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Hoping to get some advice on my price action reading


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Hoping to get some advice on my price action reading

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  #1 (permalink)
Rockledge, FL
 
Experience: Advanced
Platform: Sierra Chart
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So I feel like I'm starting to get the hang of it, and now that I am getting a feel of what to look for, my learning is accelerating. So before I get too confident, I wanted to take a step back, and get some input from an outside perspective.

The one minute chart doesn't always look this clean, so sometimes I bump up to the 2 or 3 minute chart to cut through the noise, but always looking to take entries from the one minute. I use a 5, 15, and 1 hour chart for perspective.

Trying to determine good target levels. The last couple weeks don't seem to bring much more than 30 points for the whole move from swing high to swing low. But I have read, and am now seeing that targets the size of each box make sense. So was thinking maybe 2 contracts, one target size of the consolidation box, and let the other one run. I enjoy managing the trade through the consolidation points, but I know I am not squeezing out as much as I could by selling when the trend fails. I probably just answered my own questions, but would love some feedback.


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  #3 (permalink)
Winnipeg, MB , Canada
 
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The strategy and the idea looks good but keep in mind that markets only trend roughly 30 percent of the time. Breakouts are most effective during those times or else you will get chopped up ( in my experience). If your trading personality likes to take 2-10 trades a day you can either master breakouts with multiple products (not easy) or you can learn how the market reacts to opens closes high's and lows. Then you can make strategies that can be used everyday in any market condition.

If markets trended 100 percent of the time we would all be rich at this game. The problem beginners have with learning trading is they ''vision'' trending markets 100 percent of the time. I am not saying this towards you or your post but just in my own experiences. It may help you look at the markets a different way. My personal biggest hurdle was understanding that. Now i trade reaction to zones rather flowing with a trend.

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  #4 (permalink)
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Thanks for the reply. I most definitely understand what you are saying, and my focus lately has been geared towards understanding market structure, and identifying when we are trending vs. not. I am a breakout trader by heart, and so I am slowly trying to unwind my biased expectations toward the market, and focus on becoming a much more well rounded trader.

I do watch for reaction around the overnight high/low, as I know we must clear those hurdles to have a "breakout"/trending day, and I also watch volume accumulation throughout the day to see areas that are being accepted or rejected, and whether that is moving higher, lower, or stationary. Any other input you could add to this would be greatly appreciated.

I have seen the kind of trading you speak of, with identifying key levels in the market and trading around them, and I think even if I never traded that way, that knowledge would be indispensable. Am currently watching the webinars from @FuturesTrader71, and he has helped expand my knowledge of volume profile, and watching important market levels.

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  #5 (permalink)
Winnipeg, MB , Canada
 
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Ok thats great, your definitely on the right track with understanding FT71's material. I have some tips for breakout trading i came across in my studys. TPO charts (I feel) are a must. That is the best way to map out targets. It also greatly helps by noticing when the overnight market is in a coil and is ready for a break out.
To be honest i felt like i was a breakout trader at heart too. It psychologically feels better to be a trend trader, but like i mentioned that was my biggest hurdle in trading. Not doing what feels right but what makes money. ( I blew 2 accounts momentum trend trading) So i stopped completely . It seems relatively easy but its very difficult.

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  #6 (permalink)
Rockledge, FL
 
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Lately we have been moving overnight, and consolidating during the day. So it has forced me to look at my strategy in a different light, since I went a whole week without a single good trade.

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  #7 (permalink)
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Can you help me with my thought process here? It took me too long to come up with these conclusions, obviously due to lack of experience. I guess I now realize I should have been asking myself questions as we got to these different levels, and had a plan for execution if it did what I thought it might do. Am I on the right track?

Here are some of my notes, and the marked up chart. I try to mark the chart as I go, so I am not biased.

So the truth is that nothing about this day makes sense to me, and it's frustrating. I was thinking earlier that the day seemed to want to go higher, and that the end of the day that S1 would probably have looked like the obvious area to buy. But that doesn't do much for me. It took me way too long to realize that, instead of having a nice trend day, that the opening range had been set, and I knew volume sucked, but I guess I was hopeful. Hope doesn't cut it, volume does lol.

The thing that is killing me the most I think, is that I was just starting to get into a nice groove of profitability as the holiday season was approaching. From what I understand this is normal market behavior, and I am trying to force something that isn't there. I need to be patient, observe, and keep my finger off the trigger, or else I am going to whittle down my account.

But I guess these are all decent observations. At 10:30 we were back below the ONH, and volume was crap. That rally had sold off pretty hard, and while it didn't break too much support, chances were that even a re-test of the highs were pretty slim, much less than besting that level. When we failed to break the ONH for the second time, I should have known sellers would step in more aggressively there to test market strength. Then once the market created a nice supporting trend-line, failed to break down, and gave me a nice reversal right above the S1 pivot to take a shot at a long.

Need to find out how often we fail at the ONH then the ONL is tested.


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  #8 (permalink)
Winnipeg, MB , Canada
 
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This might make a little more sense of how to view the market if you have TPO profile charts with the platform you use.

-You can identify choppy volume zones, session high's and lows, potential targets, overnight sessions sentiment.



I have the profiles split in 2 time periods in ''central Chicago time''

8:30- 16:59 = (black background)

17:00 - 8:29:59 (grey background)

The 8:30 session today started at the night sessions upper distribution zone. (bullish sentiment) Then ran up to a strong rejection area and is now building the confidence to make a leg up higher.The market is simply a auction that is looking for the path of least resistance.

The reason why it didn't break threw today was because it already had a nice run up of 80 ticks and that's about average for the 8:30- 17:00 session lately.

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  #9 (permalink)
Rockledge, FL
 
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Yea I do really like that you can get a lot of info at a quick glance. I don't think my software does provide it, so I will have to check into an outside source. Thanks again for the help.

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  #10 (permalink)
Rockledge, FL
 
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I am starting to grasp why the advanced guys say that rather than watching price action bar by bar, that it is more like level to level. And why the pros are selling their positions to the momentum chasers......and why that momentum chasing works sometimes, but trading from one support/resistance level to the next makes much more sense. And over time is obviously much more profitable.

Would you say there is one area that you generally try to build a core position for the day, and trade from there? Because in the indices, they obviously trend higher the majority of the time, so looking for a potential LOD to trade from makes sense.
Also saw that prior day's low(and I'm assuming high) comes in to play when the market is in balance, and an inside day.

Let me know what you think. For some reason my chart doesn't save the volume profile, so I have started to note volume levels on my price chart for reference.


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