For a RET to happen there has to be a BO or reversal first. BO -> then RET REV -> then RET This further implies BO out of something, and a REV at somewhere. These are the potential s/r levels that cease to be potential and become real at the edge of the trading range. Gringo
Ok, but then again. What was that at the open, and how can one deal with it. I mean, if the short at 9:00 was taken, I cant think of any reason to stay in after what happens at the open. There are sure reentries, but to stay in all the way to S is harder to consider for me.
If one shorted at 0900, I can see exiting at the open if one is nervous about the trade. But once it makes a double top at 42 (0935), that's a pretty clear short. Consider also that buyers had two shots at getting past 45 and couldn't succeed at either. They then had two shots at getting past 42 and couldn't succeed at either. That doesn't scream long to me.
Yes, in RT i thought about the LH below 45 at 9:38 as a reentry opp, but then I also thought that it could just turn into chop. My chart attached. By the way, great day. I hope all of those trading this are thinking about changing their ferraris.
Niko, I don't think your thinking is faulty. Perhaps just not as quick as Db's is. When we were in chat today, I also waited for 36 to break before accepting down move was underway. 40 for me although was clear as a place to go short but previous bounce from 36 had me also wondering whether it was a possible trading range. Keep in mind I don't trade intra-day so my preparation wasn't there to be so alert to seize every turn. For me it's to keep the mind in better shape by engaging in reading price at a faster rate in real time. EOD trading take quite a long time before a new set up shows up and the mind needs something to do. Your risk tolerance may be a factor in waiting for more confirmation. Not everyone's built the same. The short bias was there for me as I mentioned in the chat. It was because I look at QQQ daily and price had reached the top of TR. Since price had already moved I assumed there was greater chance of price taking a breather. The inability of price to go up got me ready to short but I couldn't shake the possiblity TR or chop quickly enough to benefit from the short at 40. One could have just taken the entry with close stop as well. Gringo
It's not so much quick thinking as it is, as Gringo says, the level of confirmation one needs. And needing confirmation is not necessarily a bad thing. But there is literally a price to pay. In this case, we are/were at the top of a long-standing trading range and came within just a few points of it. Given the four failures to get there and the strain visible at 0936 (one didn't need to be watching a T&S display to see that sellers were having trouble finding anyone to meet their price), a short seemed most logical. And even if it didn't work, what was the potential loss? A few ticks? And don't anticipate chop to the point of not entering a legitimate trade. You'll know chop once you're in it. Till then, take the ops that present themselves.
Hi Db, Here's a quote from you: Those who trade stocks understand that price need not fall in order to find support. Price can also move sideways until support catches up to it, as in this case. Given how futures move, this is generally not an issue What does this really mean? If price moving sideways isn't the support being created below whatever range the stock's trading in? The reason it's not falling is that demand is there or supply is weak. I am unable to understand this statement of support catching up to it. Gringo