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Hello all,
https://www.tradingview.com/x/6RkQxO4U/
Orange dot is long entry
Black dot is short entry.
I am confused where and when to exit in a trading range.
Questions:
1. Should I aim for 2RR for these trades because they are 40% probability setups?
2. Or should I just exit at top and bottom because its a trading range?
Thank you
In your first two trades you are clearly in a TR so better to exit at bottom/top. In the second orange dot, the MKT just broke out of the TR below with good momentum, so it could be trending. Your second orange dot is just a doji following a strong bear bar, so LP, but the second entry 3 bars later looks good for a Wedge bull flag at EMA and trend resumption. Yet, tho the BO was great it was followed by a horrible FT so becoming TR PA and, then, better again to exit at the highs or below decent bear setups (your last black dot). Your last orange dot trade is LP because you are in a bear microchannel and the bears had a HH MTR, so I think better to wait for a second entry preferably reversing up at previous lows, not just above.
In your first two trades you are clearly in a TR so better to exit at bottom/top. In the second orange dot, the MKT just broke out of the TR below with good momentum, so it could be trending. Your second orange dot is just a doji following a strong bear bar, so LP, but the second entry 3 bars later looks good for a Wedge bull flag at EMA and trend resumption. Yet, tho the BO was great it was followed by a horrible FT so becoming TR PA and, then, better again to exit at the highs or below decent bear setups (your last black dot). Your last orange dot trade is LP because you are in a bear microchannel and the bears had a HH MTR, so I think better to wait for a second entry preferably reversing up at previous lows, not just above.
Thank you so much ludopuig for the response. Thanks,
In your first two trades you are clearly in a TR so better to exit at bottom/top.
The first long trade (orange dot) made a profit.
The second short trade (black dot) did not make profit. After entry price created a tight trading range. After noticing price action turning to TTR after entry, would I be logically wrong for exiting Breakeven instead of just simply waiting for profit target to hit near support to trigger? I believe this where discretionary trade management start to trigger, when the premise changes after entry.
What plays in my head is I have to hold for the 2RR minimum target because this a 40% probability trade setup and let the odds over the next XXX play out. But logically does it make sense to hold for a target when the price action premise has changed and or should I discretionary manage the trade based on new change market condition. Al Brooks always says "you still have to manage the trade after entry"
Your second orange dot is just a doji following a strong bear bar, so LP, but the second entry 3 bars later looks good for a Wedge bull flag at EMA and trend resumption.
Thank you, but what does LP mean please?
Yet, tho the BO was great it was followed by a horrible FT so becoming TR PA and, then, better again to exit at the highs or below decent bear setups (your last black dot).
Thank you for the response here.
Yes, I was expecting my orange dot trade after breakout to go up at least 1RR or more, but price turned into a trading range like you stated. I did not exit, and end up breakeven +1 tick. You are absolutely right. I wrote in my notes next times this happens and price action premise changes after my entry look for an opposite sell signa to exit like you stated. Very well stated.
Your last orange dot trade is LP because you are in a bear microchannel and the bears had a HH MTR, so I think better to wait for a second entry preferably reversing up at previous lows, not just above.
I was thinking the orange dot trade I took was at support area in a broad trading range. But the TR does look broad and could be a final flag after previous breakout trend. Waiting for 2nd entry long would give me higher probability, then taking the first entry long.
I have an challenge I am trying to get better with and that is not looking too far left and getting stuck in trend mode. For example, the last orange dot long trade I think was because my mental was saying "market in trend , buy support" But with this thinking ignore the opposite of bear setups, like the HH MTR short setup you mentioned. That was valid trade, even if I had waited for one more bear bar for high probability short.
Have you had this challenge before?
Thank you kindly
The second short trade (black dot) did not make profit.
Yes, it did!
After noticing price action turning to TTR after entry, would I be logically wrong for exiting Breakeven instead of just simply waiting for profit target to hit near support to trigger?
In TRs, MKT does two legs and spend most of the time in the middle third, so you can have a TTR and no need to exit. Here you had several choices for the second leg's end. Once you see the second leg ending, you have to exit with a profit.
What plays in my head is I have to hold for the 2RR minimum target because this a 40% probability trade setup
Nop, trades at the extremes of TR are HP (= High Probability. LP = Low).
But logically does it make sense to hold for a target when the price action premise has changed and or should I discretionary manage the trade based on new change market condition. Al Brooks always says "you still have to manage the trade after entry"
Absolutely, management is the key. In TR BLSHS so this means you scalp out quickly, either with a fixed points profit target (4-5 points) or a PA target, therefore in your orange dot you exit at previous Highs or at your black dot entry, and you exit your black dot entry at any of the 2? lows.
I have an challenge I am trying to get better with and that is not looking too far left and getting stuck in trend mode.
PA is a bar-by-bar analysis so you need to look to the left but also to the current bars.
1 is BO but from 2 to 3 many dojis, the BO has ended. It can be followed by a PB and resumption or a TR so you know that, at least, it will have a second leg up. Bulls tried resumption early but BO 4 was followed by a strong bear bar, so failed and this was TR PA. Then, the bear BO ending at 5 was followed by a strong bull bar at support, as expected, so still the PB premise was strong (it was AIL) and you have to be looking to buy for trend resumption. The second entry at EMA was good and had a good BO but the next bars were bear bars, telling you that resumption may fail and you were now more likely in a TR so, instead of holding for a MM, you exit at previous highs and wait for more PA to develop.
Have you had this challenge before?
Before, now and always... this is our job, deciding which side is stronger and most often I can't say so I better wait. The bears had a HH MTR but the move down to support was weak, clearly TR PA and the MKT was still AIL so it was ok to buy at support, yet the support was slighlty lower (and TRs use to reach magnets before turning over) and the bears had a microchannel so you needed a second entry to buy at support.
