PO. no sure how to trade today... by the time I realize price stuck in consolidation, I am already down more than $100... Everything seems to signal bullish today. Only things that signal "the bullish trending is limited" is Stoch. on 60min chart stays in OS area most of the day and we are near the R level. If day like this can't be avoided, we should really work on " let winners run longer" to offset the lossing days...
Okay Grasshopper. Don't be discouraged. Let's do a day's end analysis. Time to pull another trick out of Boli's hat. There is something called... gosh it has many names... but I just call it a "2-stage run". It is a bullish/bearish run but will occur in 2 stages. Classical chart pattern: it's called "bull flag" or "bear flag". It is one of the measured moves. The trick is, of course, identifying the first leg. How do you know the first leg is a first leg but not an entire move in a range bound market? Well... that takes experience. That's what you are doing now... soaking up screen time to build up your experience. Remember Fib analysis? Observe that ES went quite a bit higher overnight. Very uncharacteristics of a follow up of a bearish move from yesterday. Looks like something happened in Europe. (You probably don't need to know the exact reason. Just that the market was moved up higher) To "kick the tire" of a move: Fib the low to high of the move. If it doesn't retrace more than 38%, the move is still bullish. If it is 23%-38%, it is very bullish. In many of these cases, the surge will come in a second leg for a measured move. First: Use fib to "measure" the move. Last night's retracement was barely 23%. Very bullish. Is there a good chance for a second move? Maybe... when the US market opens. Second: Use fib projection to project the 100% movement on the second leg. This is the target. After price has fulfilled the 100% projection after a 2-stage move, it is unlikely that it will go up much further without some kind of retracement. The bid for a "break out" above the 100% mark on the same day is likely to fail. On the other hand, because this is such as bullish day, (TRIN 0.6) a big drop is unlikely either.
Hi NoDoji, You must have read my mind. I missed the first 30 minutes and then I become comatose for the rest of the day trading aimlessly. When you say the midday mush, do you mean to avoid the lunchtime, say from 1200 to 1400 hour e.t.? How do you set buy/sell stops in advance? Do you mean anticipating an imminent breakout or do it way in advance like setting some stops during lunch time to anticipate late-day movements? Thanks a lot for your analysis and how to trade discretionary on a day like this. --po
Thanks Boli for the day's end analysis for a day like this. I am going to digest this further. I will pay attention to the o/n activities and include them into my trading plan for the day! --po
I usually avoid trading between 1200 and 1330. If there's narrow range consolidation on low volume, and you set buy/sell stops outside the breakout levels, you won't miss a move. On the other hand, there are often a lot of false breakouts before a real move gets on, so the downside is getting chopped to death unless you wait until the last hour to prepare for the break.
Thanks Matcha. I agree that we should work on "let winners run longer". Looking back at my worst PnL days, I seemed to always did pretty bad when trading in a narrow range. No matter how hard I try, I seemed to be whipsawed and got chopped into pieces I am glad that we can put this into perspective and have sifu and masters like Boli and NoDoji to give us advice on what to improve on. --po
Thanks a bunch NoDoji. I think I will take a lunch break during that time period between 1200 and 1330 e.t. if I see things start grinding to a halt or take a nap like what Matcha did sometimes. I think Matcha doesn't normally trade during the lunch doldrums hour also but I might be wrong to assume that. (Matcha, am I correct?) So you set both a buy and a sell stop order to cover both sides of the breakout? --po
Hi, Sifu! You are super! It's very clear to me now. Today's chart has similarity with 7/13's chart. The over night reaction is bullish. market open gaped up . then making it's second stage move. second impulse move. The third move will mostly like failed. Then do a FIB level and FIB extension to ge the 100% or 113% measured move. TRIN trade bullish all day long. The difference is 7/13 the pullback is more fluid, so it has more room to go up. Today when price finished it's 2nd stage move, and 3rd exhaustion move. it then spent most of the day just range bound.-bear flag. My mistakes today is keep thinking price is going to break out. You have pointed out that on 7/13. But today I didn't remember it at all!!!:eek: That's why hold position at 3rd move today to "hope it's going to the moon" is not working. Buying the breakout for sure is even a worse idea. I should have taken profits quickly on my first and 2nd trade. Then buy at the pull backs. At least I would have had a breakeven day! Now it makes sense that why Nodoji defined today is the classic "midday mush" day. I need to start to pay more attention to premarket and overnight move....
You are right , PO. I dont trade during lunch break. I get all positions out before 12:00EST... Sometimes I missed the move, most of time I avoid getting chopped out.