This market is for range traders, not for strategic trendfollowing.
It is volatilie and choppy -> this itself is some kind of proof that we are not in a normal bull market phase any more. Doesn't mean we can't have one more blow off top, but regular bull markets have smooth price action, not this .
Do you want one more proof that this market is not despite last one week agressive price action? Then just look at components:
- Tenkan points down and is still below Kijun
- Tenkan and Kijun both below Kumo
- Forward Kumo is bearish: Senkou A points down and is below Senkou B
- Kijun (26 days average) and Senkou B (52 days average are flat at same level: 2058,71
Obviously this is all due to the extreme . And of course at the end of the day Price pays only, and price is above all averages now.
We also see a broadenning pattern in price action: this can lead us to both and scenario, or it may drive everybody crazy for next few months keeping the same and build the pattern further towards a Diamond top. In this latter case, assuming we are in the middle of a possible diamond patter, that would take another 3 months to complete.
As you see, there are lot of uncertanity and probably hard times ahead for both Bulls and Bears. The only major and general difference between the two camps is that I think there are less bears than bulls, and bulls never really believe it can go wrong ever. Most of them they will get hooked up once.
My advises now:
1. try to trade smaller as is higher. Try to use extremely wide stops.
2. Also try to enter shorts at possible upper resistances, or longs at supports.... but with longs I'd be very cautious any time. One day there might be a huge gap down.
3. Try to follow Heikin-Ashi rather than rules alone. was designed as a real trendfollowing system. As you see, in rangebound swinging environment it just can not work very well, and causes you a lot of headaches through whipsaws.