Thank you very much for the response ludopuig
Few questions please:
In TRs, MKT does two legs and spend most of the time in the middle third, so you can have a TTR and no need to exit. Here you had several choices for the second leg's end. Once you see the second leg ending, you have to exit with a profit.
Thank you for the response. For this trade, I had a pending profit target (buy limit order) 1 point above the support line I drew. I need to learn to not be a slave to my profit target and get better a trade management. I think what goes through my mind is Al brooks video course saying "low probability trades 40%, you have to hold for 2RR atleast". So I try to not bother the trade, but not sure if this is good trade management, cause sometimes brooks says "You have to manage the trade correctly". So I get a bit confused cause I do not want to mess up the trader's profitability equation. Do I make any sense at all? lol
In your diagram:
- Can you please identify the 2nd leg?
- What does the 1, 2?, 2? represent please? Do these represent HL locations and possible bull reversals and in my case, exit positions for a profit.
Nop, trades at the extremes of TR are HP (= High Probability. LP = Low).
Perhaps, I need to watch the Trading Range courses again, but how are the extremes of TR HP , with 60% chance of win? Thanks
Absolutely, management is the key. In TR BLSHS so this means you scalp out quickly, either with a fixed points profit target (4-5 points) or a PA target, therefore in your orange dot you exit at previous Highs or at your black dot entry, and you exit your black dot entry at any of the 2? lows.
Thank you for this clarification.
I am not sure why I see the orange dot as an easier trade to take then the black dot. The reason is cause mentally I look left and see that bull trend, so taking the orange dot trade makes me think higher probability of at least one more push up. The black dot trade looks against the trend, but I need to learn and constantly remind myself 20 or more bars in sideways PA just simply mean TR and BLSH regardless of what happened 40 or so bars ago since the black dot. I hope this makes sense?
For the black dot trade, it does not help that the EMA is sloped up near the upper TR.
1 is BO but from 2 to 3 many dojis, the BO has ended. It can be followed by a PB and resumption or a TR so you know that, at least, it will have a second leg up. Bulls tried resumption early but BO 4 was followed by a strong bear bar, so failed and this was TR PA. Then, the bear BO ending at 5 was followed by a strong bull bar at support, as expected, so still the PB premise was strong (it was AIL) and you have to be looking to buy for trend resumption. The second entry at EMA was good and had a good BO but the next bars were bear bars, telling you that resumption may fail and you were now more likely in a TR so, instead of holding for a MM, you exit at previous highs and wait for more PA to develop.
Thank you,
I need to learn to not be a slave to my profit target and get better a trade management.
The trader's equation needs to be recalculated in each bar, once it becomes negative you have to exit, no matter if you have a profit or a loss at that moment.
- Can you please identify the 2nd leg?
- What does the 1, 2?, 2? represent please? Do these represent HL locations and possible bull reversals and in my case, exit positions for a profit.
The 1 is the end of the first leg and the following 2? are candidates for the end of the second leg and places where you should exit.
Perhaps, I need to watch the Trading Range courses again, but how are the extremes of TR HP , with 60% chance of win? Thanks
In a TR the prob favors a reversal at the extremes so if you are high in the range the high probability event is that the MKT turns down, not that it keeps going up breaking out of the TR. Most TR BOs fail so most reversal at the extremes succeed, they are HP. (the higher prob you can have in a TR)
I am not sure why I see the orange dot as an easier trade to take then the black dot. The reason is cause mentally I look left and see that bull trend, so taking the orange dot trade makes me think higher probability of at least one more push up.
This is correct, but the second leg up can be the first bull leg in a TR, a MTR reversal or a continuation of the trend. I told you already why continuation was not likely because many TR PA.
The black dot trade looks against the trend, but I need to learn and constantly remind myself 20 or more bars in sideways PA just simply mean TR and BLSH regardless of what happened 40 or so bars ago since the black dot
It is not the amount of bars (20+) that makes it a TR but the bars starting at bar laveled 1 representing TR PA (dojis, tails, bad FT, reversals).
I need to learn to not be a slave to my profit target and get better a trade management.
The trader's equation needs to be recalculated in each bar, once it becomes negative you have to exit, no matter if you have a profit or a loss at that moment.
- Can you please identify the 2nd leg?
- What does the 1, 2?, 2? represent please? Do these represent HL locations and possible bull reversals and in my case, exit positions for a profit.
The 1 is the end of the first leg and the following 2? are candidates for the end of the second leg and places where you should exit.
Perhaps, I need to watch the Trading Range courses again, but how are the extremes of TR HP , with 60% chance of win? Thanks
In a TR the prob favors a reversal at the extremes so if you are high in the range the high probability event is that the MKT turns down, not that it keeps going up breaking out of the TR. Most TR BOs fail so most reversal at the extremes succeed, they are HP. (the higher prob you can have in a TR)
I am not sure why I see the orange dot as an easier trade to take then the black dot. The reason is cause mentally I look left and see that bull trend, so taking the orange dot trade makes me think higher probability of at least one more push up.
This is correct, but the second leg up can be the first bull leg in a TR, a MTR reversal or a continuation of the trend. I told you already why continuation was not likely because many TR PA.
The black dot trade looks against the trend, but I need to learn and constantly remind myself 20 or more bars in sideways PA just simply mean TR and BLSH regardless of what happened 40 or so bars ago since the black dot
It is not the amount of bars (20+) that makes it a TR but the bars starting at bar laveled 1 representing TR PA (dojis, tails, bad FT, reversals).
Thank you very much for the response ludopuig and the time and effort.
