I got back from looking for a primary fuel filter for the motorhome. RTHs almost over. I decided to take one more trade. Shorted 2cs @ 5752.25Exit at 5747.75 for 4.5 points per contract. Notice The successful BO out of bottom of top TR on bar 12:20. Successful because no price went back up into TR and gaps (green rectangle) held from BO point (bottom of TR) to high of every bar. Plus, bulls cannot push it back up through EMA. Followed by the give-up bar for bulls signifying a likely MM (measured move down). Then price goes into another evolving lower TR. So, "market cycle". BO of bottom of top TR down to another...TR... So, I short 2 contracts in lower TR near top 1/4 of that TR betting I will see a move down to capture a few points more. I got 4.5 points more. Now notice the previous BO of the bottom of the top TR (bars 11:30 to 12:00) that happened before this last BO that had the MM down. Within 5 bars almost at the bottom of the TR again and on the 6th bar (the 12:00 bar) back into the TR. Do you see why this 5-bar rule can be a good one to follow? Of course, I was not here when that happened, but it was also a good averaging down opportunity outside the TR bottom. By the time I got back we were in that bottom TR around 15 bars into that bottom TR. Bottom line 6 trades all profitable overall. Captured 28.5 points in what many would call chop or noise. A scalper must maintain a high win rate and use techniques that suit the market cycle where he is placing his trades. At least that is how I do it. I also take what the market gives me because when I get greedy, I get burnt. No shame in winning! Can you see from today's posts that trading TRs can be lucrative? Again, I am showing how I trade and not telling anyone in particular to trade this way. But I hope it is informative and good information. For information purposes only!
We leave Oklahoma tomorrow if all goes as planned. I went looking for an extra primary fuel filter to have with me as I don't like traveling in the Motorhome without one. I just changed it on this trip but like to carry an extra one. Get some bad diesel and one can be stranded on the side of the road or even in the road. I can change it in about 15 minutes if I have one with me. No filter near me so I will have to buy one on the road near Wichita Falls Texas. We plan to go to Arkansas via Texas. If we end up leaving tomorrow, I doubt I will get any trading in as I will be busy driving as my dear wife doesn't drive the motorhome. If she would I could trade racing down the road.
That was what I did today paper trading QQQ. Whipsaws up and down and caught all the wrong moves ended up with a big loss. Did finally catch that one big BO on your chart that actually covered all the losses and then some. May be I should hunt for BO from the opposite ends of the TR?
You should post your chart with your trades. Sounds like you need some rules for a BO. How to identify a successful BO
Dear Volri, Right before the give up bear bar, there is 02 bull bars, 01 with tail and 01 with end near its top. Just for study, why we shouldn't enter a buy order in the second bull bar? Because when we trade live, it could be a bull trap and I certainty that I would step right in to it.
First of all I want to qualify that all my trades are all on TOS Sim. Nowadays I tried to follow your methodology. Yesterday I went back to my old way, hunting for BO, low win rate but high R:R, to compare: BO after TR was established @ $485. 4 entries, first 3 stopped out. Found BO on the 4th try and exited near the bottom. Overall a profitable day on Sim. First entry, short, around 11:10. It sounded easy but in real time as price unfolds it is not, and the low win rate is quite often very depressing. Bottom line: Your method is easier on my stomach.
Left Oklahoma yesterday, went into Texas then Arkansas. It was hot in Oklahoma but cool in Arkansas. Got here bushed but still enough daylight to get the Motorhome setup. What we are dealing with in trading is probabilities. That concept could even be widen to POSSIBILITIES. We can determine, for instance, that a movement probably, OR LIKELY, can expand or contract x amount over x timeframe. A very slight edge in determining this can render huge impact. Have you ever been a part of or watched two lanes of traffic merging into one? There is a fascinating phenomonen that goes on. If two cars are poised to go next the one with the slightest edge is the one that will almost always end up going ahead. This slightest edge becomes the DETERMINING point. Have you ever observed two people walking toward each other and it is clear unless one of them changes course they will collide? Realizing this they both move to avert the collision. Suddenly, one moves to the left and the other moves to their right. For a split second when the first one moved the collision was averted but now it is back to a collision course after the second one changes direction. So they both move again; the first one moves to their right and the second one to their left. They find themselves still back on collision. Finally, one cedes, they both smile or laugh as one maintains the course and allows the other to make their move. Thus a collision is avoided. Napoleon once said that in a battle there comes a slight moment when things could go either way. And the outcome of that small moment becomes decisive to the outcome of the whole.
There are bull and bear traps. Linda Raschke many years ago said “the best indicator of price is price itself.” I would add the word inertia. Inertia of prices. Markets can but rarely turn on a dime. They tend to resist change. This concept is what can make trading TRs and bull/bear channels lucrative by trading them with a variety of techniques, one technique being fading the BOs. When they successfully change direction and do so with with or without momentum it becomes clearer which side is winning the bears or the bulls. Therefore, for myself I like to see follow-thru of a move, even on a momentum move before deciding on which position I will take, bull or bear. That is I let price itself forge the path. Yes, winning is psychologically easier. Clear thinking gets muddled by several losses in a row and can lead to revenge trading or just plain guessing. However, there are some traders who don’t get frustrated with smaller multiple losses and for them it can be a viable strategy. As a scalper it is not my cup of tea. I just prefer grabbing what the market gives me as it gives it to me and I don’t have appreciation for the market taking my money even if it is just nickle and dimes in a thousand paper cuts wait for a stroke of good luck to render me a good move. My idea is too nickel and dime the market while I wait for a good move and when it happens I usually won’t hold till the end of the move but instead will again nickel and dime THAT PARTICULAR MOVE with multiple entries and exits on intra-move PBs which allow me to compound my profits even if transaction costs get bigger. It is a tradeoff. I like winning, I like grabbing profits. I like FOT (frequency of trades..I think I coined that lol). I like compounding even at the cost of higher transaction expense. I had rather make 20 points on multiple trades than 20 points on one trade for more than one reason but one reason is the potential compounding effect.
That and because it is basically a PB on an evolving two legged bear intraday swing trade (mm). The BO has already been confirmed by PA (see the green gaps section with subsequent move down.) If anything I would be shorting that bar and averaging down if I already had a position. There is no sign it is a reversal. At least not yet up to that point. Price indicates more move down, not up, if one carefully considers the last 15 bars to the left.
MES 5-minute chart 10-9-2024 First two trades. First video is first trade live but no sound as again my computer had the mic off while my recording software had it on! Second video will explain trades.