jonbig04

I don't have a large chart to look at, but it sounds like those would be good things to consider. I'm not so sure about the "sharp rejection", after all, price was rejected sharply many times. The one thing I would use to say that a BO was more likely is to see how many times S/R is tested. In my mind, the more tests, the more likely a break. But even with those factors I personally wouldn't risk a chunk of my very large profit (keeping in mind that when we got to S, I would have already been at a 1:8 RR target) on the hopes of a breakout of what has been very strong support. Not when I can (or hopefully can haha) catch the breakout after it happens and have the best of both worlds, meaning the gain of of the S/R range and the breakout. I can see the logic behind it, and I'm not saying other people can't/don't make it work, but it's definitely not something I personally would be inclined to try especially when I'm sitting on a 1:7-1:9 R/R target. I'm not sure what would happen in the case of scaling. I would think that the vast majority of the time those scales would come back to BE. But maybe the couple times the BO did happen would make up for all the times it didn't.

I understand. And it sure would be nice to be short from the top of the range and catch a breakout of the bottom. But I think the practical application of it would be tough, simply because you don't know if the BO is going to happen. You would have to be prepared to give up a large chunk of your profit (because you would have to make room for a bounce, just like the one I highlighted above) for a situation that didn't pan out very often (because price usually doesn't break out).

The reason why I would exit a short at support is simple: price usually doesn't break out. And when it does it rarely just punches through the S/R, it bounces. Just look at the chart. Hindsight what you're saying make sense, but if you're actually in the trade you have to decide whether to exit or not. Is it a small bounce before a breakout? Is a reversal that's going to take out all my profit? For me (maybe it's because I'm a novice) those things are very difficult to read and decided when you are already sitting on a large winner. At what point do you say "OK this thing isn't going to break out."? Because I would be willing to bet that if you shorted the last high before the breakout (when price pierced 73.50 and wenr all the way near 74) and you decided to hold on to the short in case it did break out, that last 50 tick or so bounce would have definitely made you think that support had held again and price was on the way back up to your entry point, and you would have exited. IMHO, unless some crazy rapid breakout happens, you should always exit a short at major S especially when its a large winner. I don't think betting against S/R is good policy. I think that most recent chart of crude is pretty good evidence of that. Click for full size - Uploaded with plasq's Skitch

I did believe him, and I still do! Douglas ftw.

Awesome! I started my journal/log on day one and it really has helped keep me on track. I'm sure this thread will do the same for you. Best of luck and looking forward to following along. :beer:

I read The Disciplined Trader just before I jumped into trading. I think it helped me quite a bit.

Thanks for following along. I'm should clarify that I wasn't expecting it, I was preparing for it. I know that sounds like some cryptic splitting of hairs nonsense, but the reality is that I had no idea whether support was going to break down or not. I wanted it to because I figured if it did price would break out to the downside, but support is support. The only "call" I was trying to make was that IF support breaks, it may lead to a precipitous fall in price. If this was ES, I would have. If you look at some of my shorts from last week, especially the one at 1099 (that got taken out BE), that's exactly what I do. The only reason I didn't is because I'm not familiar enough with CL and it's swings. The S/R fade setup is separate from the breakout setup, and for now I only fade s/r on ES. I'm not exactly sure what you mean here. If I shorted at the top of the range (around 73.5) my gain would be limited to the S below at 72.4. Granted that's plenty of gain, but not as much as the breakout. Hopefully I can take that trade in the near future. If you mean that I could have shorted at the top and held on for the breakout, I would have to disagree. For example, lets say I short the 73.50 area. Things are going good and we reach the support at 72.4, now what? That support has held multiple times, I certainly wouldn't risk my 100 ticks on the mere hope of a breakdown. If I made that trade I would exit a few ticks above S and then re-enter when it broke down. Trailing your stop wouldn't have worked (when does it ever? ha) as you can see from the chart. Just before S broke it bounced a good 60 ticks. I'm sure that would wipe out any trails. I move to BE at around +5ES. To some that's quick, to others it's not quick enough. I want to make it clear that I do this because I am a wuss and don't like to see me +9's etc turn into a full stop loss. For me, it is absolutely not more profitable. It's a psychological feel good. Look at my BE trade from last week. Since I don't scale or trail, that one move to BE cost me 11ES. with a 1.5 stop. moving to BE will have to save me over 7 full stops just for me to be even again. But I do it fr myself and my mind and it's my rule that I follow. About moving to BE on the breakout trades, well I do that because as far as I'm concerned, price should be breaking out, not retesting your entry anyway. Hope I answered your questions!

Thanks BF. Feel kinda stupid screwing the executions up so badly. Better next time though. You've been telling us to look at crude for a while now! I'm glad I finally did.

