Starting a trading journal based on my understanding of Wyckoff's work

[moreina]

Starting the session at the resistance area formed by the intraday action the day before. The daily seems to have recovered its bullish nature and the 30 minute charts show both intermediate and minor trend to be in a bullish state. As of now, unless we see something significant here, the only trade would be on the long side it it decisively breaks through or if it starts to retrace.

Price gaps up, drops down and take out the latest low, putting the 5 min intermediate trend into question, then rebounds of previous support. At this point it seems that the 5 min has aligned itself with the larger trend and so we go long on the bounce, with our stop loss at 15381.

Price rallies then immediately reverses with significant volume, pushing back down into the resistance area. On the 5 min chart we now have a broken stride, some supply evident from the previous day at the same level, and what amounts to a terminal markup. This is enough for us to close our long position and flip short, with the expectation that price will stop somewhere around 15311. Our stop loss is around the 15436 giving us about 31 points of risk to 94 points of potential gain.
Trades: 1, Losses: 1

Price drops, forms a high, then a lower low, allowing us to draw our trend line. Price breaks its stride but doesn't come as high as the previous high so we stay in.

Price breaks the previous low and so we draw another trend line. At this point we can also move our stop to breakeven. Selling pressure lets up a little bit later and price then breaks the trend line once again but fails to even come close to the previous high, signalling further weakness. We expect the decline to start picking up steam now. There is also no sign of support anywhere.

Volume starts to increase, signalling the participation of buyers, slowing the decline, then all trading activity vanishes at the bottom, which coincides with the previous daily high. We've had about a 54 point decline at this point from our initial entry and we can now expect price to make some sort of serious effort to rally. We could take our profits here, since the larger time intervals are still bullish and we can now expect the smaller 5 minute interval to fall in line. We choose however to stay in since our trend line is still intact and we don't see any evidence of serious buying on the 5 minute.

Price rallies as expected, gets turned away at the trend line, then forms a higher low just under the trend line. We can expect that even a small rally here would break the downward stride. Coupled with the fact that we have formed a higher low, and we are bouncing off the previous daily high, is enough for us to take our profits and run. We will wait and see if the sell off will continue or if a bullish move will start to appear.
Trades: 2, Wins: 1, Losses: 1, PnL: 10.5 (10.5 points gained for every 1 lost)

 

[moreina]

There was a sell-off the daily interval that brought price back down past the resistance area that we previously drew in. Though the intermediate trend is now neutral with a slightly bearish bias, there is an opportunity for a quick trade on the long side since the last push down showed a change of character and buyers coming in to support price. Price now breaches the afore-mentioned resistance area and retraces, which is where we go long.

Prices continues on it's bullish trend for a bit then reverses, taking out the last low before the latest high with higher volume. This warns us that we are probably at the end of the upswing and we exit when price continues past the low. Gain of 17 points.
Trades: 1, Wins: 1

Price bounces off the resistance line but we don't take the long. This is because the overall retracement is quite shallow, making it a minor fluctuation and therefore a bit more prone to whipsawing.

Price retests the highs twice, with a strong rejection on the 2nd retest hinting that the balance has now shifted towards the sell side. We go short.

Price drops slightly then reverses and takes out the last high. Our stop is hit at 15559 for a loss of 20 points.
Trades: 2, Wins: 1, Losses: 1

Price rises and forms a series of higher highs and higher lows, letting us draw a trend line. The trend line is then broken and price retraces roughly 50% from the start of the move, which also coincides with the last low. No signs selling pressure at the top, so we go long here.

Price rises then breaks the upward stride so we get ready to exit on a breach of the latest low. Selling pressure doesn't seem to be present and price recovers. We exit here as we are about to call it a day for a gain of 52 points.
Trades: 3, Wins: 2, Losses: 1, PnL: 3.45

 

[moreina]

We start the day with a retracement of the downmove from the 23rd. Supply entered at the 50% RET level but price continued it's way up and is now hovering below the last area of resistance. The plan now is to go long if price breaks the resistance level, or go short if breaks down from here.

Price gaps up on the open then proceeds to drift down to the resistance area and seems to bounce there, reversing resistance into support. We go long here with a stop at 15571.

Price immediately reverses and dips down and hits our stop for a loss of 16 points.
Trades:1, Losses: 1

Selling pressure then starts to come in more seriously and breaches support, retraces, and follows through. We enter short on the follow through. We expect price to stop or hesitate around 15526.

