Praveensuri

I would like to add one more point to my earlier question regarding the setup. I have drawn support and resistance lines based on a 30 minute and a 5 minute chart from the prior swing which is counter to the current swing that is currently in progress. This is similar to the zones you have shown in one of your posts which you make prior to the next week trading. The problem is there are so many lines that ultimately come on the chart, that I hesistate to pull the trigger at a pre determined support and resistance zone, if above or below that is another support or resistance which is couple of points away. In other words let's say my buy zone is at 811 and the right candlestick pattern has been formed on the 2 minute chart., I will hesistate to take the trade if there is a reistance just 2 points away, lets say in this example at 813. Logic being why bother for 2 points and incur an equal amunt of risk. Obviously sometimes the price goes through this zone with a wide range bar and other times it fails and comes back to test the low, when I start sweating. So in this context I miss out and that is why right entry location at right price level within risk tolerencae is critical Many Thanks in advance for your help.

Steve, I have benefited a lot from your posts here. I hope you can help me in what I am going to ask you next. Before I ask my question, I will like to say that I have read various posts around the question I am going to ask, but have not read a satisfactory response in practical terms. So here goes: Background; I am a retail trader and have been trading for 3.5 years, I am currently at a stage where I have progressed from losses to breakeven. I day trade everyday, Russel 2000 futures My propensity to loose money on one contract is not more than $200. So essentially I am looking at a 2 point stop I can read the candlestick charts reasonably well in terms of various patterns at support and resistance My Struugle; I struggle to make a proper entry i.e I am unable to get a trade location. This is not to say that I am not able to determine the support and resistance areas...on the contrary I am able to find these zones with a fair bit of accuracy. However when the prices reaches this area I am only dependent on candlestick patterns to make an entry. I look at a 2 minute chart to find the right candlestick pattern so that I can get a good entry within my stop loss tolerance level. My Seup When the day opens I look at a 15 minute chart to assess in which direction the opening move will be. In other words if the the candles between 9 to 9.30 are indicating bearish set up, and are not yet at 15 minute support, I expect the prices to go down at the open. Next if the prices reaches my previously determined support zone, I will look for a buy entry, once the correct candlestick pattern forms on 2 minute I then look to exit the trade at the next resistance level on a 5 or a 15 minute chart. somewhere I read that you should have 3 time frame chartss( in my case I have 2/5 and 15 minutes) and if the candles in all three are pointing in the same direction then take the trade in that direction. My problem is if I wait for the 15 minute candle to complete the price has already moved away on the 2 min and 5 minute. I am struggling to find out what is the best way to enter a trade, in consonance with larger time frame and within my risk limits of 2 points can you ecmmend the proper trade set up Thanks for your help

Steve, Thank you very much for your prompt response. I really appreciate your giving personal time to educate people like me. For that I am grateful. Going back to the TF chart of today Friday, 17th June, here are some more points I noticed , based on which I am trying to draw some conclusions for Monday trading. Fisrt I noticed in the globex session before Friday RTH open, TF high was 789, 5 ticks short of yearly open. This price got rejected in the globex session and would be considered an area of supply. Second during the RTH demand came in at 774.2 at 3.15 pm eastern and the market closed at 777.79 4.15 pm close) , a point short of weekly open So this is what I expect: Globex open on Sunday evening the market may gap up and test the last week open at 778.8. The first supply level is 778.2. It may then probe down to test the area of demand at 774.2. If it does not find any sellers it will go up to the next area of supply which according to me is at 781.4 Depending on how the overnight session pans out, Professionals will position themselves for a buy or a sell below value area low at 775.6 or above value area high at 784.7. Since 784.7 is a long way to go from where it closed on Friday( assuming there is no overnight market changing news), it is likely that we may see the prices traing around 778 at open Am I thinking correctly? I will appreciate your comments and insights. Many Thanks

Steve I stumbled upon this thread recently and have been reading all the posts. I have not absorbed all of it as yet. Thank you for sharing your thoughts..it is wonderful. In one of your post you talk about the yearly/ monthly / weekly opens as benchmarks and the institutiosn wanting to defend those pivots. Today is a Friday 17th June 2011. I am looking Russell emini(TF). Week open was 778.8, Year open was 789.8 .High of the week was 792.9 and low of the week was 768.4. When the market opened today it opened at 785.9 and there was immediate selling by Paper( who are the institutions) and the local were buying and the price initially came down to 781.9 and then went up to 787 at 1.20 pm eastern it is trading at 777.10 so my question is; why will the institutions not the price up at the open beyond the year and the week open, if it is there motivation is to close higher than open. Second when the prices came down, why did they not step in to defend the week open at 778.8 and let the price drift down. The market ihas 3 more hours to go.. do the institutions only step in afternnong and move towrds the open Please advise