Busy Day Tomorrow

[Busy Day Tomorrow]

And all it takes to more or less master that is time. It would certainly help to have access to some of the tools that Milliard, Anna, Art, Buk and the others have access to for better analyzing the rigidity of the various zones, but we can more or less determine that ourselves through a close examination of the candles that print at those levels, and more particularly how price reacts when it reaches those levels.

 

Here's a good example of a drill-down for an early entry at that zone that Anna-Maria noted back in this thread. It's a near-real-time example of how I've played it today.

 

The trend for the day was up following a big bounce during the European session. When the U.S. came on-line, poor news combined with a dropping dollar and increasing oil prices applied pressure to equities which played out in the euro/yen as a failed attempt of the highs. When price reached the 164.80ish zone, I zoomed in, watched and waited for a signal. Price attempted multiple times to break the high, but ultimately failed. After I saw my signal (the third attempt higher, candle prints gave the go-ahead), I went short at 164.86 with a tight stop above 165.

 

I scaled out at the zone indicated on the 5-min chart (+50 pips) and have now fully paid for this entry in case it retraces back toward the next hot-zone near 161.50. The trend remains up on the hourly, so caution is advised for shorts. A long entry near the scale-out zone certainly doesn't hurt either (and may end up being the wiser action), in case this move is part of a larger break-out play higher. Otherwise, the initial short is in a good position to profit from a move lower.

 

Obviously, the way you'd play this on the longer time-frames might differ from the way I initiated this trade on the shorter frames, but it shows how I utilized the shorter time frames to select focused entries.

 

Thanks for the detailed explanation of your thought process during the trade! I'm sure this is very helpful to and much appreciated by many.

 

One thing i was not sure of is why you entered after the third rejection? The first 2 attempts also provided an entry after an exhaustion type bar (although yours proved to be far better), do you wait for an RSI divergence for confirmation? Also any reason for having the stop above 165 (round number/option barrier?) instead of above the 3 bar highs around 164.95?

 

I join Sledge in asking for more of these examples if your time permits.