Memorable simile! Learning to trade is much more fun than school for sure. Also, just wanted to let you know that this earlier post of yours has been very helpful to me. Quote from fortydraws: Here is my trading plan as it has developed, at least that part of the plan that most would be interested in, and in a nutshell to boot: 1) identify during premkt trading those levels of S/R that are likely to come into play duing the upcoming session. 2) Wait for price to reach one of those levels. a: If price indicates buying is present at S or selling is present at R, then enter long on a HL or short on a LH.. b: If price breaks through an S or R, then wait for a retrace back to test the former R as S, or S as R. Trade accordingly. 3) If at anytime I find myself with two stop outs in the same direction, stop trading and observe price until I am seeing price again, and not what I want to see.
FT Day 12 Sept 9 R: 3150 (High) R: 3146 (Tested R from ON) S: 3140 (Multiple tested S from ON TR. High VAP) S: 3136 (S from 8th, SL from 6th and top of TR from earlier. Low VAP) S: 3130 (SL from 6th and Very High VAP zone) S: 3125 (Bottom of TR from 5th. High VAP) Story 1: The lack of significant downside test since Friday close points towards strength. The tight ON range shows pressure building. A break over 46 will be a good indication of traders trying for the high of 50 and beyond. A break above 46 would alert me to a long Story 2: The slightly lower high of 46 from PM points to weakness. The loose hinge behavior from PM breaks down and traders take price down for a more substantial test of S at the 6th's SL level of 30. A break below 40 would alert me to a short. Review: Practiced patience by waiting for price to reach boundary levels. A lot of Range opps between 3148 and 3154. How can one position for these? Missed Opp: There was no ret on the short opp off the hinge at the top. However, since the hinge was occurring right at the R zone, an aggressive entry would have been justified. One way to enter here would be to place a stop below the DL and use the apex as safety. Risk would have been only 0.75. http://www.sierrachart.com/image.php?l=1378739605585.png
Depends on what you consider an op, and whether you're looking for them in hindsight or in real time. If one waited for the breakout through 46, the first ret was at 0933. That would take you all the way to 57. What one did at that point would depend on whether or not he uses s/d lines, and, if so, how. If he does, the dl was broken at 0940. The ret for a short is a minute later. The sl for that was broken at 0950. And so on. Granted one would make only a few points by following such rules, BUT HE WOULDN'T LOSE ANYTHING, which is largely the point of this simplified training-wheel approach. So going through the first 30 or 40m, what do you see minute by minute, swing by swing?
Game, in your chart you state that the hinge at R could warrant a short without the RET, is this something you have backtested? So far Hinges seem like very dangerous entry levels, at least for me. Nice entry at the open though.
The open thrust went to 47.25 and retraced to 46.50 on the 5s. Based on the prep, a long was entered. The first significant ret occurred at 0832. It barely crossed the mp zone, with buyers coming in again at this point. Then at 0833 the downward pressure continued with another test of the mp zone. There was no exit made here because of the significance placed on the break of the 50 level and the anticipation of continued momentum. Pace next slowed down at the 57 level and an exit was made on the rally succeeding the first selling wave. My next exit was planned if price crossed the SL of 3154. At 0839 price went past this level, but I gave it room. It came back up, but there was no significant buying pressure coming in. At this point, my long outlook started to deflate a bit and the exit was made as price crossed the SL level. I focused on using the mp zone as the next safety level. A short was not considered at 0841/0842 because this was new price territory and I did not have the confirmation of whether the Rev was occurring at an R level. At 0846 price bounced off the mp zone. But then at 0847 it bounced off the short term R level of 3154.25. I exited to become neutral. Price again bounced off mp zone. But this time I required it to cross the short term R level in order to consider the LOLR as being long. Once price broke this level, I got long on the 5s ret. Buying pressure came in but then quickly fizzled out for an exit.
I have not backtested the hinge pattern. But I have backtested S/R levels. The trade would be based on the S/R situation more than the pattern. The aggressiveness would be based on the view that pressure is building up at confirmed/tested R. Thus, any break of the hinge would not only be a move from immediate value area, but also from a longer term boundary level.
Not sure what is to be illustrated. The commentary is based on the chart posted with the review earlier today, showing entries, S/R, mp, etc. What would I be illustrating on the new chart?