It's been some time since the market spanked me like a little kid. Today was that day haha. So everyone knows I've been waiting for CL to breakout to the downside for the last few days. I have literally been dreaming about this trade. I've never traded crude, but I loved the setup so much that I decided to try for it full size and live. Anyway the breakout happened, just like I wanted it to and it was just as potentially lucrative as I thought it would be (damn I love the BO setups). I tried 3 times (one more than I allow myself) to get in on it, but I couldn't. Usually when I get in on a BO, I enter at market. Of course you are automatically behind by a few ticks when you do this, but thats ok because 1. you get to watch your position and if you aren't getting pushed into the green, price isn't really breaking out and you should exit, and 2. You get guaranteed fill which is good when price is really moving. Well those market orders screwed me today, and for some reason I had my chart setup to not plot my executions so I couldn't see what horrible fill I was getting. I was getting fill like 8 ticks from current price. Price was moving, but not fast enough and I kept closing the position, not realizing that it was my crappy fill that made the trade look so bad, not that price wasn't moving. I should have slowed down and held on to the short and I would have been fine. Gah. I'm a noob ass loser trader today lol. I ended up losing 15 ticks. It's not so bad considering my target was 100 ticks away and was easily reached by price, but it's annoying because I got burned simply because I was careless and wasn't familiar enough with the instrument I was trading. Lesson learned, thank you Mr. Market. What is encouraging is that the BO happened. It happened where I wanted it to, where I expected it to, and with all the fervor I expected. Just gotta work out my noob kinks haha. Click for full size - Uploaded with plasq's Skitch Kind of an annoying week. Got stopped just to BE on that ES short, stopped to the tick on that other short and owned myself in CL today. Haha, oh well all I can do is laugh. Kill it next week

Would you be concerned at all about the 67 area acting as R? I only ask because I personally will be looking for shorts around there.

There's no way to know if the S will hold or not, or really what will happen, but I'm willing to bet a whole lot that there is SOME kind of reaction when price meets 72.4 again. Heck, there's already been one: Click for full size - Uploaded with plasq's Skitch That area won't go down without a fight.

Got filled by a tick and then stopped out lol. Sim owned.

*This is a sim trade on CL* But I thought it was applicable. I can't load a 5 min chart for some reason, so I'm using bigger waves on a smaller chart. Click for full size - Uploaded with plasq's Skitch

Got some S/R drawn up on crude. I figure it's going to reverse here (which seems likely given the importance of the 72.44 area and the fact that its making higher highs now) or the down trend is going to continue via a break below the 72.4 area. Anyway my only play is the potential breakdown. Click for full size - Uploaded with plasq's Skitch

What a crazy level! haha I was gonna ask if any one could show me a larger time frame chart. Ninja keeps crashing every time I try to load one. I'm definitely going to be watching for a break below that one. I was a bit early on my sim short. I got in around 76.60, close though. If we get a nice BO below 72.44 I'm gonna go all in trying to catch it. Of course, I won't risk more than a couple ticks, but they'll be real money ticks haha. Thanks for the chart,

Wanted to get long ES today around 67. However I quickly realized that I had no entry. For some reason, I still wanted to be in though. Of course "wanting to be in" or not isn't a factor when it comes to entering a trade, so I stayed out. Good thing. Anyway I mentioned in the Real Time thread yesterday that I was watching for a downside breakout in crude below 76.70ish. When price broke below it, I took a sim short. It rebounded quickly though and I exited for -1 tick. Still when price did break below that area (76.50 turned out to be the real point), man did it breakout! Click for full size - Uploaded with plasq's Skitch There something else interesting too. When price trended down from 80.50 it stopped at 72.44 exactly. We then saw it rally up to 78ish where it ranged before breaking out to the downside today. After falling from 78 it stopped at 72.43 exactly. My question is this, we saw what happened when S broke down today. What happens if the S at 72.44 breaks down? (BTW you can disregard my little purple arrows on the chart. It was just be screwing around with market orders in sim) Click for full size - Uploaded with plasq's Skitch

Yeah it's one of those "to each their own" things. I do it solely for psychological reasons. I would be more profitable without it. Since my target would have been filled,inr order for BE to be worth it PnL wise, it will have to save me 7.33 times just to break me even. But I'm willing to live with it for the comfort it provided. I'm just a wuss lol.

Anyone considering longs on ES here? I'm not, the swings are too large for my taste, but 1067 has been a major level for months now. Click for full size - Uploaded with plasq's Skitch

BE playas' Click for full size - Uploaded with plasq's Skitch

I do it for the sake of a smoother equity curve. But I'm usually at around 1:7 R/R, meaning that if the move to BE costs me a full trade, it has to save me 6 or 7 more times to make up for it. Which it may in the long term.

Doesn't get more straightforward than that. I'm curious to see what happens below the 76.70 area. Looks like there may e nothing but air there, possible. Click for full size - Uploaded with plasq's Skitch

Click for full size - Uploaded with plasq's Skitch This is why I hate BE and trailing stops etc. Grrr.

Click for full size - Uploaded with plasq's Skitch Out BE. Sorry for the million arrows. I accidentally hit the buy button when I got back in at 4:30EST ha.

Actually I pushed the buy button today instead of the sell button. Of course my stop and targets are automatic (until I adjust them for the trade) so I knew something was off when they were upside down haha. Cost me a tick

Sorry guys, forgot to mark where my stop was and where I executed the sequence. Click for full size - Uploaded with plasq's Skitch