Price retraces slightly more than 50% but so far respects the supply line drawn in. We are prepared to exit for a small loss if price turns around and breaks the last high formed.

Price drops back down and goes slightly lower than the previous level but quickly rebounds. Buyers then keep price at support but fail to hit the ask at higher prices and the buying pressure starts to fade away. Price starts to compress between the support level and the supply line. Failure to bid the price up suggests weakness and a continuation of the downward movement though price can also suddenly explode from here so we move our stop to just above the last swing high at 15557.

Buyers pull their bids at support and price falls through, then immediately rebounds and takes out the last swing high, where we proceed to close for a gain of 12 points.

Price retraces and seems to bounce off the last swing high, which would mean resistance shifting into support and confirming an intermediate bull trend, and telling us to go long here. The reason we don't is that we haven't seen anything so far to suggest that a reversal would have any lasting power so we choose to wait and see what happens, and decided to enter short on a failure of the attempted bull move. This happens almost immediately and we go short as planned.

Price fails to follow through on the downside and we start to get ready to exit our short if it plays out that we made a mistake. One more attempt to rally takes place but makes a lower high, indicating three failed rallies with succeeding lower tops, suggesting weakness. Price then attempts once more to rally with an increase in volume. Everything now hinges on what happens next, if price is capable of rising on this increase in transactions we will need to scratch our short and flip long.

Price seemed to fall through but quickly stops and reverses. We close out our short for a loss of 13 points and go long.
Trades: 3, Wins: 1, Losses: 2, PnL: -2.41

Price still fails to go anywhere and we close out or long when we see increasing volume pushing price down. Another loss of 13 points.
Trade:4, Wins: 1, Losses: 3, PnL: -3.5

In hindsight we got caught in chop and we would have been better served in not trading after our second short didn't work out and just wait until price exited the range. A good rule of thumb to identify choppy conditions before we pay the price is the failure of a reversal followed by a failure of a continuation.

 

[moreina]

The daily shows price ranging and having some trouble with 15655.

The 30 minute as well shows price in a trading range, currently it seems to have breached the 50% RET from the last downward move and is proceeding to retest the high. If we can get in on a RET on the 1m we'll go long. We use the 1 minute because the distance between the midoint and the other side seems to be too tight for a 5 minute interval.

We get our opportunity on what looks to be a pyramid setup, and we go long at 15613 with a stop at 15606.

Price creates a range, seems to breach the upper bounds, then reverses and goes back in to the range. We exit here for a gain of 11 points though we don't go short yet.
Trades: 1, Wins: 1

We missed the succeeding drop as price goes back down into the previous range that was formed on the daily. We enter long at what seems to be a turning point. Given that the 30 minute interval has started trending downwards this is a countertrend trade with a possible target of half the selling wave.

Price rallies up to the previous swing high. We exit when the last swing low is taken out for a gain of 21 points.
Trades: 2, Wins: 2, Total points gained: 32

 

[moreina]

We start today with what seems to be another failed retest of resistance. The daily shows an established range and the 30 minute shows the failing retest.

To our surprise the 5m chart shows what seems to be a successful breakout and RET so we go long with a stop at 15628.

Price fails to hold on to the higher area and breaks down, and we get out at breakeven.
Trades:1, BE: 1

Price eventually dives back down through the resistance area and we go short.

Selling pressure dies down and price forms a higher low, so we mark out the potential support area, while also marking out a resistance area that's immediately taken out while also breaking the downward stride. Our stop is hit for a loss of 7 points.
Trades: 2, Losses: 1, BE: 1

Price then proceeds to pop back through the resistance area and retrace, so again we go long.

Buyers push price up to 15700, significantly higher than the previous high before price starts to drift down and form a series of lower lows. On the break of the second lower low we exit for a gain of 17 points.
Trades: 3, Wins: 1, Losses: 1, BE: 1, PnL: 2.42

 

[moreina]

Missed the lucrative opening drive as price drops all the way to the bottom of the range. The speed of the drop suggests it's oversold and we're waiting for a sign to go long at the bottom.

Price breaks its downward stride and starts to range at the bottom. There seems to be a false breakout at the bottom and we enter long there. Because of the way its behaving at the bottom, i.e. no rally so far, we plan to flip short if price does follow through with the break with a sell stop at 15451.

