Different tack tonight after what looks like a hard day.... Suppose you took a long at 1010 at 15:55.... you're in the clag pretty quick aren't you?..... You thought 10k was the flying break...It came off 64 , tested 10 K twice then broke up through. How safe is that? well, safe you thought, but it's gone pear shaped and we don't want to panic an exit, It might just reverse and fly back up. So what to do..... Look back for clues.... the price looked like an ND top but RSI was following the price, so we can assume it's not a top so we're not in imminent danger.... OK so we didn't see the bear flag, but we see it now.... and it's target is around 9950... The 100 MA is flat and starting to drift down... so we think about the 100MA rules... We start to bottom out at 85 and RSI is well off the lows at 40 100MA is dipping slowly and this trough is not going to make the 950 target...and we're 16 below the 100MA. The price slowly rises up and this time we see the bear flag , being more alert having missed the first one...WE can see that the drop from this bear flag is going to be around 30 points , but we dont quite know exactly from what point.... but we can take a guess and say it's going to be from around 10K so that'll be 9970.At this point things are looking to get worse for our long.!00MA is still moving down slowly. WE know that there is a prior target of 9950 and if we don't break to the upside, it's likely to be met sooner or later.... and it could be a direct drop through our guesstimate of T1 at 70 . The only sensible option is to take the hit around 10K at 17:00.
This is taking a closer look at two things- taking a really bad trade at the outset, and trying to manage an exit instead of either hoping it will come good, or panicking. It also illustrates how the 100MA in a slow drift will sooner or later take you into deep water if you got your entry on the wrong side.
What if you had gone short at 1010? Much easier story... you know the price has to re test 10K and if it breaks, it's likely to pullback before taking of, giving an exit opportunity. So, you are sitting under the 100MA and even the retest of 10K at 18:30 is not too much bother.... RSI is peaking out with a mini ND and off it goes dropping through the bear triangle and T1 (at last) to bounce off 32 with PD and an exit...
OK so you're saying 'you must be mad to take a long at 1010'.... but S*** happens to us all at sometime. :cheesy:
Wanna use them to compare my analysis to anyway. Actually come to think of it a really good thread would be if each day we had 1 post from each person accompanied by a chart giving that persons round up of the trading day on the dow. (could use it for forex and other indices aswell). I reckon ppl would learn alot from seeing the same data interpreted in different ways. Sry going a bit off the subject but if anyone can help me with the data pm pls.
