Thursday, June 26, 2008

Trading Price Action Setups

6-25 721.10 High: was there a base setup that occurred after the russell high to be short by the last bar on this chart --- IF yes what-where - IF no what was the first base setup to the right?



the price action area prices in this area were 719.70-720.40 - 721.20 --- the 721.10 made a 721.20 test pmd high AND then made the initial reverse-went into consolidation between the high AND the 719.20 low between the momentum high-price high.

720.30 double test-reject of the 720.40 paa price - i would have liked to have sold the 719.70 paa price break AND didn't react - then selling the reject into the inverted diagonal failure break of the 719.20 price = 719.4030 fill.

this was a very good previous price-price action trade setup combination BUT the setup was also 'masked' by using the fast chart which is a typical situation during consolidation periods where price overlaps and loses pattern-clarity.

use a faster chart for timing - for directional resumption OR during 2-way market periods where there is swing slope and you can continue to see setup clarity --- BUT don't use a faster chart simply because you think you will be able to enter earlier - what you might do instead is hide some of the best available trade setups.