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Hi,
In this video (and many others) Al talked a lot about 2nd leg.
it's one of the best eye-openers for me as I have never noticed them before and it has helped me to NOT take so many trades which I would have :-).
questions is, is there a way to measure the 2nd leg for potential trade target?
and is there a way to know when the 2nd leg will start? or do we always wait for it to break the previous leg's top/bottom?
Yes, you should be using 2nd leg moves for profit targets. On NinjaTrader you can use the drawing tools for (1) Fibonacci retracement (shortcut F9), and (2) Fibonacci Extensions (shortcut F8) to draw these targets. Ignore the 'Fibonacci word, just think in terms of retracements and measured moves.
See attached example using both on Emini this very minute! I do not normally draw both, and for small moves like sample, maybe none at all and eyeball it.
PS. Just using current chart as example. Does not mean I think it is going down, but it may just do the second leg and then sideways/up for rest of day! The 3,126 March high target is not far above.
thanks Richard,
So the mm is the height of the 1st leg to be measured from the break of the pullback.
Awesome got it.
I don't use Ninja trader but my platform gives me a measuring tool.
How about the entry? can we know when the pullback will stop and start to turn around? or the entry is at the break of the start of the pb?
BTW, quite colorful chart 🙂 .. never seen a chart with more than 2 colors
The bottom green bar at the trend line is a High 2 so a good entry but just a scalp as it stalled and came all the way back. Now in a sideways tight trading range until the big traders get back from lunch! 😎
The pullback could have gone down a bit more to a wedge so we can never be absolutely sure when anything ends. But in this case, the trend lines drawn from the open give higher probability that the High 2 is worth taking.
>>BTW, quite colorful chart 🙂 .. never seen a chart with more than 2 colors<<
Haa. Trading has to be fun, right?
PS. I am using an 8,000 tick chart so looks a little different to the 5-minute.
thanks Richard, getting a bit clear now. unfortunately, I don't have emini on my platform.