Price rallies up to the midpoint of the range and starts futzing around before acting like it wants to go back down. We exit here for a gain of 5 points.
Trades:1, Wins: 1

Price breaks down and we go short at the break.

Price drops, forms a lower low and lower high, and proceeds downwards. We expect it to reach 15270 or thereabouts, which is the lower end on the 4 hour chart.

Price breaks its downward stride while at the same time displaying a change of character in the form of increased volume on the rally, as opposed to the previous rallies we've seen so far. We exit here for a gain of 88 points.
Trades: 2, Wins: 2

Price has now traveled almost all the way to the swing low and given the speed of the decline we expect some sort of reaction around here.

 

[moreina]

So far the amount of points before a break (of a high or low) is considered confirmed has been arbitrary, and the amount of points price breaks the trend lines has not been accounted for. When price breaks a trend line, unless it breaks the last swing or there is increased volume in the move, it's largely ignored as a signal for exiting the trade. This means that some money has been left on the table and may even have caused changes in analysis, much the same way that a change of character because of volume warns us of an important change.

So after looking at multiple ranges and breaks of trends and of support and resistance, I've come up with the following number of points price is allowed to move against the trend line and S/R before a counter move is considered valid. Of course, this does not take into account other factors which may cause us to exit or enter earlier.

Break of trend lines: >= 15 -> continuation
Break of S/R in a range: >= 10 -> continuation
SL: 6 points above/below danger point

 

[moreina]

Price gaps up above the previous high, retraces, and seems to be bounce off the previous swing high. We go long here with a stop at 15440.

Price seems to have found resistance and seems to want to flow downwards instead of continuing on up. We exit here for a gain of 8 points.
Trades: 1, Wins: 1

Sellers take price back down inside the mini range but then seem to lose interest and price breaches resistance once again, retraces, and makes a higher high. We go long once again with a stop at 15465.

Our stop is almost immediately hit and we're out for a loss of 15 points.
Trades: 2, Wins: 1, Losses: 1, PnL: -2
At the open Price immediately rebounds off the previous swing low, confirming support and once again breaches resistance. We again go long on a RET on the 1m and now shift to the 5m chart. Stop loss at 15458.

Price forms a minor hinge before buying pressure pushes price upwards and we start to trend. Price then breaks our trend line by more than 15 points and we exit, as per the rules we set last night, for a gain of 44 points.
Trades: 3, Wins: 2, Losses: 1, PnL: 3.46

 

[moreina]

Today we'll be going through the last 2 days with the 5 minute chart to practice identifying trending vs ranging states of price. We'll use only the 5 minute chart, without any help from higher time intervals, for this exercise.

We start out on the 12th of June with price breaking out of a range and pressing up forcefully, the angle of ascent forming a second fan.

Price keeps on accelerating and forms an even steeper angle of ascent. This is the point where usually there is some sort of major reaction as this rate of price increase can rarely be sustained.

Price breaks the trend line, warning us that the climb might soon be over. Price recovers without coming close to the previous low and makes another attempt at the high where it promptly fails again after a very minor breach. This is the beginning stage of either a reversal or a ranging state. We draw a resistance line and observe what happens from here.

Another failed attempt tells us that price is at the very least in a neutral state, however the fact that price hasn't made a lower low so far also hints at the fact that there is no real selling pressure at the moment.

Price breaks the second trend line, rejects resistance once again, and proceeds to form some form of support. We are now officially in a trading range. A break on either side would signal either a reversal or a continuation. Until then price is ranging.

Selling pressure causes price to breach support in what seems to be the end of the ranging state and the start of a trend downwards.

The downward stride is checked almost as soon as it started. We draw in a support line on the break of the trend line, though no resistance is confirmed as of yet.

We get a sudden thrust up which would have told us that a continuation of the primary move seems to be underway, before turning into a shake out and piercing our support line at the bottom. A failure to follow through here would make us assume that we have entered chop.

There's a quick follow through followed by a rally and a return to a ranging state.

Price wanders around aimlessly for a bit before attempting to break out to the upside and return to a rending state.

A higher high and higher low are formed, price is now trending to the upside and we can draw a trend line.

Price hits its head on the previous resistance area, form support, tries again to breach resistance.

Price breaks through support, signalling a reversal and confirming the importance of the resistance area. At this point we draw a box from the lowest point that the previous reversal reached, to the highest point of the attempted continuation, and label this entire area a trading range. The distance end-to-end is 62 points, making tradeable though we would probably have to use a smaller interval than the 5 minute. For the purposes of the 5 minute this is a no-trade zone trading range.

