tokyojoe
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Morning, potential false flags must always be considered, they may be a trap, maybe they are a genuine break, but always be suspicious of a drive up (or down) straight after cash bell, especially after any sort of time out hols.
It is prudent to be aware of yesterdays (or last trading days) cash high/low/close, see how the pa reacts around these levels, after all, these are the previous days value points of interest.
Then observe the usual levels.
Then if there has then been a very large move after the trap, then consolidation/rest period is usual, people will sweat during this period (been there) if they have held on with a wide stop.
I prefer to bail early if my position is quickly going t!ts up, in order rethink the situation & reposition myself.
200 points is an enormous & in my opinion very unnecessary amount of sweating to sit through (just my opinion though as a very short term guy)
A 10 or 20 points loss can free you up to gain 20+ in your next position (or not, in which case it's time for time out) but more importantly it is the immediate freeing up of your time, unless you go into the realms muli positions, hedging etc.
......BUT !!! Granted It is very very tricky to gauge the best point of entry with such tight stops, as Dax (or rather broker) can hoover 10 or 20 pts in a nano second, it sees 20 points as easy pickings, this is why I concentrate so much on traps & price points.
All price points can be read in different ways. Traps can be taken advantage of, anticipate the possibilities within them.
This is probably geared much more to my style of trading, as time is a very important factor for me.
I have to feel VERY switched on & in tune with the movement to trade this way & to prevent myself from following like a sheep, it is mentally zapping to trade this way.
I like some of the other more black & white styles on this thread, they've helped me not to overthink the traps.
Wider stops are obviously much easier on the eyeballs & grey matter (& will probably save you an actual real life early death
)Its a bit like chess in some ways, thinking a few moves ahead, but I do not think that the price is predictable, far far from it imho, but when it reaches the common levels it is how it behaves in the traps I'm interested in, purely to keep a tight stop.
Some days my reading of them is atrocious, but this is why I like my stop loss to be manageable, no one knows where the price is ultimately going, no one !
So its morning & afternoon bias only for me, each day every day (if I'm in the market), couldn't care less where its going tomorrow.
Hope the rest of the day pans out
