thalestrader

I can only imagine that it is my present condition of lack of sleep and abundance of stress, but I am going to try once more to fight this decline with a long. If I lose on this one, I will be negative on the day on the ES (right now I am slightly ahead +6.25/+6.25/-3.5/-4) and I won't touch it again until tomorrow. Best Wishes, Thales

ES is now stalling at the aforementioned 32.50-28.50 support.

Stopped out - 3.5/-4. And will await a clear opportunity. Today was unusual in that rather than hold my short from the break of the first 5 minute low, I stopped and reversed at what I had anticipated to be support. As a general rule, I do not fade gap opens (and yes, I do believe that gaps are real and important). I do poorly whenever I try to fight the day's trend. A lesson I find myself needing to learn and re-learn over and over again. Best Wishes, Thales

You know what they say, "if you don't bet, you can't win." And this is followed by, "If you lose all your chips, you can't bet." So stop loss is in place and it is up to the market. Best Wishes, Thales

A somewhat better entry would be a buy stop at 40.25 if 36.75 holds. Best Wishes, Thales

Looks great, Brownie! Thank you for sharing and keep them coming. What this thread should help folks se is that price does trace out patterns that repeat across markets and across timeframes. Your 10 year note chart displays a long opportunity that is very similar that presented on the GBPUSD/6B two nights ago and posted here in this thread and reproduced here below. Best Wishes, Thales

I'm not convinced that ES won't attempt to hammer out a low of day right around here, but should this level fail to hold then the next support I would be looking at is shown is this chart. An aggressive long entry would be a buy stop at 39.75. For anyone trading Taylor, this is a Buy Day, which means we should anticipate a decline into support that will enable one to position oneself long into a subsequent rally. Best Wishes, Thales

Hi Folks, I'll be watching how price acts right here for clues on ES. If price holds above the represented support zone and manages a rally back above yesterday's low, I would anticipate a rally that may exceed yesterday's high. Targets 53.25, 60, 65.75. Best Wishes, Thales

Hi Folks, This would have been either a -15 tick loss or a break even trade at best. I have placed an explanation on the chart. Best Wishes, Thales

Hi Folks, A last look at the GBPUSD before bed. A short at 1.5940 with a target of 1.5850 and a 1.5981 stop loss looks good to me. Best Wishes, Thales

Hi Forrest, First of all, your charts are much improved - much easier to see what you are looking at with this color scheme. While the EURUSD and GBPUSD had larger rallies, I do not know if it is right to characterize the rallies on the EURJPY (approx +48 ticks from BO to rally high) and the GBPJPY (approx +45 ticks from BO to rally high) being failed BO's. Each broke through a near term resistance point and each rallied into an observable zone of resistance. Not every breakout is going to run for 100+ ticks or more. One thing I would like to clarify is this: When I say that one needs to cut one's losses and let one's profits run, I do not mean that you should let your profits run into a loss. If price moves +40 or more ticks from your entry, by all means move your stop to capture some of that profit! You see, there is a difference between the trader who moves his or her stop loss to, say, +7 ticks after price has moved to +20, and the trader who hurriedly exits out at market with a +7 tick profit because price has slipped 5 ticks after having made an inital +12 tick move on the breakout. For example, I shorted the 6B today 1.6020. Price dropped to 1.6006, and then bounced to 1.6017, and then declined again, but held above 1.6006. I moved my stop to breakeven, and I was stopped out at breakeven. Price rallied to 1.6046 and then weakened. I again sold short at 1.6005. As price declined in my favor, I continually moved my stop down, trailing the market by 10-15 ticks. If you look at a 1 minute chart of the 6B, you should be able to figure out how and why I allowed myself to get stopped out at 1.5955. The low of the session was 1.5941, and after I was stopped out, I do not believe price traded lower than 1.5952. What's my point? My point is that you need to let your profits run. But, you need to keep your profits as well. You do not want to be the trader who gets scared and markets out with a handful of ticks at best. But you also do not want to be the trader who catches a breakout and watches it run 100 ticks without pause and then watches as it runs to a 20 tick loss waiting for price to catch itself and provide a natural stopping point. Now, how to trail a stop so as to keep the trade alive while not giving up more open trade equity than you have to is not something that I can easily describe. If I catch a big move off the breakout, I will usually drop down to a 1 minute chart to manage the trade. I also use the one minute chart if the trade does not act as I anticipated. I had a short trade on the 6E a week or so ago where I was stopped in at I think 1.4472, and price halted its decline at about 1.4468. I then watched as price very clearly, distinctly, and smoothly traced out a little rally high to 1.4476 and then declined to 1.4471, where it paused, and pasued, and paused, dancing around 1.4471-4473. Guess where my stop went? It went from about a -40 tick stop to a -5 tick stop at 1.4477, where I was stopped out. As it happens, rather than breakdown or break up, the 6E instead traded in a 40-50 tick range until well into the next day. Was that a "failed" breakout? I guess it was as close to a failure to act as anticipated as I have ever experienced absent some external news-driven catalyst. However, identified properly, most break outs will see price travel to at least the next logical S/R level before reversing back through the break out point. Knowing this, manage your trades and trail your stops accordingly. Best Wishes, Thales

