My best trades seem to be when I allow the market action to dictate my entry as opposed to pre-defined entry points. I am wondering if some of you consistently profitable traders can shed some light on work has worked best for you. I feel as if I am only supposed to enter at pre-defined prices, but that hasn't worked well for me. I always have my levels that I watch the price action, but I only actually enter when the market has shown strength or weakness. I feel that I have read that pre-defined levels is the "right way", but that hasn't been true for me. Thank you.
Initially I would define major levels of S/R pre-market but then would trade the intraday price action as it develops. So if an S/R level developed during the day, I would trade off of that. I was happy with that for a long time but in recent months the way I think of markets has made a steady move towards concentrating on the bigger picture and caring very little for every little ebb and flow intraday.
Now, all my levels of interest are defined pre-market and I really don't care about any levels that are developed intraday. The reason for this is that after a year of full time trading, staring at the market all day long I have come to the belief that the vast majority of intraday activity is pure noise. It is the result of multiple time frames interacting with each other with an untold number of objectives, risk, perceptions of value, etc. Drilling down to smaller timeframes and trying to make sense (and force your will) on intraday price action is futile for most.
So now I focus on areas of interest and simply wait for the market to reach them. I will then pay closer attention to how the market behaves at those areas. If the market doesn't reach an area of interest in a particular day, then I dont trade. Oh well. Next.
Just my opinion. A million ways to skin a cat. You'll need to decide what works for you,....and that may change over time.
You donít trade the markets; you only trade your beliefs about the markets.
- Van K Tharp
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I think this thread is worth resurrecting. I assume we'e talking futures here.
Marking the high and low of the pre-market session to ascertain support and resistance lines for the regular session seems to be useful. I haven't traded on his basis yet but plan to. During regular hours, price often breaks these levels, closes outside them, and then returns to close back inside. It is as price wants to return within the levels of the pre- market session. Entering on the first candle to close back within your lines of S.R seems profitable as it usually continues on its current trajectory further into the range. Sometime it'll take a while after congesting, sometimes it will shoot straight back into it.
I don't know if this is what pros do...but it's new to me. I like the idea that it is pretty mechanical and discretion based on the vagaries of evolving price profile during RTH is not required.