[Kiwi]

Originally Posted by brownsfan019 »

Depends on what you decide is the confirmation. As a candle trader, I'm looking for some sort of bullish price action. Bearbull prefers hammers/inv hammers.

This is a good point brownsfan.

An interesting one for me because I am concerned that after this bottom we will get a dramatic reduction in market participation and return to the daily ranges (and maybe lower liquidity) of 2002/3 or earlier. In this case waiting for price confirmation may give up too much of the move (I like markets with a daily range of 60-100 points to give me profitable price action).

In this case we may need to anticipate reversal at the mas/s&r more rather than wait for price confirmation. I am thinking about scaling in strategies in case my preferred markets contract significantly. I found this to be the case with N225 up until the recent increase in volatility and suspect it is true whenever daily ranges drop into the 30-40 point range.
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[brownsfan019]

That's an excellent point Kiwi. Something I've been thinking about myself. If we assume that the ranges will contract, using the above mentioned system there seems to be a few options:

1) As Bo mentions, enter into trades assuming your S/R (in this case pullbacks to the 20 EMA) will hold.

2) Bring in your profit targets.

Good comment though Kiwi. Possibly could discuss in another thread if there's interest.

[firewalker]

Originally Posted by Kiwi »

An interesting one for me because I am concerned that after this bottom we will get a dramatic reduction in market participation and return to the daily ranges (and maybe lower liquidity) of 2002/3 or earlier. In this case waiting for price confirmation may give up too much of the move (I like markets with a daily range of 60-100 points to give me profitable price action).

It seems inevitably we'll return to lower levels than these... Let's just hope we don't get the extremely tight daily ranges that some markets experienced in February last year (for example ES daily range 8-10 points )

[daedalus]

Originally Posted by firewalker »

It seems inevitably we'll return to lower levels than these... Let's just hope we don't get the extremely tight daily ranges that some markets experienced in February last year (for example ES daily range 8-10 points )

Pssh... i remember trading a 4pt range in the ES during easter back in '07 I think... that was horrendous! I agree with you! I like the increased moves I just wish it would calm down just a bit.

Something akin to the movement we were seeing in May would be a nice happy medium in my book.

[bathrobe]

Great article, thanks for posting