I didn’t mean any short or long position, it was the other poster @triplicity that was suggesting potential trades. I apologize if my original post was too verbose, and I’m in chronic pain, on strong meds, plus English is my 2nd language. The main gist in my post was not about direction, but rather about being careful with focusing on just a line or just a pattern, and to rather first focus on trying to build a comprehensive “price story” based on your own personal, but consistent objective analysis. The reason behind checklist is that PA trading can be very subjective, and therefore you need to have some consistent “clarity”, because discipline is critical in PA trading, and discipline starts with clarity of knowing exactly what you should be doing and when. To become a good PA trader you need to have trust in your analysis, which I feel is very difficult without a clarity and consistency. Without clarity and consistency, people become anxious not so much for emotional reasons, but rather because they don’t fully trust in their PA skills. Regarding the short-term trade (bounce) against the trend, I don’t think I should comment because I have no idea what your trading style is, and therefore me and everyone else will see things differently. However, I think there are much better trades available in the market than the quick bounce that you’ve missed when you were asleep. If you want to experiment with bounces off levels, then perhaps you can check out the FX markets during the late US session when thing are quietening down, AND when the daily ATR is extended (NOT during the European session). But with equities, the bounces off levels don’t work as well. But I think you’re on the right track, just few tweaks and structured approach should help you with clarity and consistence.
This looks very interesting... Did you figure out a way to know if price will return after the breaks?
I’m not sure what you specifically mean. Either way, I never know anything about what the price will do next, it’s just that sometimes one scenario is more probable than another possible scenarios. If you mean price breaking some key level, then sometimes that can be followed by immediate retest of the level (applies more to FX), or there can a be “normal re-test of the level, or there can be just a pullback without retesting the broken level at all, or the price can just fall/rise even without providing an opportunity to hop onto the momentum/trend. Is there a way to figure out if the price will return? Nobody ever knows, however there are often clues such: is there nearby some supply /demand on the left side of the chart?, or how much the price was contracted and for how long before it broke the level (contracted volatility reverting to the mean), or how well defined the level was and it’s visibility on multiple timeframes . . . and few other things like that sometimes can give some clues of how, when, and where to the price is more likely to go. Basically what I mean is not to just focus on the pattern or level itself, but building a “price story” on what is happening around the pattern and around on other timeframes, and trying to figure out where clusters of orders are most likely going to be stacked, and basically try to see through the chart as through an X-ray in order to “discover” where the order flow is most likely going to be triggered from.
Thank you; ... a lot of knowledge there...! I just happen to notice the zone from your chart (mostly people post S&R lines) Price kept coming back, so... If you're talking about clusters, do you mean around H's & L's?
Not really, although sometimes that can be the case at Highs and Lows because that’s where most retail traders put their stops, but more often you’ll find stacked clusters of orders near horizontal levels, and not so much around swing Hs/Ls The clusters of order flow are usually in areas where the Buy-Stops of breakout traders' will be triggered and where the SL orders of those who were shorting will be triggerd simultaneously, and that creates a "breakout rush. (reverse for sells). The zones I draw are Supply/Demand zones, which is not the same concept as S/R. The explanation is beyond the scope of a short post, especially given my English is very verbose.
%% a] Assume its some trend I trade or invest in b] Assume I dont use all your lowest indicators,MACD.... + you are right o assume that LOL. c] Figure I like the long term trend, medium trend?? d] Figure its above 50day ma?? E] IF seasonals were favorable , could get in early. My current thinking is [US]SPY benchmark is down AUG month to date; so rather than buy early \take some profits off inverse[about the same as short profits] On a real strong trend , an early buy can work well....