What happens here illustrates the importance of defining trending and ranging states before taking any trade, as without it we would have continually taken trades and gotten continually stopped out. This way, we just wait until price decides to go either up or down before committing ourselves.

Price attempt to break to the downside then promptly reverses at the edge of our box, another trend aborted. On the 1 minute we would have taken this long, on the 5 minute we sit still.

Price reverses right away and heads back to support. At this point we notice that there seems to be a concerted effort to kick-start a trend inside the range, as evidenced by two downward swings and the rallies reversing at the 50% RET area. A break of support here would put the line of least resistance down.

Selling pressure forces price lower, confirming the trending state. Immediately it reverses, retracing 100% of the downswing. A break of the last swing high would signal a reversal.

A reversal does take place and price is now trending upwards.

Price is rejected around the midpoint of the previous range, drops back to the bottom of the previous swing, nullifying the upward trend and putting us in a continuation for the downward swing, and forms support. The failure of the reversal followed by the failure of the continuation puts us back into chop, and we draw another box around the price action and go back to a ranging state.

Price rolls around for a long while before breaching resistance and retracing, we're back in a trending state. The following are the points where we would have gone short (first 3 trades) and where we would have been stopped out. Again, this is assuming we would stick only to the 5 minute chart, which would leave us sitting on our hands most of the time, and not shift to a smaller interval to trade the extremes. We would have shorted and been stopped out 3 times for a loss of 66 points, and gone long on the 4th trade.

 

[moreina]

The hourly chart of the NQ is showing bearish tendencies by dropping through support. We zoom in on the 5m and look for an opportunity to short.

We get this opportunity to short at 15340, with a stop at 15369, 29 points away.

Price goes lower then forms a range on the 5m, from here we will judge whether price will continue down or recoil. A breach of resistance makes us start scaling out our position and we take 1/3 off at 15325, profit of 15 points.

We draw a minor trend line across the origin of the selling wave and the last swing high to help understand how price is behaving. Price again tests resistance and seems to break out on the upside, as well as violating this trend line. We take off another 1/3 at the same place of 15325.

Price then retests the previous swing high and proceeds to sink past support.

Price forms a range lower on, breaks out of it on the upside, which signals a minor retracement on the hourly chart. This would be our signal to look for an opportunity to short again but for now we sit still. Price promptly forms a swing high then continues its way down.

At the open price rallies and tests the previous swing low and rejects it, heading back down. This would be another opportunity to go short again as the rally is strong enough to warrant a low risk short if it fails.

Price forms another swing high and we fan the trend line to track the accelerating drop. We seem to be approaching some sort of oversold condition and are ready to close out the remainder of our short.

Price breaks the downward stride but fails to rally past the last swing high so we hold.

The accelerating decline with no meaningful rally for the day, as well as what seems to be a slight climax event and increasing volume on the reaction (change of character), makes us close out our short as the next swing low forms and challenges the downward stride.

On the hourly:

Our exit at 14865 gives us an average exit of 15171.

 

[moreina]

Continuing from where we left off, price punches through the last supply area, signalling a shift in the hourly intermediate trend, forms a range at the top, then proceeds up. The price action seems to be suggesting that the trend has now shifted to the bull side.

Price forms a swing low then climbs back into the range and we go long here at 15041 with a stop loss at 15006, 35 points away.

Price forms a higher swing high and a higher swing low and we draw in our first trend line.

Price seems to encounter resistance and we start scaling out again at 15068, taking 1/3 off.

Price retests the last swing low then blasts off to the upside.

Price hits resistance and starts to react. This is where we would start looking for another long opportunity on failure of the counterswing but again for now we stay still and manage our existing trade.

Price starts to range then suddenly drops below support. We take off another 1/3 here at 15106. We are now assuming that the hourly chart has started ranging.

If we draw a trendline from the bottom to the last swing low we notice in fact that price has broken its stride.

Price rallies slightly then proceeds to break through the last swing low. We close our last 1/3 at 15100.

Our average exit is 15091.

 

[moreina]

We start this analysis with the hourly chart once again. From a ranging state it started to show some inclination to bullishness, and we wait for a retracement to get in.

We see our first chance after price forms a swing low following a reaction to the bullish spike. We get in at 15139 with a stop at 15088, 50 points away. These stops are quite wide and we will need to figure out a better way in the future but for now this is our method.

