If I'm intra day trading ES micro e-mini futures using only price action on the 5 min to 15 min time frames, I like to use multi-time frame analysis, especially the higher Daily TF and see how its behaving. Assuming we are in an UPTREND on the Daily and then there is a Trend Line break on the Daily, what do fellow traders look for in order to believe that this downtrend may continue? So far I consider the size of the bear bar that broke the trendline? Also was there another strong follow thru bear bar after the breakout the next day and so on. But my question is how many follow thru bear bars should we consider (on the daily charts trend line break) before entry? I'm assuming we can't wait for too much follow thru, otherwise it could be a late entry and we potentially miss out on a trade opportunity? Taking into account false breakouts, follow thru bars and their size, lower TF confirmation of similar trend to higher TF, support/resistance levels, round #'s, magnets, what else could we consider in terms of technical/price action trading upon trendline break? Any insight on this? Thx
No way to know, you just have to guess. By the time "bear market" is confirmed in your mind, you'll be waaaayyy late along with almost everybody else. KISS, baby!
Have you considered using a prime number for at least one of your tf's so that very few people are following same tf ( especially if you offset start time by a little).( with the exception of 1 and 5 min bars)
I don’t trade daily TF but I would be looking at 4 things to help me determine if the trend down after the break of the bull trendline, will continue down or is it just a PB momentarily, i.e. a pause that will likely be followed by a resumption of the previous bull trend. 1) The steepness of the trend up. Tight and narrow. Adds odds that the bull trend will continue and we will not see a reversal into a downtrend but instead that the reversal attempt is simply caused by profit taking by previous bulls and is just a PB tgat will tesult in a resumption of the bull trend. 2) I draw in a 50% PB line of the original bull trend ..top to bottom. If the present trendline break goes below 50% odds favor going price is into a bear trend. If 70% then I consider we are in a bear trend now and will exit any longs I have, double up in size and short. 3) I look at the size of the previous PB’s in the original bull move. Are they small in depth? Are they 2 or3 bars or 5 or more? How many attempts are made in each one to resume the bull trend before it successfully resumed? If previous PB’s are small and shallow and few bars then it is likely the present PB attempt will not be a reversal of the trend but simply a pause, followed by a resumption, or a move into a trading range behavior if the present PB is getting deep and close to the 50% line. 4) I look at the individual bars in the present PB. Are they consecutive bear bars? Increasing in size? Or is the PB bear then bull then bear then doji…etc If they are consecutive bear bars with little to no two-sided trading, gaps between low of present bar and low of previous bar, bars are increasing in size, getting to or beyond 50% PB of original trend, then odds are favoring a reversal it taking place. But if there is quite abit of two sided trading in the PB and price getting close to 50% line then odds favor price is going into a TR of sorts and not a resumption of the original bull trend.
As an aside Volp, I was watching the ES today and thought to myself "Man, I bet Volpri is laughing himself giddy with today's price action." Nice small ranging day where your techniques would shine with less risk than those larger-ranging days..
--- Excellent points. hx. Going to pay attention to point #3 more (size of previous PB). Previous price action and how it behaved can help.
Trying to get one of my accounts straightened out on commissions. The clearing was bought out my another clearing firm and somebody really screwed up on commission charges big time and they are fixing it one customer at a time. As concerns larger ranging days I would trade looking to swing 1 or more legs within the range (6 to 10 points). In such an environment I would look at averaging down usually if price is near outer edge. It could be a big loss doing so in the middle of a larger broader range, unless just doing quickly on price probes and scalping 1 to 2 points. But I do like small range days. As well as trending days.
Today's price action is scalpers dream as I did over 100 rt's, trending is just ok for me my averages drops approx 3 points an hour compared to chop. I briefly look at dailies, check for pivot lows/highs on hourly, but since I am out in three bars and less, daily less important for me. Thirty years ago I used multiple envelopes and labeled each as far as speed of price so sharp trending market means less pullbacks, and more gentler trends required farther pullbacks, don't use them much any more as seen so many years of them, knows where I should get in.
The main price action to look for is a full candle is formed under a diagonal trend line if you are looking for a bearish break. Also, this is more significant in higher time frames. Follow through action could be price returns to the trend line but can not push through and again falls back down. Finally, you could look for LH's and LL's forming to confirm a trend reversal. Obviously sometimes you can get screwed and it's a false break so you need to kill the trade and resume trading in the original direction of the trend. If you killed a trade a couple of times, I would actually stop watching the charts and just let some time pass and then open the charts again to see how price is trending so you don't keep getting stopped out. Also, except for a few people on ET, I would not recommend trading full time since it's close to impossible to make money every day.