TL Bounce Swing Trade
So now we move on to another swing trade.
The market moved in nice smooth proportionate looking swings whilst making it's 1st Lower High, Lower Low scenario, the 2nd wave of movement down does not indicate that the momentum is slowing.
A single TL was drawn (please ignore the TL zone as that applies to the next trade using this same image)
The 3rd hit on that TL was also confirming a Resistance area that was created during the previous wave of selling. It lines up perfectly with the TL, and SR box and gives a place to enter, a place for your SL, and the ability to judge RR before you enter the trade. I will go over that in the next post
TL Bounce Swing Trade.. cont
In this example since we have our confirmed Resistance area at the predictive TL and we have our SL.
Using Candlestick patterns the 1st entry opportunity is the IB after the PB.
The black area is an intelligent area to move your SL to BE based on recent historical price action
The Conservative TP is an equal low minus any spikes that stick out by themselves.
Now we can judge RR which as you can see in the picture is greater than 1:1
Notice how I say conservative TP, what I mean is that clearly we are expecting a Lower Low, The waves of movement down have not lost momentum yet, so the RR will be much better in fact.
But if we assume the worst we have locked in Break Even at the next logical place for price to possibly create a Higher Low and we base our RR on the safe outcome of at least an equal low to be conservative. This way if we always look for 1:1 as a minimum TP based on conservative logic but we more often than not will always exceed that 1:1 RR
As I mentioned before the gray boxes on my chart are Support Resistance areas, but I only have a limited number above and below price at any one time so for that previous trade there were none there.
For this next TL bounce trade using that same picture the gray boxes are there as they were in real time.
In this next trade the confirmed TL zone was not quite reached but a nice Resistance box was created as price headed down on that previous wave, the previous wave of selling was much greater in power than the first 2 waves of selling indicating increased momentum.
The chances of another wave of selling were high so once a Resistance box close to the TL zone was confirmed by that 2nd visit there....
Candlestick patterns were all that was left to wait for.
2 Pinbars side by side was a nice touch and the trade now had an entry point, a SL point, a conservative TP point to judge RR, and an intelligent place to move your SL to BE based on historical price action.
It was just about 1:1 RR at the conservative TP so all systems go.
In this pic though I also marked out a more likely TP that you would have shot for when you saw those nice red candles gaining strength on each one
That should be a fair bit of information for you to go and spot these 2 setups on your charts both live and backtesting.
I will wait to see if there are any questions before I move on
Is IB Inreactive Brokers?
Hello, Re: Permalink No 23, u refer to the 'IB' after the PB. U have already defined 'PB'- Pin Bar. What is a IB? Also u never refer to Pull Back as 'PB' do u? Otherwise all seem quite unambiguous. Thank u again.
The acronyms are certainly many and I'm sure everyone will have their own
IB = Inside Bar
PB = Pin Bar
Pull = is what I use for Pullback
Not too much interest here.. please click my username and visit my homepage for more lessons
Too bad not many are interested in your trading style. Visited your website and it is good knowledge to learn. I simply love price action trading.
For those interested to see my journal on Price Action Trading, feel free to click my username too and visit my homepage . You may get free signal from next week, which may lead to profits or loss
You are not right:
You are having 2,201 views for only 28 posts and it is very good.
I mean: 2,201 members considered this thread as interesting ...
So, it is up to you - keep them inside/around yourself, or ....
If I delete this thread so no one will go to homepage anymore from tsd forum
So, I am suggesting to you to keep your thread to be alive. As to your home page so you can place it as the signature to your posts (in case - you will continue with the thread here on tsd).
Lets pray this thread will continue