Price rallies, then hits its head at the previous swing high, forms a low, then proceeds to drop through the low. Our short experience here shows that once this happens (inability to hold the price gain as illustrated by a failure to form a trading range and rally from there), price is likely to retrace all the way, or most of the way, back to where it came from. We exit our full position here at 15169.

We have a quick gain of 30 points but don't call it a day yet, shifting back to the hourly chart to see what the tendencies are.

Price goes back all the way down as expected , rebounds back up, then holds there, with a slight upward drift. It seems like price wants to push up and so we go back to the 5m chart and get ready for a breakout to the upside.

We get our chance when price breaks out on the upside on the small 5 minor range it forms at the top. Our entry here is at 15219 with a stop at 15197, 24 points away.

Price makes a scary move down, but as per our rules, this is actually the beginning of a long op so we hold tight and wait for a swing low to form before we make any decisions.

The swing low forms and we draw a trend line connecting it with the previous swing low.

Price promptly forms a small range and breaks our trendline, causing us to take of 1/3 of our position at 15238.

Price instead continues down and we close another 1/3 at 15229.

Price re-enters the range, then falls back out. We exit the final 1/3 at 15220. Average close is 15229.

We see another opportunity for re-entry but the stop is getting to be a bit far and unrealistic so we let it go.

 

[moreina]

Here the hourly seems to have turned bearish, and we wait for an opportunity to confirm this on the 5 minute and short.

We get our chance as price retests the previous supply area and turns away before reaching resistance. We short at 15217 with a stop at 15249, 32 points away.

Price immediately recoils and takes out or stop.

Another rejection at resistance, this time forming a lower high, and we try again upon failure to hold the breach of resistance at 15241, stop is 15264, 23 points away.

Price falls back down to the previous swing long on the 1m and bounces. As soon as it takes out the last swing high we exit since it seems that there is some hesitation to the downside and we prefer to wait and see what happens. Exit is at 15237 for a small gain of 4 points.

Price heads for a retest of the previous high and we watch for signs of failure.

Instead of rejecting, price violates resistance, pulls back, and seems to hold the gains, forming a swing low above the resistance area. We venture a long here at 15373 with a stop at 15360, 13 points.

Price retests the swing high and falls down taking out our stop. We're out for 13 points and the second loss this session. We go back to the hourly chart and try to see where this is all going.

Once again the hourly seems to have turned bearish so we wait for a retracement so we can play our short.

We get our chance at 15177, with a stop at 15211, 34 points away.

Once again our stop is immediately hit. With 3 losses we stop here. The last selling wave seems to be oversold due to the lack of rallies and we probably should have taken note of that before entering our short based purely on the mechanical price structure.

 

[moreina]

We start out the day looking at the hourly. The daily chart is currently bearish.

The 5 minute chart shows a break to the upside of a minor range which breaks the downward stride. This would put the hourly chart in a ranging state.

Flipping back to the hourly we see that a minor retracement has formed and so we prepare to go long on the 1minute chart, expecting a reversal at any moment but figure since the hourly itself has flipped the risk is justified.

We get our chance and go long at 15073 with a stop at 15049, 24 points away, and we're off to the races.

A swing low forms and we immediately bring our stop to breakeven.

A second swing low forms, lower than the first. Not good, so we draw a trendline between the origin of the move and this swing low, getting ready to scale out.

We get another swing low, this one higher, and fan out the trendline.

This one is broken and we take off 1/3 at 15082.

We form yet another swing low, higher than the previous one but the stride seems to be flattening out.

This one is broken as well and we take off another 1/3 at 15081.

A retest of resistance then a drop below the last swing low. We fully close our position at 15080 with an average close of 15081.

Price then rallies and breaks resistance and we decide to long once again on the breakout since this would put the hourly firmly in bullish territory. We enter at 15096 with a stop at 15078, 18 points away.

Price retraces and forms a swing low at our entry point and we move our stop to 15094.

Price breaks the minor swing points and we move our stop to the last swing low before the break at 15102.

Another higher swing low and we fan out our trendline. This one is broken but we decide to wait until a swing low is formed before starting to scale out.

The trendline of this low is broken, as well as breaking minor support, so we scale out 1/3 at 15139.

A rally and a breach of resistance and we fan out our trendline.

A break, a swing low, and the latest trendline utilizing this swing low is broken, coinciding with a return inside the range. We take off another 1/3 at 15154.

