I struggle with rather or not to take 2nd chance breakouts after a retrace once 1st breakout occurred. For now, i will take it and record it in my stats. But technically I can not put any logic behind that type of second breakout in the picture attachment.
Sorry for the confusion. Ignore the EMAs, they are not apart of my rules or system. They are only there for future visual and ideas.
my system :
Identify with my eyes. if price going doing, trend down, look for breakout below support. Vice versa for longs breakouts.
My second arrow is where I get into trouble, as you see I went short, but the price was actually moving upwards as you detailed in your picture. However, the breakout you took, I would have not taken cause there is another resistance right above it. See attachment.
If full a bar (open, close, low) is below support, enter 1-5 ticks from the support that broke.
If full a bar (open, close, high) is above resistance, enter 1-5 ticks from the resistance that broke.
stop loss 2 points
Exit 4 - 6 pts, depends on the next target.
I have been thinking about your recommendations of collecting data per trade based on leg 1, retracement, and final swing end. I understand the reason for collecting data on final swing end, but not sure I understand the logic or reasoning for knowing the retracement after leg 1.
Earlier in thread the question of stops came up and someone (Tymberline?) correctly mentioned that trailing stops don't work out that well in practice.
Where do you place your stop?
when and where to adjust it? and
should you exit with a stop or a trade?
After studying many, many, charts (and given my goals for a trade) I have decided to move my to BE once I am 5 points to the good and exit with a trade (not a stop).
So if you SHORT it goes
-11, +6.25, -8
and you used a trail 5 once you are at BE the retracement would take out your trail 5 (as 6.26 is >5).
You would only get 6 points of the 11 pts first leg and then be out of the trade altogether.
So knowing what the retracement is is important.
Alternatively, if your system is such that you CAR at minus 11 and reverse from short to long and then CAR at +6.25 to catch the -8 leg, you need to know the 6.25.
Everything depends upon YOUR method - so the ideas are for mine.
If you haven't already, I suggest you do the sample videos on strategy analyzer and then try a simple strategy -doesn't matter what - just to get and idea of working with it.
(For example, I don't know how you are going to test your resistance entries)
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Please note I am not recommending, or not not recommending, that you back test just responding to what you have posted. Others on the board are better able to guide you than I.
Good trading to everyone.
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