to follow up on your question and show you the mindset, here is an example of a possibility --- we have 1268.00 and 1270.00 as minor levels with 1273.00 as a major level to the upside going into mondays trading. if price trades up through 1268.00 and 1270.00 with new "responsive" buying then i would expect there to be a higher probability of a responsive buying rally up and through 1273.00 {after at least one bounce down that can be scalp traded at 1273.00 prior to a breakout above this level}. if i have my remaining 3/4ths swing trade position with a 1271.00 cost basis and i have 1268.00 and 1270.00 busted through with responsive buying, then the obvious trade plan choice would be to flatten at or below 1271.00. at this point i would be looking for one of two things -- first would be a breakout above 1273.00 {we would take that long in Billy's room on the breakout with responsive buying} or a rejection of this price level with any drop below 1268.00 on responsive selling as the trigger to re-enter the swing trade short. if it goes sideways after rejecting a 1273.00 breakout then i would just sit flat waiting for price movement to make my decision for me. so you can see here how crucial these levels are in the decision making process while managing the swing trade --- hope this gives you a better understanding of the process.
is this basically "countertrend" like that guy in the chatroom trades? or is this just "hoping on the temporary pullback"? once i define a resistance level, such as 1273, have you found that it normally goes to say 1273.75, or 1274.50, etc. and THEN pulls back to say 1272? or have you found that it doesn't go but 1 or 2 pips above the resistance? also, one more Q: have you found a way to backtest (automatically determine) S/R levels? It seems like such a manual process...
I am a novice, so please take my comment for what it's worth.. but as I read this, I can't help but think that this sounds very close to "hoping the market turns in your favor" ?? Or are you saying this "in" feeling is the advanced traders feeling out the "price action"? Elaborate...??
the scalp trade short off a price action move to 1273.00 would be a counter-trend scalp trade - yes. knowing that 1273.00 is a major s/r level then i may start my short entry scale-in at 1273.00 as all i am trying to do with the intra-day scalp at this level is catch a 1 point move {or bounce} off this level the first time price gets here. yes you can get probes for stops above the 1273.00 level {say 3 to 5 ticks above} but these usual happen with volume levels that do not show the proper sign of new responsive buying that would cause a true breakout. i will say it has become very apparent to me how price bounces at these s/r levels all the time, to the point of getting 1 point per trade. i just keep watching this happen day after day and the reason makes full sense to me as i have read about and now understand market profile. i have not done any backtesting of these levels and my live realtime trading with these levels has resulted in consecutive profitable weeks since i have started this.
hoping the market turns in your favor is for those who are buried in a position underwater with no plan. being "in" the market for what i am saying, is to have the capability to enter and manage positions that can result in the opportunity to have a trade in place "prior" to the main directional reversal. it is pre-positioning entries instead of post-positioning your trade entries.
MacroEvent, Your trading looks very smooth in spite of the adverse price movement. At what point do you take a loss and revert your bias?
I would reverse a portion of the position at any breakout of a major market profile s/r level if my position would go underwater more then 5 points at the breakout. i would then use the portion that i ride in the reversal, under new responsive buying, to negate any loss that i have at the breakout reversal price point. at this point i would not then re-enter the swing until i get price up to and just under the next major market profile s/r level. if price has a short term move after the breakout then returns and breaks back down through the level where i reversed, then i would re-enter again with responsive selling {breakout failure}.
I use interactive brokers... if I have SELL SHORT 10 contracts, I am at -10 lots. Let's say the market turns 5 points against me.. to reverse "a portion" of the position, I do not know how to.. If I enter a BUY of 5 contracts, it simply takes my cumulative position to -5. I am still losing money, just half as much, as the market continues against me. I would need to BUY 6 more (so I would then have +1) contracts to be able to make profit as the market turns upwards (against me).. effectively reversing my entire position.. what am I missing??
MacroEvent, it appears out teen trader, CoolWhip, the one who so rudely insulted your strategy has been whipping it around on a simulator. Unfortunately, he cannot even figure out how to enter the correct contract symbols. Let's have a look: coolweb Registered: Jan 2005 Posts: 770 12-05-05 12:29 PM [13:30] Shorts NQ @ 10856 [13:31] this server is poo [13:31] GOodMood: I think we are the only two on poo servers [13:32] this market is going down [13:32] who's going to sing silent night to him [13:35] GoodMood "Stille Nacht - Heilige Nacht"