I got a fantastic entry in today’s crude session. Though the profits are ordinary, the entry itself reminded me how important it is to maintain a feel for the market flow. I can say, it is an add on to the active trade management. Lets look at some charts.
Context:-
Market is trading in a sideways environment. Though it approached the range resistance with strength, buy orders were totally absorbed by the resistance. Market immediately got rejected after the breaking the resistance.
Future Bias:-
No signs of continuation after the breakout. As per the third principle of future bias, market continues to trade in the sideways environment.
Setup:-
As the trade must be in the direction of the future bias, I will take a BOF trade when market fails to continue to the upside in the second attempt. The high formed after the breakout is the level I am interested to look closely now.
Lets look at LTF chart to watch price interaction with the price level.
As expected, price failed to continue in the second attempt. Its time to prepare my entry parameters.
Stop – 2836
LWP- 2826
T1 -2822
Risk to reward is not favorable for if the entry is with the stop order and hence , I must only enter into this trade if I can workout a better entry with limit order before crossing the LWP. So, I didn’t place the stop entry.
I love to work entries in the areas of rejection. As of now, 2829-2834 is the area that I can look to play with limit orders when price approaches it with weakness. Breaking the 2834-2836 level will invalidate my premise.
Lets add few more LTF candles to the chart.
As expected, there was weakness while approaching the rejection level. My entry was at 2832. It got hit but it didn’t get a fill . But the LWP was not yet triggered. As I am not allowed to enter with a stop order, I moved my limit entry order to 2831 (2832 is the new rejection level now) and then it got a fill. I would have canceled this entry order it market crosses the LWP before my entry gets a fill.
The outcome of the trade is as follows
The profits of the trade are ordinary, but I was very much excited with the entry and it went into my books.
If I didn’t feel the price action at that time, I would have missed it.
If I didn’t have limit entry strategy in my arsenal, I would have missed it.
If I hesitated to drag the entry order down by a tick ( which is again possible with the feel for price action), I would have missed it.
Don’t look for setups. Maintain situational awareness and feel the price action. Market will tell you what to do to hop on to a winning trade.
(Courtesy - JCK)
Context:-
Market is trading in a sideways environment. Though it approached the range resistance with strength, buy orders were totally absorbed by the resistance. Market immediately got rejected after the breaking the resistance.
Future Bias:-
No signs of continuation after the breakout. As per the third principle of future bias, market continues to trade in the sideways environment.
Setup:-
As the trade must be in the direction of the future bias, I will take a BOF trade when market fails to continue to the upside in the second attempt. The high formed after the breakout is the level I am interested to look closely now.
Lets look at LTF chart to watch price interaction with the price level.
As expected, price failed to continue in the second attempt. Its time to prepare my entry parameters.
Stop – 2836
LWP- 2826
T1 -2822
Risk to reward is not favorable for if the entry is with the stop order and hence , I must only enter into this trade if I can workout a better entry with limit order before crossing the LWP. So, I didn’t place the stop entry.
I love to work entries in the areas of rejection. As of now, 2829-2834 is the area that I can look to play with limit orders when price approaches it with weakness. Breaking the 2834-2836 level will invalidate my premise.
Lets add few more LTF candles to the chart.
As expected, there was weakness while approaching the rejection level. My entry was at 2832. It got hit but it didn’t get a fill . But the LWP was not yet triggered. As I am not allowed to enter with a stop order, I moved my limit entry order to 2831 (2832 is the new rejection level now) and then it got a fill. I would have canceled this entry order it market crosses the LWP before my entry gets a fill.
The outcome of the trade is as follows
The profits of the trade are ordinary, but I was very much excited with the entry and it went into my books.
If I didn’t feel the price action at that time, I would have missed it.
If I didn’t have limit entry strategy in my arsenal, I would have missed it.
If I hesitated to drag the entry order down by a tick ( which is again possible with the feel for price action), I would have missed it.
Don’t look for setups. Maintain situational awareness and feel the price action. Market will tell you what to do to hop on to a winning trade.
(Courtesy - JCK)
