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as per the attached photo, SPX 15 min chart, there was a strong breakout from a bullish flag yesterday in US session, 4 strong consecutive big bull bars, good follow through, all bars closing near their highs.
we should have at least a measured move target based on the height of those 4 bars, right? and after such strong breakout, we should have at least 2 more highs in the phase of a bull channel.
But the market neither reached measured move target nor made a 3rd high and fell below the bottom of the breakout after the second high .
It's ok for a beginner/swing trader to take profits at 1x Risk in a strong BO planning on holding TBTL, and/or if the price races quickly towards 1x target
t's ok for a beginner/swing trader to take profits at 1x Risk in a strong BO planning on holding TBTL
No, a swing trader does not expect only 1 x risk and TBTL. A swing trade goes on for many many bars and the aimed profit hast to be 2 x actual risk.
and/or if the price races quickly towards 1x target
But if you planned for a swing and the MKT suddenly reaches the target (top of TR) in one bar (exception), like in 31d slide16, you take the profit. Note that in 31a slide 6 the MKT is in a bull trend, so your targets are bigger than in 31d slide16 because this chart is in a TR, so you exit at the top swings and scalps.
This is the scalp target, there are other swing targets (leg1 = leg2, MM based on the depth of the PB, ...). The swing can go much further than seems possible (but also can fail miserably).
3. Because strong BO, probability ≈ 60%+ Therefore 1x initial risk is acceptable trader's equation.
This is for the scalp.
5. Swing trading so willing to sit thru many bars, legs and PB as long as premise still valid.
This is the key: exiting the swing only when the opposite side creates a good setup, here below the final flag reversal.
Estimation = consecutive climaxes, large wedge, just under MM, sideways TTR, so probably FF.
Consecutive climaxes are ideal but a protracted trend can do as well. Wedge is not a needed, it is a different reversal pattern, but if you have it it adds up to the probability for the reversal. A sideways TTR below the MM is the most important thing, because TTRs are magnets, so when the MKT breaks out it will tend to be pulled down to the TTR so selling this failure is the final flag setup.
And is that the same strategy with all FF?
You have 1-2 bar final flags that are different, but for flags after protracted trends (with or without climaxes) and TTR below the MM, yes. Here you had a tight channel up with not a clear wedge so even with the final flag you needed a MTR to reverse the MKT, therefore, the Final flag was a scalp, not a swing. You could exit above the micro DB or at any given points target. The trend resumption attempt was strong with consecutive bull bars so when the MKT finally reached the MM and gave the MTR, the probability after big down and big up was for a TR, not for a trend reversal, so selling the last bar of the chart was not a great trade.
A sideways TTR below the MM is the most important thing, because TTRs are magnets, so when the MKT breaks out it will tend to be pulled down to the TTR so selling this failure is the final flag setup.
In retrospect, is it a mistake to exit during the TTR?
You can't think in retrospect. The question is, in real-time, should I hold?
is it a mistake to exit during the TTR?
A TTR is a sign of equilibrium but without prior bear pressure, the probability still favours the bulls and therefore you don't have to exit the swing.
