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I could not identify too many good opportunities in real time today. The good news is I entered the best move, just couldn't hold for the the bigger gain. Took one breakout and one pull back trade. One win, one loss.
We are near the year's high again, with a lot of past heavy trading above and below. The macro trend is still up, but considering that price has retraced almost all of the previous resistance areas, we could have a change of direction back to the downside. If it holds above 49.56 it's blue sky for a while.
Right now trading in either direction will require patience. Price will encounter difficulties until there is clear momentum. Look for breakout trades after clear impulse moves, or pull back trades to strong S/R levels, with good potential reward.
I am going to attempt to start categorizing trades in an effort to better determine probabilities of success.
Update: end of day. Price had significant reactions off two areas identified
I was finally able to make and keep some decent gains. Three of the four trades made it to 1R. Two of them made 2R.
Switched to sim after the fourth trade and made more gains experimenting with scaling in to positions. While it was a fun exercise, scaling in will be for the future with a larger account. By the time a full position is on, the risk per trade is just too much.
Continued up move overnight above the year's high.
To the upside: No reason it wont continue up. The difficulty will be choosing a place to get on board. I'll need to wait for either a strong breakout or a return to a previous support area, then continuation.
To the downside. wait for obvious topping action followed by a strong impulse move with energy before considering shorts
Update, mid morning: had some reactions off the blueprint levels. Now it appears they want to take it to the 49.07 area. My bias long for the morning kept me from getting anything on the down move. May be a no trade day.
It is kind of messy on both sides of the equation today. I can see no clear destinations up or down. The trend is down for now but we're at a place it could turn. It'll be important to wait for some obvious action before taking risk.
Update, pre Yellen: price ended up bouncing from the first support level to the first resistance level. Yellen's comments may not do anything but just in case, here are the possibilities:
I have dabbled in this from time to time at clear S/R areas, but it is counter trend, which I tend to stay away from unless I am really confident the trend is over. Going counter trend has rarely worked out well for me.
The key is the "multiple encroachments and hits" which sort negates it as being an impulse move anymore. Now it becomes more of a double top/bottom or lower high/higher low situation. Without that conformation I would tend not to fade it. If I was in a trade in the direction of the impulse, this action might cause me to bail on the trade though. I suppose I could then consider the other direction.
Thank you for the thought provoking questions. It is always good to have to think about what you are really trying to do from time to time.
I do not trade directly off of the LVN's or HVN's. Rather, I use them as reference points for anticipated pausing or reversal areas to be aware of. I guess they are all part of the big "soup" of clues I use to figure out where price might be going next.
