Obrisuem situation - you've done your analysis and the expected breakthrough of the range. You may even define such a model as "head and shoulders" or "double bottom". Either way, you are on the trade and just wait for movement.
Say you saw a box and waiting for a breakthrough border. You installed your order in a way that in the event of a breakthrough, you will automatically face a long position. You sell at the time schedule and check it often enough to see, was there any movement.
Suddenly, the market is beginning to circulate a warrant for the purchase of your works and you are faced with a long position. You begin to follow the market and makes sure that your stop-order on the ground. Then suddenly the same bar, which has started to earn money for you turns and moves back.
As the market goes down, you know only that he was going to close your position on a stop-order and he does it. Now you no longer position. You begin to explore the market in search of a new position: but wait - you just missed a good opportunity.
This article will be presented to a good way to profit if the trader is wrong. This is the theory. Most traders think a one-sided in the trade. They see the position and this position is for them only. Once they decided that they would go into a long position in the break, they stick to this idea. This is especially true with clear technical levels like the 52-week maximum or minimum. It may even be a trend line or a graphical model. If you sell one or two markets, then you understand what is at stake. Even though you do not have to listen to other traders, you probably will have a correct idea of where the main levels of support and resistance, which sees each.
Also, keep in mind that trade allows to study human behavior than anything else. Once one of these large levels of breaks, then everyone will try to get back on the right side of traffic.
When the market is not doing what you expect from him, perhaps there is an opportunity to act in the opposite direction.
For example, take a look at the bulk of traders, who stood in long positions in the break and got the motion in the opposite direction. Some of them will be stopped for a stop-orders, some traders - kamikaze, faced with a stop-orders will be with great interest to monitor the monitors.
To use this situation to their advantage, we need two plans - Plan A and Plan "B". As you already guessed the plan "A" is to go with the bulk of traders: if the market performs a breakthrough in the direction in which you are first supposed, then you have the entry point to the position, the restriction of losses and probable purpose of the withdrawal profits.
Plan "B" is that if the market is moving in another direction, then you also have a plan.
The graph above you can see that we have a descending trend, accompanied by a consolidation. The market initially went down to form a support and then turned to the upper trendline.
Very often, after the consolidation should be a breakthrough in the direction of the trend, so in this case it would be logical to expect that a breakthrough will be down. In this case, we find ourselves in the short position with a stop, probably at the level of resistance and the calculated aim at the bottom at a distance from support to resistance.
Here's what happened zatem.sleduyuschy bar has become a turning
Rather than continue to move down, the next bar was a turning.
Note: For two - periodnogo turn up, the first period should be at the end of a strong downward path. The closure should be close to the minimum of the period, and preferably to a minimum, this is a new minimum of the latter. The second period should be open about the closing of the first period, and should restore most, if not entirely, the first loss period and the close near the maximum of the first period.
So now the market does the exact opposite of what we expected. Being opportunists, what should be all good traders, we are closing a short position and open a long position with a stop order below the minimum abortive breakthrough.
Now we are in a long position with the restriction of the loss, but we need a goal. The first goal that we set, will the previous resistance level. The reason we chose this goal is simple. We can enter into a long period of consolidation and price may vary between support and resistance.
However, since a failed breakthrough came with two - periodnym turn, we could hold a long position and see what happens at the level of resistance. Depending on market conditions, we may also add to their long positions.
Most importantly, always be prepared to use what is happening in the market. When you see a failed attempt to break through the trendline, the levels of support / resistance, or the graphic model, you should plan to take action. Do not just watch it and use it to their advantage.
There are some traders who trade only in this way. They are looking for easily discernible graphical models, which will see each and use the motion failed.
Say you saw a box and waiting for a breakthrough border. You installed your order in a way that in the event of a breakthrough, you will automatically face a long position. You sell at the time schedule and check it often enough to see, was there any movement.
Suddenly, the market is beginning to circulate a warrant for the purchase of your works and you are faced with a long position. You begin to follow the market and makes sure that your stop-order on the ground. Then suddenly the same bar, which has started to earn money for you turns and moves back.
As the market goes down, you know only that he was going to close your position on a stop-order and he does it. Now you no longer position. You begin to explore the market in search of a new position: but wait - you just missed a good opportunity.
This article will be presented to a good way to profit if the trader is wrong. This is the theory. Most traders think a one-sided in the trade. They see the position and this position is for them only. Once they decided that they would go into a long position in the break, they stick to this idea. This is especially true with clear technical levels like the 52-week maximum or minimum. It may even be a trend line or a graphical model. If you sell one or two markets, then you understand what is at stake. Even though you do not have to listen to other traders, you probably will have a correct idea of where the main levels of support and resistance, which sees each.
Also, keep in mind that trade allows to study human behavior than anything else. Once one of these large levels of breaks, then everyone will try to get back on the right side of traffic.
When the market is not doing what you expect from him, perhaps there is an opportunity to act in the opposite direction.
For example, take a look at the bulk of traders, who stood in long positions in the break and got the motion in the opposite direction. Some of them will be stopped for a stop-orders, some traders - kamikaze, faced with a stop-orders will be with great interest to monitor the monitors.
To use this situation to their advantage, we need two plans - Plan A and Plan "B". As you already guessed the plan "A" is to go with the bulk of traders: if the market performs a breakthrough in the direction in which you are first supposed, then you have the entry point to the position, the restriction of losses and probable purpose of the withdrawal profits.
Plan "B" is that if the market is moving in another direction, then you also have a plan.
The graph above you can see that we have a descending trend, accompanied by a consolidation. The market initially went down to form a support and then turned to the upper trendline.
Very often, after the consolidation should be a breakthrough in the direction of the trend, so in this case it would be logical to expect that a breakthrough will be down. In this case, we find ourselves in the short position with a stop, probably at the level of resistance and the calculated aim at the bottom at a distance from support to resistance.
Here's what happened zatem.sleduyuschy bar has become a turning
Rather than continue to move down, the next bar was a turning.Note: For two - periodnogo turn up, the first period should be at the end of a strong downward path. The closure should be close to the minimum of the period, and preferably to a minimum, this is a new minimum of the latter. The second period should be open about the closing of the first period, and should restore most, if not entirely, the first loss period and the close near the maximum of the first period.
So now the market does the exact opposite of what we expected. Being opportunists, what should be all good traders, we are closing a short position and open a long position with a stop order below the minimum abortive breakthrough.
Now we are in a long position with the restriction of the loss, but we need a goal. The first goal that we set, will the previous resistance level. The reason we chose this goal is simple. We can enter into a long period of consolidation and price may vary between support and resistance.
However, since a failed breakthrough came with two - periodnym turn, we could hold a long position and see what happens at the level of resistance. Depending on market conditions, we may also add to their long positions.
Most importantly, always be prepared to use what is happening in the market. When you see a failed attempt to break through the trendline, the levels of support / resistance, or the graphic model, you should plan to take action. Do not just watch it and use it to their advantage.
There are some traders who trade only in this way. They are looking for easily discernible graphical models, which will see each and use the motion failed.
Mark McRee
based on daytradingcoach.com
based on daytradingcoach.com
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