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Hi guys, this is today's ES chart (6000 volume). I am trading well in trading ranges and broad channels, but days like today are difficult for me. I just can't recognize trends well as they unfold. I'm always scared to buy the top.
For example, I bought the close of the signal bar I marked with a green arrow, and I got out at the close of the big bull bar touching the top of the broad bull channel I drew, thinking it was a climactic end of the bull leg within the broad bull channel. Last time that line was tested, market reversed strongly. It was my only trade today, as I was scared to buy after, thinking it would reverse soon. I noticed myself trying to find a top so I just quit trading.
Do you guys have any tips for me regarding recognizing strong trends? Was there something leading up to that big bull bar that I should have been aware of? That should have made me more bullish?
I'm only trading 1 contract at a time (currently sim trading), and I think if I traded bigger size I would have sold half or something at the point where I did now.
I think the TR or Broad Channel, however you wanna classify it was a TR on a larger TF and therefore BO mode. Naturally, it had to end sometime and it did so today. I don't see why you exiting where you did was a problem. On other cases, if it were in a TR, you would have saved up a few ticks of profit by exiting there.
What you could have done differently was you could exit below a bear bar COL. In that case, you would have been able to ride the swing up for a lot more. The tradeoff in this case would have been, you would always have to sacrifice a few ticks of profit every time you exited your trade below a bear bar COL while the market was in TR.
Alternatively, you could have exited like you did today and re-entered the trade when it was clear that the market had broken out of the TR where obviously, your stop would be big and that might be a reason not to enter the trade. Al talks about using options to control your risk - you could consider that given you have a fair understanding of them.
