ER2 Trading Strategy Question

[wsam29]

	Quote:	Soultrader
	Yea... I played a breakout on the YM today for the afternoon session which failed miserably. I ended up being the sucker who bought the high.

Hey now you can say you've picked the top!

I know I have, what a nice feeling to see it trade lower on you.

You can only laugh about it after its done.

[slableak]

Here is how you trade the trend lines on my previous post. You find a trend like on the ER2 this morning. Draw trend lines from the tops of the price bars. I use a jtHMA and when I see a slight pullback in the jtHMA I am ready to enter the trend. My entry is where the pink arrow is. Then my exit is when it breaks the continuation of that trend line. I had to draw 1 additional trend line to follow the trend. Sometimes these trends go for several points. I hope you can see my entry and exits on the second picture.

[GCB]

	Quote:
	Excellent walter. Thank you for this. Playing the pullback of the breakout seems to be the key here.

Either that or get in before the breakout if you see it forming. That's what I like to do sometimes, if I seen the reversal forming clearly and I feel strongly it's going to take place. That's what I did today and it worked.

[Soultrader]

slableak, youre charts are severely messed up. Perhaps you can fix that for us?

Speaking of getting in before breakouts, it is a setup I do enjoy taking. But I find it a little risky. You are buying the top or bottom of the range. You can either use an extremely wide stop or will get stopped out prematurely before the move. What I like to see is price hugging the upper range or lower range for 3-4 bars on a 233 tick chart on YM with buy/sell volume being equal. (using volume delta)

[GCB]

	Quote:	Soultrader
	Speaking of getting in before breakouts, it is a setup I do enjoy taking. But I find it a little risky. You are buying the top or bottom of the range. You can either use an extremely wide stop or will get stopped out prematurely before the move.

I think you can sometimes have enough time before the breakout happens to buy/sell the bottom/top of the pre-breakout range on up/down breakouts. This requires nerve and premonition, but is actually safe if you feel strongly about the breakout. It gets you some more ticks of profit and eliminates the noise factor in getting stopped out.