I agree on chart 2, it was an uptrend and I should not have sold unless I was absolutely sure this was a top. Therefore I waited... several bars formed around what was a resistance line the day before so that supported my hypothesis. Than I saw three (!) spikes on high volume ending below the line, for me that was triple confirmation... on what basis would you place a short entry? Any suggestions are very welcome, it doesn't matter if you're not a lifetime trader or relatively new to this "game", so am I.
This I find not really a very good argument, as I can give you examples where it does form a W-bottom or a double/triple bottom and than rallies up... I'm trying to find the key to identifying on which points it might go up hard and on which points it might fade up and then move further down... what kind of tools do you use (eg I don't use indicators)...
How about a short at 5653? Looks like a bounce off resistance. (I know it looks like after the fact but I have other things to do...)
No, second top on lower volume is usually viewed as sign of weakness. Definitely, nothing will tell exactly where to enter (and to exit). Try a different (longer) time frame additionally. You have to take into account time of day - during noon moves are much smaller - and impending news releases. 14:30 US GDP and 15:45 Univ of Michigan Sentiment Indicator. Usually, but not always, markets dry up before such releases. Though the last months, since being released on a subscriptions bases, the Michi does no longer seem to be a strong market mover.
I agree, I've noticed this also. Usually I stay away from the market because I don't want it to gap up/down in the wrong direction... Other times when the news has less impact, I enter at a zone or triangle. Do you actually trade FDAX too?
I meant "now" when I started writing the email, but I knew by the time I posted it would look bad. I decided to punch out of my hypothetical fly by the seat of my pants paper trade at a 5651 before the 8:30 news. Have a look at K200, it reacts very well to this sort of support/ resistance levels, not to mention that it trades like a hummingbird on cocaine
Ok, then I was right after all. I would have taken an entry there too. But with news coming up I expected price not to move around to much so I didn't take it. If you see the upmove at 8:30 (or 14:30 localtime) ... guess I'm lucky I stayed out...