There are two reasons that made the first bar come to life for me, the first was to stop being an analyst and sit there playing with the charts and reading chat room text.....the second was to get into a trade, off the open before the market made the move of the day. Today, after two days of spinning my tires, it happened. Now there are a few problems, first we talked about just how much of an opening range you could handle without passing on the trade and today that range was 4 full points in the Russell2000. Then we had 6 inside bars, where neither the high or the low was taken out...and we had to wait and wait.
But once the low was taken out without taking out the high, we were short, then came the pullback and all you could think about was closing the small gap at 792.70 or so and taking you out......BUT if you live and die by the rules, at 9:56 to 9:58 the stoch was oversold and allowing the high of the last bar to be the trailing stop before going to BE....you got more then lunch money today......and then the drop into hell.......what if you had moved out to the 3m chart and used the same idea of allowing the high of the last bar to be a trailing stop.....would take have worked????
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3 comments:
Now I'm confused. Do you take the trade if the range is more than 2 points? Yesterday you said to pass on it, today you said you took the trade on a four point range bar? I really appreciate you sharing your ideas but it is confusing when they change like this.
There would be two questions that have to be answered...for your style of trading. First one would be how big of a gap, the opening price against yesterdays closing price, could you have before you would pass on this setup.
The second, would be how large of a range of the first bar could you allow based on the risk you would have to assume.
I started with an example using a 2 point range.....that was just a starting place. Each of us, will or "should" have their own set of rules based on actually tracking the different pieces of the puzzle.
Creating a log of the different elements as we work thru this setup. Then practice on a sym trader and develop a solid set of rules based on your style.
But glad people are at least following along and tracking it
Do you wait for the take out candle of the high or low of the 1st bar to close before you enter the trade?
-jason
long time reader
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