Yes, there is certainly logic in your vision. And even in spite of the element of subjectivity, it all looks quite convincing. Unfortunately, this approach cannot be fully formalized, so that it would be possible to create a trading algorithm on its basis and check it on the quotes history. And psychologically it would be easier to trade when all actions are strictly regulated. How do you set objectives in trading with such an analysis? And do you limit losses? Or it all depends on the situation and your decisions on exiting a position are intuitive?
But you make a choice between a long position and a short position, don't you? That means you're predicting a rise or fall
There certainly is a degree of subjectivity to it, but I do have some rules which I adhere to, although I'll admit they are not written in stone. I think this can be both a weakness and a strength. If it was easily programmable - I think it would soon stop working. I guess there is both intuition and luck involved. Generally, I have a target in mind, but will always make sure I'm protected, so I will typically trail a stop behind price. 100% agree. I know some people insist they're just reacting/anticipating, but that reaction and resulting action is nothing else than a short-term prediction, i.e., price continuing higher from here or price reversing from here. I know some people are very persistent in saying they're not predicting anything, though. For me, I like to have a vision of what's going to happen and map out a scenario. If I didn't, it would be hard to sit in a retrace as I would be very uncertain if it was a retrace or an actual reversal.
Did you ever backtest your strategy ? or are you not aware of all your rules which then can be coded easily ? Any statistics you provide with your strategy ?