If I were that good I'd still be long instead of being flat. Best Wishes, Thales

What I left unsaid was this: When price coils into a tight range after a substantial move, it is either preparing to continue the move or reverse it. Price will not sit still for long, as someone is right and someone else is trapped. Do not be distracted by the triangle as it is mere coincidence. The proximity of S/R and the behavior of price at that level is what crates the opportunity. Best Wishes, Thales

If it weren't so obvious, it would seem like magic. Best Wishes, Thales

I had not seen your post, but yes, I took that trade as well (6B not the GBPUSD spot). Short entry was 1.6005 and I was stopped out at 1.5956. As far as the ES, price was coiling at a prior low after the large range impulse decline from the open. I had an order to go short and an order to go long. I entered a bit earlier than I would normally enter because I could do so with an extremely tight stop (we had a potential higher low, so my stop was a tick below there and gave the trade a better R/R profile that had I waited for the break of the dotted blue line. Best Wishes, Thales

Does this represent a 2B short opportunity? I don't know, but I suspect that Sperandeo would say yes. I am long, with profit on 1/2 filled at 49, stop on remaining position is 46. I do not trade this type of 2B, if this is such a situation. Best Wishes, Thales

There's 49 ... and now looking 53.25 Best Wishes, Thales

No need for you to make a decision ... just place your orders and let the market decide ... I'm looking for 49 and 53quarter from 44.75 entry Best Wishes, Thales

Hi Folks, Quick look at the ES ... decision time here as well. Best Wishes, Thales

Yen futures have made a decision - bouncing from a support zone here. It's almost opening bell ... I'll be busy the next 30-60 minutes. Best Wishes, Thales

I do not know if that is a 2B or not, Taq. Part of the problem is I do not know the time frame and I am not seeing as much of the preceding price action as I would like. Also, the 2B was brought up by Forrest, and while I am familar with the term, I do not profess to be expert in either identifying or trading 2B's. Yesterday, Forrest asked if the patten I was pointing to was a 2B, and I simply acknowledged that strictly speaking, the double bottom pattern would indeed be an instance of the 2B. Here is a passage taken directly from Victor Sperandeo, and I'd suggest that if you are interested, you read the relevant chapters from his two books. I am not comfortable pretending to know any more about his 2B approach than I have already stated (I would not want to lead anyone astray from a correct understanding). From Trader Vic 1: Principles of Professional Speculation: 2B, OR NOT 2B? THAT'S WORTH SOME MONEY! As mentioned in number 2 of the principles of a change of trend, sometimes the test of the previous high (or low) may actually break the previous high (or low) and then fail. Although this is really a special case of a test, when it occurs it usually signals a change of trend. In other words, this one observation, considered alone, has the greatest potential for catching the exact highs or lows; it carries more weight in terms of probability than any single one of the other three criteria for a change of trend. It has so much weight that it almost merits being called a rule: The 213 Rule In an uptrend, if a higher high is made but fails to carry through, and then prices drop below the previous high, then the trend is apt to reverse. The converse is true for downtrends. This observation applies in any of the three trends; short-term. intermediateterm, or long-term (see Figures 7.11. 7.12, and 7.13). A 213 on a minor high or low will usually occur within one day or less of the time the high or low is made. For 2B's on intermediate highs or lows preceding a correction, the new high or low point will usually break within three to five days. At major market turning points, long-term 2B's, the new high or low will usually break within seven to ten days. In the stock market, after the new high is made, the failure to carry forward usually occurs on low to normal volume, and the confirmation of reversal occurs on higher volume. When trading on the 2B criterion, it is essential that you admit defeat quickly if the trade moves against you. For example, if you are day-trading and you short the market on a 2B and then the market rallies to new highs again, you should immediately close your position when prices break past the new 2B high. If they fail again, then you can short again, but you must limit your losses and let yourself get whipped out. As long as you take only small losses, you'll "stay at the table" and be able to keep trying. When day-trading, the 2B criterion may be right only 50°70 of the time, but if you limit losses when you're wrong and let your profits run when you're right, you'll make a lot of money trading on this basis. The probabilities of success using the 2B in the intermediate term are much higher.

Hi Folks, Yen futures 6J waiting for decision time ... Best Wishes, Thales

Hi Folks, Here is a screen capture updating the GBPUSD charts posted in post #374. Again, use price action around S/R levels to identify trade opportunities (in this case, highs, lows, higher highs, higher lows), and then use S/R as a map to guide your management of the trade. Price is its own leading indicator, and it is the only indicator that will reveal where it is likely heading. Best Wishes, Thales

Are you sure? You do realize that the double bottoms in the charts I posted represented long trade opportunities, and they are not "failed" short trades reversed to long trades. Best Wishes, Thales

There are instances where a short trade taken on a break to a new low reverses, and becomes instead a double bottom, in which case the double bottom's buy point is also the short trade's stop loss, and so becomes a stop and reverse situation. However, more often is the case where the first low of the double bottom represents a test of the upper boundary of a zone of support, and the second low is merely a probe or poke lower into that support, but not a break of support. Also, these probes lower often come in threes, so if one sees a decline losing momentum, with each probe lower preceded by price action that seems more to drift sideways to lower, rather than impulsing lower, then shorting breaks would be lower probability trades. Best Wishes, Thales