It broke topside 507.2 on that huge gap and came back to test that level of 507.2 then found support right in that range. that was the buy on the retest. And look how stoxx50 was different than the other two charts I posted
so stoxx50 retraces less than aex? stoxx50 may not be good for your strategy but it is good for people who buy on the first breakout and later adjust their stop to breakeven.
If your talking about stoxx and buying on the breakout. There are a few major problems with that system. On this break you would of had terrible slippage. That was an instantaneous move. hence the gaps in aex and n100. Markets love to retest the breakout point. you would be major underwater just on the retest to the breakout. With that system you also surrender the advantage of comparing the volumes.
hey bearbelly. I have just noticed I have missed one of your questions earlier today. I'm looking on the 5yr,10yr,and 30yr rate indexes that is disseminated by cboe. I also watch the 10 yr future traded on cbot. They all are almost the same though just small differences in the personality of each instrument.
Its defined by price spread on the break, volume on the break, retest with anemic volume, and favorable rate situation. If you try to base it on how much time it was in the base you, how tight was the base you will struggle in my opinion.
what is price spread on the break? btw, do you know what is the ES margin requirement for professionals? i'm talking about the institutional guys.
People seem to have some interest in the analysis of interest rates. I will talk a little about my methods with this. Just because rates went up on the day it doesn't mean I can't be bullish or vice versa. I'm mostly looking for price rejection. To be bullish I want prices to reject higher rates and begin coming down a tad. Heres a real good example (attached chart) of what I was looking at yesterday which told me to only take the bull side of the market. Even before the big explosion of price at 10 am (15:00 gmt) there was a definite bias of rates coming down. This chart is of the bund future. It moves inverse to rates, price goes up rates go down. I don't pay for eurex fees so my data is pretty much rubbish. I have no volumes but price alone even from a garbage provider can still be of some use. But for through analysis its best to base decisions in my opinion from the 10yr on the cbot and not the mini, the real contract. I also like the CBOE rate indexes. Price spread on the break means a large spread between the open and the close of the candle(bar) that broke out. I dont keep up to date with all the margin requirements if they have no effect on me. I'm sure on the CME site you can find the minimum margin requirement for major market participants.
Here a classic example why rates are so so important you would have known to be only bullish on this chart setup. By using this filter you would have avoided a bad trade. Here is a classic break of a decent base and then a retest. They trapped the bears nicely on this one. Break out point is 994.20 Retest is 994.20 range