The more important trendline is also broken but we wait and see how price will react to previous support. This support is broken without much of a problem and we close our position at 15133. Average close is 15142.

 

[moreina]

Starting from the previous chart. The daily is still bearish while the hourly chart has turned bullish. The 5 minute chart shows a break of the downward stride near support and we enter another long, managed on the 1 minute chart, once a 5 minute swing is formed.

We go long at 15126 with a stop at 15107, 19 points away.

A minor rise then price starts to range, forming a higher minor swing low but not advancing much farther than our entry point.

A swing low on the 5 minute forms and we move our stop slightly below it at 15113.

This new stop is immediately hit and we're out 13 points. We don't flip short because the hourly is has not yet changed direction.

The hourly starts to show bearish tendencies and we wait from the 5 minute to move in that direction. We get our chance when the swing low is broken and go short at 15089 with a stop at 15103, 14 points away. Because the different intervals are now aligned with the daily chart, we manage this trade on the 5 minute chart.

Which turns out to be a mistake as price recoils and on 5 minute chart there was no chance to react. We're out 14 points. If we had stuck to the 1 minute chart we would have made money on this trade.

 

[moreina]

We start the day with the daily bullish and the hourly ranging.

We didn't see a good opportunity at the bottom so we end up buying on the breakout. Entry is 15120 with a stop at 15101, 19 points away. We now shift to the 1 minute chart for trade management.

Price makes a miniature range and as per our trade management rules, we move the first 1/3 of our scale out to 50% of the rally, which is about breakeven.

A secondary range within the first one and we place a second scale out at 15131, slightly below support.

A small rally and another range and put out a 3rd scale out at 15139, which is promptly broken.

Price then rallies, forms another swing high and swing low, then breaks that swing low. We exit our second 1/3 at 15150 on this break.

A lower swing low and lower swing high, and a break of the low. Final exit at 15141.

Our average exit is 15143, for a total gain of 23 points.

 

[moreina]

We start the day with the hourly ranging after a bearish sell off.

Price drops past the hourly swing point so we assume that we are resuming the bearish move and go short. Entry at 16302 and stop at 16325, 23 points away.

Price forms a series of lower swing lows and highs, breaks our trendline, forms another lower swing high but this time a higher swing low. We draw another trend line to connect to that high and exit 1/3 when it's broken at 16289.

Price rallies to the previous swing high and falls back to the swing low, confirming resistance and support. As price bounces off support we exit another 1/3 at 16288.

Buying pressure then forces price past resistance and we exit the final 1/3 at 16293. Our average exit is 16290 for a gain of 12 points.

Price rallies but rails to reach the area of the previous area and forms a range. When selling pressure forces price out of the range we assume again that the bearish movement is resuming and go short at 16301, stop at 16312, 11 points away.

Price forms a lower swing low and lower swing high then recoils and rallies past our entry point. We take off 1/3 at breakeven.

Price then falls back to the swing low area and forms another swing low and high. We draw a trend line across the latest two swing highs. As price stops at the previous swing low and breaks this trend line we start to suspect that we have reached temporary support and take off another 1/3 at 16298.

A rally takes out the high swing high, which is already past our entry point, and we close at 16302. Our average is 16300, which for all intents and purposes is breakeven.

 

[moreina]

The daily has formed a swing high, with the hourly is ranging and showing a possible bounce from support.

The days opens and price forms a double top, retraces to minor support, and seems to bounce from there. We go long at
16024 with a stop at 16012, 12 points away. Normally we wouldn't open a trade if not at the bottom or top of the hourly range but seeing as price seems to be interested in that area and the volume as price got nearer to it we feel that the risk is justified.

Price retests the area and actually dips lower than the previous attempt. We get ready for a quick exit.

Our stop gets taken out and we sit and watch to see if this is a false breakout or not.

Price drops further and bounces off previously established support on the hourly. We go long here at 15990 with a stop at 15976. Furthermore, on the possibility that the reversal fails, we are prepare to go short at 15976 as the daily chart suggests a nice drop if it goes in that direction.

Price forms a swing high and we move our stop to the 50% retracement area at 15006. It then forms a swing low and breaks it, ranging at a slightly lower area. We decide that if price breaks this next swing low we will exit at 16027. This happens almost immediately and we get out for a gain of 37 points, net 25 after taking into the account the 12 point loss earlier.

This should only be a scale out but as we don't have time today to trade further we stop here today.

