Friday 18 October 2013

181013 Mustn't forget that price action is most important

Struggled to read this morning's price action despite it being quite obvious.(Banging on about this but)I'm plowing through Al Brooks and I was trying to see everything I've read about, which resulted in me seeing nothing, haha.
Big Spike up this morning made me think the market was trending (which it was) and I had decided to put no more weight on D1 hi's and lo's over other S&R levels, which was an idea but probably not the best one. So a PB to D1 R was likely but in my head I was on about only trend trading as this is what I've been reading about most recently (coincidently this is not what Brooks says, as after a TL break he advocates fading as well as trend, my mistake). So kept picking any opportunity to get in with the trend resulting in lots of (potential) stops being hit. The fact current price action is most important.

The rest of the day I wrote up notes on the last two chapters I've read on TL , TC and trends.

So on second looks the clear trades were...
A. short stretch SS OE back into D1 R / 21EMA level (probably a 1:2 RRR, tracking the hi's of new lows)
B. Buy second entry PB at 21EMA as spike and PB quite dramatic so a 2nd entry had higher probability,( again a 1:2 RRR,  tracking lo's of new highs)
C. short the "M" back into 21EMA / UWTL (again a 1:2 RRR , tracking the highs of new lows)
D. Buy BD of UWTL avoid 1st entry at 21EMA for higher probability 2nd entry.  (probably a 1:2 RRR, tracking the hi's of new lows)


Note: sometimes trend PB don't get that far (ie to S) but a 3 bar drop is a setup that works pretty consistently despite not getting to an S area.

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