This week I have been a bit tied up and initially decided to watch rather than trade. This lead to lots of observations which predictably started to contradict each other and to the following thought...
Ultimately I don't know and will never know which setup is going to work. But I can improve my odds by trading levels where lots of other trades will be doing a similar things. IE shorting at convergences of R like a horizontal or diagonal level and a downward trending 20EMA... It also stands to reason that should this trade get stopped out, a lot of other traders will be being stopped out in similar levels too. So getting long in this influx of buy/cover orders should be a fairly safe and logical play.
On the chart side I've seen every possible variation on a setup work in every type of chart action. But for me and my nerves I prefer...
1. predominately orderly candles (only a few hi waves)
2. A clear Trendline, failing that a clear trend
3. trending MA's 8/20
4. Buying with trend (8/20) on orderly tests of the 20EMA and a level of S. Selling with trend on orderly tests at the 20EMA and a level of R. And reversing the position should either trade get stopped out to capitalize on other traders covering too.
GU Trade..
Ultimately I don't know and will never know which setup is going to work. But I can improve my odds by trading levels where lots of other trades will be doing a similar things. IE shorting at convergences of R like a horizontal or diagonal level and a downward trending 20EMA... It also stands to reason that should this trade get stopped out, a lot of other traders will be being stopped out in similar levels too. So getting long in this influx of buy/cover orders should be a fairly safe and logical play.
On the chart side I've seen every possible variation on a setup work in every type of chart action. But for me and my nerves I prefer...
1. predominately orderly candles (only a few hi waves)
2. A clear Trendline, failing that a clear trend
3. trending MA's 8/20
4. Buying with trend (8/20) on orderly tests of the 20EMA and a level of S. Selling with trend on orderly tests at the 20EMA and a level of R. And reversing the position should either trade get stopped out to capitalize on other traders covering too.
GU Trade..
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