How do you set a profit target. How do you place your stops. These are the most important things to trading. Just want some ideas to help other traders with the same questions. How do you stay in a trending market with out pulling out early and watch it shoot right past you making tons of profits. Big one right here!
My number one mistake is not waiting for a retest on the chart to determine real direction at entry. The big question is what is the best time frame to use retest to make this determination. Im using a 3000 tick chart on the ES and 233 on the GBP/JPY. After it retest what do you look? S/R area Pivots Trendlines Break of these points? Small time frames have to much noise what do you think!
Where you have the least amount of risk. E.g., Look at a daily chart of SPY. The last low is the same as the previous low made on huge volume when Europe and Asia were crashing. This is support. Look at the reaction high after the huge selloff in late January. Where did we stop on the way up the next time? Is the market trending up or down right now? This is resistance. These are two of the thousands of technical ways that people look for edges all day. You can also look for a breakout or breakdown and take the other side. It does not really matter as much as knowing what you can possibly lose and where you will get out.
Concern yourself only with stops.. Basically your stop should go where it is most likely to be defended by others since you cant to stay in th position. If you can't place the stop there, wait for a chance to buy so you can put the stop "there" or reduce the position until the loss the stop will incur is acceptable.
identify your reason for being in it...intra-day scalp or position trade ? your reason gives you the entry point, if your reason is a pattern or whatever, if that fails then you should get out. depending on projected length of your trade - based on target and ave price swings, etc - your stop loss could be dollars away or pennies and same with your target exit.
#1 Support & Resistance levels: First thing to do is draw in the potential S&R levels. This is your preparation work. Without it, you are clueless about what is happening in the market! It's not an exact price, but more an approximate level. Identify the areas where buyers or sellers gained or re-gained control. I can only partly agree to trendlines. Depending on the influence above support or below resistance, trends that have developed during the course of time are going to break anyway. But I fully agree that a trend break attracts even more traders to participate. #2 Reactions: Once you know where the S&R is, watch how price reacts at those levels. Do not blindly buy or sell into it but instead observe it closely. If price is visibly moving down below resistance you have your short entry, or up from support for a long entry. #3 Stops: Stops are placed right after entry, above the recent high at resistance (in a short position) or below the recent low at support (in a long position). And gradually adjusted after a pullback. #4 Targets: See #2.
What market should you watch if your trading the ES! $ADV ? To enter a trade to give you a trend indicator. TRAS
There is a group of stocks you must watch to determine the direction of the SP, $adv work well but at open it is all over the map that is a problem. Nasdaq has there group of stocks. Watch other indexes>>>> can give you a possible direction. You alway like a confirmation to enter a trade. Keep it as simple as possible. Other possible: bond gold usd Dollar