A very difficult morning for me to read despite a clear UWTL break and "M" top earlier this morning. I struggled to find a clear TL / TC that defined the downward trend. The nearest I could get was the blue TC shown. I also struggled as the 21EMA was hardly acknowledged by price. I added in the 252EMA (H1 21EMA) for extra clues.
Obviously after 3 legs up and an M top my bias was on the short side.
The first clear trade in my session came at...
1. TLOS short at least into the prior low (a scalp) would have been reasonable but the correct trade would have been to swing the short as the trend was down and the TLOS shows strength. However it would have been stopped out near BE. (1 : 0)
2. confused the issue as price made a "W" bottom
3. was a 21EMA RL short, but I would have struggled to takes this after the W however the TL had not been broken so the trend had not yet turned, so should have been traded. (1 : 0.7)
4. tested the H1 21EMA and made a 3rd bottom of sorts, it marked the end of two clear legs down from 1 , and three messy legs down from the "M" top, so was a at least a scalp long, if not a swing long. (1: 2)
I also looked at the EJ as it is highly correlated to the EU and often has cleaner setups and was once my preferred pair... it proved a much easier chart to read today... clear TL and respecting the 21EMA
1. 21EMA RL short (1 :2)
2. TCOS, test of 252EMA and 2 legs down = long scalp back into TL (1:1)
3. Right shoulder long (1 : 1)
Summary: It is an interesting day as I feel as though I should feel that I am cheating by switching pairs and adding an additional MA to my chart. I am certain that Brooks would condemn me for adding the additional MA but switching pairs i doubt he would have issue with as making money is paramount and finding the clearest action will help with this. But I must say that I don't feel particularly guilty for adding the 252EMA either. I understand that this is his method and it is not always going to fit with my psychology. TBH I think when in doubt adding a longerterm MA (at least for me) helps as it give me an idea of where price might retrace to. It seems logical that if price is drifting around, a return to mean will likely give it some clear direction.
Obviously after 3 legs up and an M top my bias was on the short side.
The first clear trade in my session came at...
1. TLOS short at least into the prior low (a scalp) would have been reasonable but the correct trade would have been to swing the short as the trend was down and the TLOS shows strength. However it would have been stopped out near BE. (1 : 0)
2. confused the issue as price made a "W" bottom
3. was a 21EMA RL short, but I would have struggled to takes this after the W however the TL had not been broken so the trend had not yet turned, so should have been traded. (1 : 0.7)
4. tested the H1 21EMA and made a 3rd bottom of sorts, it marked the end of two clear legs down from 1 , and three messy legs down from the "M" top, so was a at least a scalp long, if not a swing long. (1: 2)
I also looked at the EJ as it is highly correlated to the EU and often has cleaner setups and was once my preferred pair... it proved a much easier chart to read today... clear TL and respecting the 21EMA
1. 21EMA RL short (1 :2)
2. TCOS, test of 252EMA and 2 legs down = long scalp back into TL (1:1)
3. Right shoulder long (1 : 1)
Summary: It is an interesting day as I feel as though I should feel that I am cheating by switching pairs and adding an additional MA to my chart. I am certain that Brooks would condemn me for adding the additional MA but switching pairs i doubt he would have issue with as making money is paramount and finding the clearest action will help with this. But I must say that I don't feel particularly guilty for adding the 252EMA either. I understand that this is his method and it is not always going to fit with my psychology. TBH I think when in doubt adding a longerterm MA (at least for me) helps as it give me an idea of where price might retrace to. It seems logical that if price is drifting around, a return to mean will likely give it some clear direction.
Which brooks book does he mention ma's? I tried reading price action but found it very dry and lacking pictures.
ReplyDeleteI'm working through his first book "Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading)", he mentions MA's in this , well the 20EMA.
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