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Just now on the euro/dollar 15min:
Easy situation:Nothing going on in the morning, possible breakout at 8am.
I speculated on a 2nd leg up and won.
If the 2nd would be slow and weak i would certainly consider getting out earlier.
Now the 2nd leg was even stronger. Would you stay in longer because of that?
Would you buy again now?
Would it be reasonable to switch to a higher timeframe and draw your measured move from there?
(i miss more discussion about "adjusting" your timeframes, isn't that a thing?)
If a pattern develops on a 5min chart and grows to the same pattern on a 15min chart, isn't it reasonable to adjust your targets to the 15min pattern?
Even though i won, my (theoretical) profit/loss ratio was <1 due to my entry.
My entry was below the top of the first leg.
My stop-loss was below the beginning of the first leg.
Therefore having equal risk to reward seems to be impossible and i'm not sure a 60% probability is enough to compensate for that.
Now the 2nd leg was even stronger. Would you stay in longer because of that?
Would you buy again now?
Yes, second leg up likely with the surprise bar up alone, then bull FT, so buy for any reason if fou can bear the wide stop needed.
Would it be reasonable to switch to a higher timeframe and draw your measured move from there?
Switching time frames sounds good but can add confusion (many times, conflicting signals). The good news: you don't need that to find targets:
If a pattern develops on a 5min chart and grows to the same pattern on a 15min chart, isn't it reasonable to adjust your targets to the 15min pattern?
It is better to trade the chart in front of you unless you can watch both charts and process the info without errors. If you can then, yes, you could increase your profit target based on the 15 min chart.
Even though i won, my (theoretical) profit/loss ratio was <1 due to my entry.
My entry was below the top of the first leg.
My stop-loss was below the beginning of the first leg.
Therefore having equal risk to reward seems to be impossible and i'm not sure a 60% probability is enough to compensate for that.
You are not giving enough details to help but with a RR < 1 you need a 80% probability to win, so you exited too early!
Thank you for your insightfull reply.
It went up a little bit further but not much and is now pulling back more then 50%.
If i stayed in i would now be in a state of emotional regret 🙂
I bought again after about 30% and 50% pullback, but without waiting for confirmation, so my only justification is that strong bull-bar.
I would like to ask a related question about stops.
I often get stopped out on previous lows.
I suspect a bull-trend but it goes lower then the previous low and i'm out.
Then it turns out it is actually a trading range where i could have exited with little loss or even some profit.
If my suspected breakout happens after a long period of nothing much happening, would i just trust into the market cycle and asume an uptrend vs. a trading range?
And vice versa, if there was a trend previously would i be using wider stops to cover a likely transition into a trading range?
I bought again after about 30% and 50% pullback, but without waiting for confirmation, so my only justification is that strong bull-bar.
That is okay, buying for any reason includes buying PBs.
Then it turns out it is actually a trading range where i could have exited with little loss or even some profit.
Then your read (=premise) was wrong and it is ok to be stopped out. Let's comment the chart you posted: after the strong BO bar and FT, closing well above the TR top, you expect a MM up and as long as bears don't close the body gap (see below), you have a trend up. Rather, if the gap gets closed, you are instead in a TR and therefore the PB of the strong BO can go below its bottom and, then, reverse (TR). You can see more examples of PBs going below bottom of BOs in the encyclopedia.
If my suspected breakout happens after a long period of nothing much happening, would i just trust into the market cycle and asume an uptrend vs. a trading range?
As I explained above, the answer is no. The premise that the BO erased was the bear trend but then you have to follow the PA to see if the MKT becomes either trending up or just gives the second leg up (after the surprise BO) and enters another TR.
And vice versa, if there was a trend previously would i be using wider stops to cover a likely transition into a trading range?
Wide stop not for beginners: if you didn't see in advance the MKT behavior change, better to be stopped out than bearing a huge risk. Wide stops look fantastic at the end of the day but in real-time they look even better to the trader taking the other side of your trade 😉
So better to place your stop in the correct spot and when you see a reversal setup, even if it is not strong, exit and see what happens next.
Thanks again, it will take me a while to digest your reply, but just one thing:
This breakout could also be seen as a Expanding Triangle which would explain the deep pullback and the lackluster behaviour following, yes?
Was this a struggle between computers seeing a breakout and computers seeing a ET?
Anyways, i intend to get out near the top of this range.
oh.. i just reached it... good.
Now it looks like a strong breakout again.... oh my.
This is really difficult. I watched hundreds of hours of the course and i got absolutely nothing.
There is a german expression that you only understand Bahnhof (train station), that's what it was for me.
Only now 6 months later i beginn to understand some of the basics.
This breakout could also be seen as a Expanding Triangle which would explain the deep pullback and the lackluster behaviour following, yes?
Nop, Expanding triangles are more horizontal (see the encyclopedia!). What you have ¡s a deep PB after a BO so disappointing but from the two possibilities, here you got the TR instead of the trend. Yet, the TR seems to be forming a triangle so you should be ready for another BO:
Anyways, i intend to get out near the top of this range.
oh.. i just reached it... good.
Now it looks like a strong breakout again.... oh my.
This is TR PA and, yes, it is confusing, so when this happens you need to be careful taking stop entries. Wait for the triangle BO.
This is really difficult. I watched hundreds of hours of the course and i got absolutely nothing.
There is a german expression that you only understand Bahnhof (train station), that's what it was for me.
Only now 6 months later i beginn to understand some of the basics.
Yes, it is hard but the reward is there if you perservere!
