I agree. The repeat process was assumed, but you are right that it may be good to make it explicit ( for central limit theorem to show the edge or the lack of it). Your observation applies to all time frames.
Good posts Nodoji. Here is another question for you (and for others). Assume an uptrend in a day. If you measure the length of time between the high peak before the the PM breakout, how long is that period of time (roughly / on average if any)? If you were to look at the time when the bottom of the retreat took place, and measure the length of time between the first peak and the bottom time, is it 2/3 of the time (1/2time, etc) from the peak to the breakout time? Cannot say, it depends, are also valid answers to the above. However a typical stat to expect would be useful. One thing I like about breakouts is that it is fast money. You can make it, and leave in few minutes.
But most people's opinions do not matter in trading , so where does that leave us? Also to be a succesful trader you cannot have lots of posts here's why. It's simple, a deductive argument: 1. All profitable traders do not post more than 20x a day 2. If your a noob your likely more prone to spit out your opinion 3. 99% Of people lose money, so most people's opinions are not the holy grail 4. tradingjournals has over 20 posts a day, so he is not profitable 5. tj spits out his opinion a bit too often so he is a noob. Deductive arguments are generally evaluated in terms of their validity and soundness. An argument is valid if it is impossible both for its premises to be true and its conclusion to be false. An argument can be valid even though the premises are false. You make your own conclusions, sir.
NoDoji Care to offer a little more on how you trade breakouts? I tend to avoid them, as more often than not, they fail. Do you use tigher stops on them? set a smaller target? trail your stop? By the way. I enjoy your posts.
Its funny, I went to room where they were giving out money ie good setups for a free trial and explaining why they took the trade in terms most people could understand, plus they explained their risk management. What surprised me were how few people were there, which indicates the value people place on free like what is posted on ET. For example, if its free, it must be worth nothing. Whereas I saw many more people in a bad trading room who I will not name since they were a previous buyer of advertising and liked to fly planes, but who charged lots of money per month on trades that had risk of ruin, but seemed good since most were profitable. Trading is easy in that you can with a click of button buy or sell, but to have patience to wait for good setups, and use proper risk management, and not go on tilt, those things are hard. But hey I am not charging you for this perspective so its probably worthless information, and you should continue to carry on however you like.
Thank you. I only trade CL (crude oil) now, but used to trade AAPL breakouts (which behaved almost identically to CL). If it's a breakout of the high/low of the day, I enter either 1 tick inside the H/L or at the H/L because of the nature of CL. Something like e-minis or a momentum stock like AAPL, is safer to enter just outside the H/L, in other words, upon an actual break of the S/R price. With CL or anything else for that matter, if it's approaching a possible break of previous S/R or a previous bar high/low, but not an actual high/low of the day, I often place a stop order in advance so I don't miss the break and so I don't have the option of thinking about the trade. I have a minimum $200 profit target on my trades (except midday scalps), but will look for more on a breakout depending on the setup leading into it and the strength of the move. I now know, for example, that one strong breakout bar is more often than not followed by at least one more strong price bar in the same direction, and should target at least a further move equivalent to the first one. The breakouts that fail most often occur in the middle of the day or out of the midday ranges I described earlier. Don't jump the gun on those, wait for the last hour of the day to get in on volume.
Good Point TradingJournals. Often I will, even though it is against my basic system, enter a trade prior to a breakout, when I see what might have been, say a double or tripple top, that is developing a level of hesitancy. I may place an entry order just above that area in anticipation of a bo. Whay say you NoDoji?
That's what I meant by "If it's a breakout of the high/low of the day, I enter either 1 tick inside the H/L or at the H/L". I get a feel for the price action prior to the approach the the previous high/low and look to get in before the actual break itself, because CL is rude. The one time I waited till the last minute to place a sell stop at a low of the day, I got $80 slippage in a nanosecond. If a double, or triple top/bottom is already in place, the ceiling/floor is weakened and there will be a lot of stops in place from the DT/DB counter-trend traders to fuel the b/o far enough to let you lock out a loss even if it turns out to be a failed b/o.