A poor low/poor high (synonymous with a weak or unsecured high or low) is simply an auction that was ended because of, in this case, buying exhaustion (as opposed to a quick counter reaction brought in by responsive selling). The idea is, because of the lack of counter reaction at the high, it is much more likely that buyers will test that area in the near future. Sellers likely won't have the conviction to drive price much lower after a poor high as well (because they don't know if there is any business to be done above that high).
A strong/secured high is the exact opposite. It is a high that is formed because of a strong counter-reaction (we can witness the counter reaction in the forms of excess.. buying/selling tails).
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OK, so today was a sim trading day to get my feet wet with ironing out this trading plan.
It felt really nice to have the plan there.
There were no problems, or things I found I needed to add, to the plan in today's session. I thought something would come up. I'm kind of worried that nothing did... surely the plan is not totally ironed out yet?
Edit: I did find 2 potential things to add to the trading plan. They're listed in the writeup for trades 5 and 6.
The market did not meet my expectations for how it behaved today with my pre-market plan, every first attempt at a trade location was a loser, and none of my runners actually ran. Yet, I ended up down less than what i'm willing to risk on a single trade for the day.
THAT IS A WINNING DAY MY FRIENDS.
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Trades 1 and 2 as well as 3 and 4 were short attempts off the levels i mentioned pre-market. Initial entries were too early, but re-entries were perfectly timed. Discretionary partial exits turned out to be scary good, and the runner portions did not run. This is ok, there will be days where my "feel" exits look way early, and the runners really run.
Trades 5 and 6 were attempts to get long in what appeared to be a real opportunity for this market to trend. Actually, there was a thing I considered adding to my trading plan here... two things actually. 1) These trades were small pullbacks in "open space" with no levels to lean off of. 2) They were longs right in the face of a large confluence of things at a level (could be serious resistance) and it was. The reason I took the trade anyways, is because I am now having this mental shift in how I see things based on these "poor highs" Taking a long at 10AM on this chart is something I never would have done before because we are "at the highs" and an area that sellers have defended several times. Evidently my thinking on that has been wrong. So, now go forward to the longs I'm taking for trades 5 and 6, I decided to ignore my better judgement that there was "resistance" at the highs there, and go for the continuation move higher. I guess in hindsight there was actually no PRIOR day resistance at the first area, but there was PRIOR DAY resistance (and several confluent things) at the second area. Ok, long winded, but I'm saying maybe I can add points 1 and 2 in this paragraph to the trading plan for entry criteria? Not sure yet.
Trades 6 and 7 were much more PLANNED out trades. I announced the trade idea and location here on futures.io (formerly BMT) well before we traded down to the area as an expectation. For these pullback trades, there were actually levels I was leaning off of, not just taking trades in open space. On par with the rest of the day, the first trade was early and stopped out, and the second trade was much better timing. Also, the "feel" exit was superior to the more manual exit that was trailed behind mini swing lows until taken out.
Trade #, "feel exit", more "manual" exit
1) -1.75 both parts
2) +3.75, BE
3) -0.75 both parts
4) +2.5, -2.0
5) BE both parts
6) -1.5 both parts
7) -2.0 both parts
8) +3.25, +2.25
Last edited by indextrader7; April 19th, 2013 at 04:14 PM.
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