[NoviceTrader1]

P/L: -188.92
Account Balance: 3348.84

I didn't get a chance to trade yesterday as I was studying for a mid-term(fun times)...I have to take a mid-term in a couple hours and need to do a little last minute studying so I will make this log quick. I had a chance to trade for a few hours this morning, and It was a down day. I'm essentially flat on my account for the last two weeks.

I took 3 trades today, all three were losers, one I cut short and the other two I was stopped out. If you look at the trades, I entered an advanced order a tick above/below where I see S/R established. I usually enter a couple ticks away from S/R to make sure I don't get caught in any false breaks...this strategy would have kept me out of these trades. I am attaching 1 and 5 min charts of the individual trades.

My observation is that the consistency is the key for trading these markets, I have to trade my strategy and stick around for those days where price action is more tradeable. The ability to distinguish a day with choppy action, and one with established ranges and breaks is also key. I was only able to trade for 3 days this week, and 2 days last week. I will have to make a commitment to trading these markets day in and out and stay disciplined.

[james_gsx]

Have you considered taking your strategy and doing the exact opposite? I don't mean that in a rude way, just curious. Most of your entries are in such a place where theoretically they work, you'd get the breakout and limited risk. But in reality, those are usually false breakouts intended to get stops, and traders looking for easy money in a breakout. Hence why you see a few ticks go in your direction, then quickly reverse back into the triangle, or range.


I haven't done much day-trading in the last year, so someone please correct me if I'm wrong.

[brownsfan019]

There's no right or wrong answer. Some people trade breakouts, others trade reversals - some win and some lose with each method. There's very good breakout traders and very poor breakout traders; there's very good reversal traders and very poor reversal traders.

I personally hate trading breakouts for the reason gsx mentioned - you will encounter quite a few fakeouts UNLESS you can filter them to the point that you get in the reliable ones most of the time. Simply buying new highs and selling new lows is a losing game IMO but if you can filter out the bad ones, then it can easily work.

[bakrob99]

If you look at the large down candle to the left of your consolidation pattern... to me it suggests a rejection of higher prices as the selling was strong. Here's the tough part to realize: For the traders who shorted the top of that bar... they profited from the down move and when price gets back there they are going to do it again. I know that sounds simplistic but in my experience it is the simple logic that works. If it were the 3rd time - it would be more likely to be able to breakthrough ... but the 2nd is still most likely going to be faded.

In my experience... the best way to tarde breakouts is to pick a direction and be a (in this csase) buyer at the lowest price possible near the low channel and that allows you to scale at the breakout and then hold the rest without losing money if it pullsback. In other word, the best way to be a breakout trader is to enter before it breaks out on a pullback.

Oliver Velez has some webinars and educational recordings where he describe this technique. You can find them with a google search.

Good luck with your trading.

[NoviceTrader1]

Originally Posted by bakrob99 »

If you look at the large down candle to the left of your consolidation pattern... to me it suggests a rejection of higher prices as the selling was strong. Here's the tough part to realize: For the traders who shorted the top of that bar... they profited from the down move and when price gets back there they are going to do it again. I know that sounds simplistic but in my experience it is the simple logic that works. If it were the 3rd time - it would be more likely to be able to breakthrough ... but the 2nd is still most likely going to be faded.

In my experience... the best way to tarde breakouts is to pick a direction and be a (in this csase) buyer at the lowest price possible near the low channel and that allows you to scale at the breakout and then hold the rest without losing money if it pullsback. In other word, the best way to be a breakout trader is to enter before it breaks out on a pullback.

Oliver Velez has some webinars and educational recordings where he describe this technique. You can find them with a google search.

Good luck with your trading.

I appreciate your input, but this log is more for myself than anything. I am using it as a tool for commitment and a way to look at my mistakes. I am well aware as to how these markets trade, and I am continually refining my technique and my trading strategy. I trade breaks, and this is the strategy I will be trading as long as I see fit. If you have any suggestions as to how to differentiate between real and false breaks or S/R it would be appreciated, other than that thanks.

[emios]

Hey there...try looking at longer term S/R levels...on the daily for example, and then enter based on your criteria using a lower tf chart. The problem is that there is a lot of price manipulation at s/r levels, surges in volume can be due to algorithmic activity...this is what is causing the 'false breakouts' as they are called. Day trading has been difficult for me recently, and I realise that my personal breakout strategy is losing its effectiveness...it is very similar to yours by the looks of it. Part of the game is being willing to adapt to changing conditions. HFT is here to stay, and there is nothing that we can do to stop it, though no algo operator (was talking to one today in fact) is willing to take on a huge position, such as would be the required with longer tf s/r levels...the risk is too high for them. Hope I've been of some help!

Good luck with the trading mate!

[bakrob99]

Originally Posted by NoviceTrader1 »

If you have any suggestions as to how to differentiate between real and false breaks or S/R it would be appreciated...

I am sorry ... I thought it was obvious. When you see a big fat red candle like the one to the left in your chart, don't take the break until price gets through at least the majority or all of that red candle. It is controlling the price action.

[NoviceTrader1]

That bar is within the opening trading range, if you observe any soybean, wheat, or corn chart...you will notice that these "bars" don't usually play any meaningful roles as pivot points...especially on trend days.