I've noticed it too. There's a saying that goes "The second mouse gets the cheese". Anytime I see a place where there's a little bit of consolidation near a previous S/R, I wait. Why, because I see people getting short / long and then figure the MM's are going to tap the opposite side to catch a few weak ones before resuming trend. It is happening frequently of late. Be the second mouse. The first one has his neck broken in the trap, but the cheese is still there.
JFW, 2 LONG â I bot based on the double bottom at approximately 8:40 & 9:50. The bar I decided to buy on was a retrace from a previous long bar (2nd back). Stop was below the DB. 3RD LONG â I failed to recognize where I was in the larger picture. I was caught up in some s/r lines on my chart. Reversed direction shortly after.
Exactly, that's what I am talking about. Consider we are in an uptrend, and prices start pulling back, and then you get a bullish bar that makes a HH than the previous bar, so a lot of traders start going long again. Suddenly, prices turn back down and you get another bearish bar, but no down trend starts back up. It's just a one bar move back down again in most cases. Prices pull back just enough to take out all the stops on those that just got long, but then take off making another high. You might see this several times before prices actually start a solid up trend again. If you see the prvious low taken out by a tick or two, but then the uptrend starts, that's definitely stop hunting, but I think the other I described is stop hunting as well. They clean out all the early longs, and then they tempt others that are less seasoned to jump back in short, only to whip saw them all. Look at some charts and see how many times this happens lately. As most of you know, the best trades don't usually take any heat. You see the pull back ending, you jump on board, and off it goes. That just doesn't seem to happen much lately. It seems that it takes two or three tries to get on board now.
Yea, I think place you entry at the low end of the 3rd bar on 3br seems to be the safest bet, although you'll miss out on the run if it doesn't come back. But I think i'd rather be safe than sorry... Mccullek, how do you place your entries? Thanks JW
I normally place mine at the 50% level of bar 3, but if I miss that and bar 4 looks really strong, I sometimes take the magic tick on bar 4, again placing my limit order at or just above the 50% level of the previous bar, although it is much more risky. That's why I moved to the smaller tick chart for now, to reduce the size of my stops. I'm like you, I would rather miss a good trade than get sucked into a bad trade. If I take the second entry I described above, I'll usually cover quickly if prices don't take off right away. I'd also rather get a few ticks profit, BE or even a small loss, and miss a good trade, than to have a losing trade and take a full stop.
I was having trouble getting good fills today, ended up not placing many trades. I highlight one of them. 2 long trades today 1st â loser (bad trade) 2nd â winner
I try to work my real jobs schedule so that I can be available to trade most of the day, it doesnât always work out.