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Hello all. Often I'm finding it difficult to pick a good entry point in TRs and broad trends. On the chart below, reversal 1 was probably the clearest. Reversal 2, although a DT, had a terrible signal bar and doji bars made it unappealing to sell below neckline. Reversal 3 had a good signal bar, but not a second entry buy, which is ideal after 3 consecutive bear bars. Reversal 4 had great context, multiple wedge top confluence, overshoot of channel line, and a double top, but again a doji signal bar. Any insights on the probabilities and ideal entry points in this type of environment? Are second entries at the extremes high probability in TRs even if the signal bar looks awful?
A broad channel is basically a trading range and trading ranges don’t give good signal bars. It’s a limit order market that you need a wider stop for you have to trust that what’s been going on will continue ans far as the chart pattern. After 2 reversals I would have placed a limit buy order. I would have favored the buy over the sell but you can trade both ways. Just trade smaller so you’re not worrying about the risk.
Thanks for your reply. In my chart, I could tell that it was going to trade like a TR fairly early. I prefer to enter with stop orders on reversals and I think this pattern was broad enough for that starting at reversal 1. I think, in general, I will start trading DT and DBs at the extremes with tighter stops regardless of the signal bar, and if there's a decent signal bar but no DT or DB, perhaps use a slightly wider stop for some wiggle room.