 

[moreina]

We start out today with price gapping up into the middle of the range. It fails to reach the hourly resistance areas and seems like its turning at the minor 5 minute resistance.

We wait and see what the opening will bring.
Price rallies all the way to the hourly resistance area but we don't see a good opportunity to go short so we wait. It drops past 5m resistance, rallies, then reverses there again. Here we go short at 16044 with a stop at 16056, 12 points away.

Price reverses and our stop gets taken out. We settle back and wait to see where price wants go.

Price rallies past the previous hourly/daily swing high, putting the hourly in a bullish position. Price then falls to the previous hourly resistance area and forms a low and a high on the 5 minute chart. On the break of the high we go long at 15092, stop at 15072, 20 points away.

Price rallies slightly, forms another high and low on the 5 minute, which shows up as sequence of swings on the 1 minute chart, then starts to drift down. We move our stop to 16079, just in case.

Price does drop and take out our stop, so we once again settle back and wait to see. Hourly chart still has bullish potential.

Selling pressure forces price back into the range decisively, so now the line of least resistance is down. We wait for a change to go short.

Price is reversing off the hourly resistance area and we go short at 16072 with a stop at 16089, 17 points away.

Price starts to rotate around the hourly resistance level. As this could go either way we're ready to reverse the position since. a breakout here would give more weight to the hourly bullish move. We're holding on to the short for now.

The one minute chart is starting to show some definite bearish tendencies so we expect to hold the short and doubt that a long will materialize.

And we see a break of the range that was formed around the hourly chart and we reverse and go long at 16088 with a stop at 16073. We're down 41 points far.

And we're stopped out again, for a total loss of 56 points.

Our last trade for the day, we go short once again on the reversal at the 1 hour resistance area.

A swing low is formed and we move our stop to breakeven.

A swing high forms and we draw our trendline. We close as price decisively breaks it for a small gain of 8 points.

Looking back on the day we notice that our first trade, though technically correct since it was a reversal of a previously defined resistance area, shouldn't have been taken because it was in the middle of the hourly trading range.
The other trades were executed according to our plan but perhaps some adjustment is needed since the behavior of price, after reversing off the hourly resistance, rallied back to that area. In that situation, perhaps it is better to wait for the range to form then trade on the exit, rather than shorting immediately upon the first failure.

 

[moreina]

The overnight action sees price rally up into a new high, then fall back towards previous resistance.

Buyers appear here and attempt to support price and continue the bullish movement. We have a buy stop in the event that they are successful and the we begin a new bullish phase.

Price moves up and triggers our stop so we're in at 16084 with a stop at 16074, 10 points.

Our stop is quickly hit as price punches through. We don't reverse because the midpoint of the hinge, which is where price launched from previously, is right below and could act as support a second time.

Price plunges through the midpoint and we go short at 16068, with a stop at 16082.

At the open buyers rally and price reverses, immediately taking out our stop and moving higher. We go long once again at 16087.

Price forms a swing high and a swing low then a higher high. We move our stop to 16090.

Price then reacts and takes out our stop. We wait and see where it decides to go.

We get a bounce off support from yesterday and we go long at 16076 with a stop at 16057. Though we have resistance not too far up and the hourly has dropped back to a ranging state, we take the bounce because the volume on the 5 minute chart suggests a minor selling climax.

Price forms a swing high and we move our stop to breakeven.

We draw our trend line as price forms a swing low, and move our stop to 16080.

Price exits the trend line and we move our stop to 16083.

This is promptly hit and we settle down and see where price wants to go from here. Resistance has been established at 16110 and we have support at 16067 which puts us in the middle of the range.

Price seemed like it was shaping up for a breakout to the upside but then it reversed at resistance. We go short at 16101 with a stop at 16115. We're playing the reversals off hourly resistance and support because the hourly chart is ranging and has no definite direction.

Price forms a swing low and we move our stop to 16105, 2 points higher than the 50% retracement area.

Our stop is immediately hit, so we wait and see if price will reverse again off resistance or actually break out.

Price settles at the 16092 area. A rally that is reversed at a minor resistance area gives us another opportunity to go short at 16101, with a stop at 16115 to be on the safe side.

Selling pressure forces price down all the way to the previous day's hinge midpoint where climactic action makes us close our short at 16074.

The lesson today is that it's probably better not to initiate any trades pre-market and wait for the main moves once the market opens.