt they are of any value to be honest), but what Dustin has suggested is solid place to start. nitro