Chuck, you have to have a perspective of recent price action (to the left of the chart). You have to be able to recognize some basic chart realities. Let's face it, this is just a trend following system, you need a trend to make it work. I looked at the chart of the trade quoted above. , from 9-23-08, look at your short bar (Blue circle arrow). Look to the left of the chart, Where have the buyers been coming in? During RTH, very popular to undercut previous buy point by one or two tics to clear stops and then rebound. Certainly expect first RTH test of support to try to reverse. Look at the bigger structure of the market. Look where the buyers were coming in consistently, time after time , right near 1206.50 (marked by diagonally striped rectangle). Believe me, I know it's easy to mark up a chart after the fact, but if you are going to be trying to use a trend following system, you have to have at least some chart pattern that suggests a trend might ensue. When price keeps attracting buyers at the same level, that is called support. You know this. If you have read AHG, you should be able to recognize this. You have to combine ability to read chart with this system. you were trying to trade this trend following system in a consolidation zone that had well defined support. If you have read Anek, you know, range-bound days are a killer for a system based on a trend. I have marked up the attached chart with some basic chart observations. Also, one of the things I think I read in that trading naked thing was that as the counter move runs out of momentum, you should see small range bars. (small range is indecision, without conviction) I hope this helps, and believe me, I know it's easy to see things on a chart AFTER the ink is already dry, but one thing, regardless of anything else, is that support is support until proven otherwise, and you can't deny the support that was at/near 1206.50
thanks vertigo have always found the support and resistance thing too subjective and more of an after the fact thing. hope to understand it someday though i read anekdoten's journal, but can't say i really mastered it, if you know what i mean. must look into the size of the bars. cheers, will reread your post later on
hmm not so good, i think i can better wait for a bigger pullback in the trend next time or a touch of the 2 MA's
was about to close the other contract because the MA's were sloping up when the 1200 stop got hit -2.25