[thalestrader]

Originally Posted by forrestang »

Thales,

Do you think you can do a pre-day analysis? I'm not sure how you do it, or if you can get to it today.

I would suggest NQ, but I suppose any instrument would do fine? I'm just wondering if you prepare for things in a similiar fashion as I do, i.e. picking out S/R, or something else?

And actually, if anyone does anything simiiliar posting it would be great!!

Forrest

Hi Forrest,

I'll be posting more once we get out of July. This is typically a month where my trading activity is greatly curtailed as I have family come in from out of state.

I hope you and imorgan (and hopefully others as well) will continue to contribute.

Also, as I am primarily a stock trader who trades stocks that have gapped open, I do not know the night before which stocks I will be trading the next day. So, while I scroll through the charts of the SP500 each night, I am not really doing the analysis such as you are doing with the NQ.

What I ave been doing lately is going over forex charts with my dauhter at night. These lend themselves much more to the type of analysis you are interested in, so I will try to post a forex chart here and there when something of interest presents itself. Otherwise, once I am back "full throttle," which will be after Labor Day, I will again post real time intraday charts/trades.

Best Wishes,

Thales

[thalestrader]

Originally Posted by thalestrader »

had I thought to take that short entry, I think I'd have entered it exactly like you did, and I would likely still be short from approx 133.84, with a stop loss up around 134.5x, and a profit target around 133.5x. ... Perhaps a secondary target would be down in the vicinity of 133.00 ...By the way, based on the chart, I do think that EURJPY will see 133.5x before it revisits the 134.7x high, so if I were to be in either of your two trades, I'd rather be in the short than the long.

Hi imorgan,

I didn't want to say much more yesterday, as I did not know whether youwere in a live trade or a demo trade, and I always like to avoid voicing an opinion contrary to another trader's current position while he is still in that position.

As I said yesterday with respect to your short entry, I thought you did do the right thing there. That certainly constituted for me a break down of what should have been support. That is why I asked you where your stop was and how you decided to get long. It looked to me like a panic move, i.e. "Oh my goodness I sold it short and its not going down so its going to go up so let me stop and reverse." If you are going to trade S/R, you can do it one of two ways:

1) You can buy support and sell resistance, looking for price to reverse at these levels, or

2) You can sell breaks of support and buy breaks of resistance, lookng for price to continue beyond these former stopping points.

You can, of course, trade both ways, which I imagine would make ofr a third way. My own preference, of course, is to trade S/R breaks for immediate trend continuations. Others prefer to trade S/R holds for immediate trend reversals (this means the trend that brought price to the S/R level, not the larger trend, of which, in this case, the "immediate trend" being reversed is but a pullback or reaction against a larger trend).

If you are going to trade breaks, then you need to determine how you are going to place your bet, and then you need to place your stop loss where, if price reaches it, the probabilities will have turned against price moving in your favor. Yesterday, your stop loss was placed smack dab in the middle of nowhere. If you sell a break of support, your stop loss must be placed above resistance, and vice versa for longs.

What you experienced yesterday is one of the two reasons that people sometimes say such silly things as "most breakouts are fakeouts." Untrue. Most breaks of support lead to a retest of a lower support level, and most breaks of resistance lead to a retest of higher levels of resistance. The problem is that sometimes a break up or a break down will do some further chipping away at S/R and add a bit more fuel before the move to the next level gets underway. When you exited the short and reversed to long, you became fuel for the move down. It is always nice when a break results in a real smash or lift off and price moves like lightening to the next anticipated level. But you need to be aware that sometimes price has a different itinerary than your desires. It will get to where it is going when it is ready, not when you are.

The good news is that you can identify these levels on your chart ahead of time. Once that level broke at which you sold short, then price was almost determined to head down to 1.3347-3350. It was just a matter of you having the patience to set your stop and sit on your hands. (Again, I would highly recomend anyone interested in learning S/R read over DbPhonix's posts, especially his recent posts in his "Trading with Forsight" thread).

The other reason people say that "most breakouts are fakeouts" is, of course, that they have mistakenly identified a minor wiggle in the middle of nowhere for a break of support or resistance. I think you identified a real support level, and you did the right thing by selling it. Next you need to work on letting the market develop as it will to deliver either your profit or your loss, and then move on to the next opportunity. This takes times, but you have made an excellent start.

Best Wishes,


Thales

[forrestang]

Was going to post a right edge but entered and stopped so fast I couldn't get it up here.

Anyways, was playing the level @ 1539.75, it looks as though this level has been violated, and price is hanging out in the middle of nowhere. Entered 1540.50, stopped 1538.75. Will continue to look.

Update 1:
Broke through 1539.75, next level to test is 1528 area.

Update 2:
Price broke through the 1539.75 level, towards the 1527 area. Price did not quite make it down that far, and is now retracing back upwards to 1539 area. Posting a small thumbnail just for depiction of what I'm seeing. Maybe this will be insight into the thought process trying to view the larger picture of what's going on? Putting this together into something tangible is a whole nutha' issue. Note: vertical line is about where we opened.



Update 3:
Still watching this area. Either this area I have isn't valid, I have recognized it wrong, or it's just one of those areas, but price either isn't respecting it, or this area is just not optimal for trading? I will stop until price moves away from here, i would probably get bleed to death trying.

[forrestang]

Update 4:
Looking for BO.

[forrestang]

Update 5:
This is it, we'll see how it plays out, conservative targets in place, will move stop when available. Seems this entry is too high, close to the midpoint of this range. But whatever.


Update 6:


Update 7:
1st target hit. I th ink right now I would be thinking about pulling all out, or at very least TIGHTLY trailing the rest. We're approaching DTL in what I am just now realizing is a downward trending day, I am a dufus! But for the sake of the thread, will leave it alone, stop at BE.

[forrestang]

Final:
Profit factor on day nothing to write home about. And looking at it and where S/R is, these entries are just God Awful. That post about entries is needed!!!


A note on the anchor chart.
The upper region of rectangle, or resistance was adjusted after the first failed long.

[Dinerotrader]

I can't believe I missed this one. Got to my computer just a few minutes too late.

[forrestang]

Originally Posted by imorgan »

I can't believe I missed this one. Got to my computer just a few minutes too late.

Can you describe what you're trading?

Was that green line the open of yesterday, and you were shorting the breakout once price had broken through it?