Keep an eye out here what happens here at this bearish inflexion point. Could be an important level. Watch for the retest to get your confirmation on direction in the short term.
If it's a stop run, you'll see fading lower highs from here before rejecting the level.
If it's a breakout, you'll see higher highs and candles opening above the descending channel. Could move quickly to the top of this longer term ascending channel.
To close to call at this point. I'm leaning to stop run because the volume is so light. Definite short term uptrend still holding. This should be the first close back above the trendline after giving it up.
Will wait for the retest result to calibrate my trade direction from here. Great spot to watch.
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I'll talk about a lot more trades than I take for you guys. I don't really like this trade right now but just to illustrate the risk:reward shots I like.
If you had bearish expectations for this move and wanted to get in front of it that is where I'd be trying to hit. You have to account for stop runs so maybe a variation of this idea.
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Better chart? Better trade for active guys than swingers. Seems crazy to sell into but that's probably validating. Volume is ticking up but we put in that range on really light trade. Would be easy to give back.
Still shopping.
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That probably would have been a fill if you were trying to get in front of a short with this strategy.
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Initial thoughts for long breakout positioning. Same kind of trade we've been talking about on the long side.
If I were active I might just take both of them given the R expectancy. For now I'll wait for as much confirmation as I can so I only have to take one.
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Both of these are just illustrations of the types of R:R trades we'll be looking for. You could take either but the actual spots should be determined by what the market is giving you, not my projections here.
For now I don't have enough of an edge and I don't want to play both. I'm waiting for a confirmed retest for more clues.
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There's the stop if you took that short trade we talked about above.
I don't think we got filled in that long trade yet.
I'm still shopping but not afraid to let this go if I don't see anything.
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So if you've followed me long enough I usually take 1 in 5 winners. If you're keeping score at home our system expectancy in the last couple days (including that loser above here):
// 6 trades // Winners 2.5 // Losers 3.5 //
If our winners yielded minimum 5R and our losses took only 1R, we definitely are making money on this system. We're batting nearly double my average here though at 40%. I plan for 20% over time.
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Next thing to watch is where this down leg finishes. That's going to give us a bit of insight. If it's a higher low we'll look at bullish continuation and bearish if there's a lower low.
Whichever it does, we should get some insight on direction and entry range.
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Sorry, no edit. That chart above is a duplicate. This is the one i was talking about.
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BAH. Daft. This..is..it?
Nothing I'm really even trying to show here besides it's coming back and testing these local lows.
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Well that's a fill on the long we talked about above. Looks like a good position going into a test of this resistance but I'd be taking profit all day if it's going to keep rejecting the inflexion point (red channel).
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Sorry guys, still getting the hang of TV ideas.
Here's a clearer chart:
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This is what I mean by good position going into the test. Now we're well broke of it and you have a bit of cushion.
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Expectancy is batting 50% right now on this system with that long. Won't plan for that to hold over time but if you're properly executing the system and averaging 5R winners, you're making money.
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That long position we were talking about is just about at target
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That long just hit target.
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So guys I'm going to close this out as missed. Got a couple trade ideas in there for conversation sake but nothing screaming jumped out that I would have been banging the drum on.
I think this is a good trader journal. I'll talk about all my trade ideas on here, a lot more than I actually take for my risk parameters. If I see something screaming, I'll try and call it out and keep track of those trades.
I'm also just a hobbyist so sorry if there's gaps. Let me know if you're finding anything useful or missing.
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I think it's also a good idea to keep track of the system. Let's exclude my bias and track all the trades we talk about, whether I endorse them or not.
You can see the breakdowns below but the system is 43% for 8R winners since May 30. Expect regression, especially if the market stops giving us range.
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I think we can put the title to bed here as well, definite breakout. Love it. Welcome back BTC
Just to give you a break down of how some of these trading are starting to add up that I've been publishing. Sorry, can't seem to figure out formatting. //
+ short 5R (should be minimum 15 but didn't document it more than on my blog)
+ short 10R
- short R (correct direction, bad entry)
- short R (reversal, shorted the bottom)
- short R (range breakout)
- short R (range breakout)
+ long 8.5R (if you take this now)
//
7 trades, 3 winners, 4 losers. = ~43% winners @ avg ~8R return // Your break even is 20% winners @ 5R // The hard part of this is is execution but even if we regress to 20% winners as, if you hold 6R you're still making money.
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Oh, okay, these have formatting.
So my theory is at these pivotal spots, you're odds are basically a coinflip for a full stop or minimum 5R trade.
Odds have no memory though. You can be wrong 100 times in a row and the next roll owes you nothing, it's still a coinflip no matter how you cut it.
If you're using popular technicals, you can see recurring patterns with >50% expectancy. This expectancy is formed from a sample size of millions of recorded events in the public domain. I say this because if you're trading to expectancy of a couple proven signals, the odds of both being wrong 5 times in a row is very low.
That's why we plan for 1 in 5 winners on these spots. You're not trying to predict the market. You're just entering on expectancy. Which is currently 43% winners @ 8R with proper execution.
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If you have a system that's only 20% predictive putting you in positions with 50% odds, the chances of losing 5/5 or even 10/10 are low. If we're targeting 10R, but taking even 5, that's really leveraging coinflips over long periods of time.
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Some updated numbers after that long hit target:
+ short 5R (should be minimum 15 but didn't document it more than on my blog)
+ short 10R
- short R (correct direction, bad entry)
- short R (reversal, shorted the bottom)
- short R (range breakout)
- short R (range breakout)
+ long 10R
Still ~43% @ ~8R.
Coinflips with a 43% chance that your winners are 8 times bigger than your losers...
That will regress but you can see the system thoughts here.
mfkzt_2
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Oh yeah, keep in mind, this assumes perfect execution. That really means disciplined trading. Chances are over this sample, many of us are not taking straight 1R losses. 2R, 3R and more are very common. But when you trade with a system you have to find a way to eradicate these.
Shit happens. Blowouts occur. Keystrokes errors happen. Every penny beyond your R threshold taken however is a ding against the system expectancy. Over a large sample, if you have a plan, you should not be taking average 2R losers. Not even 1.5.
It's all about discipline and while outliers occur, your ability to execute is a prerequisite to any plans we discuss.
mfkzt_2
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That long position we talked about is just about hitting full a 10R target.
+ short 5R (should be minimum 15 but didn't document it more than on my blog)
+ short 10R
- short R (correct direction, bad entry)
- short R (reversal, shorted the bottom)
- short R (range breakout)
- short R (range breakout)
+ long 8.5R (if you take this now)
//
7 trades, 3 winners, 4 losers. = ~43% winners @ avg ~8R return // Your break even is 20% winners @ 5R // The hard part of this is is execution but even if we regress to 20% winners as, if you hold 6R you're still making money.