Back to support ? Never buy under a resistance ! - LDTP #10
Updated
Let's do the point !
Some was calling to buy under resistance, in a compression area, but unfortunately that how you buy a top. And I hope that the work I've done in the LDTP #9 avoided you to do that cause when I see all the trending ideas which called to buy "NOW ! " I understand that it could be easily to be emotionally trapped. I will always remind that it's better to be late in a trend than early in a trap. I prefer to buy $55,000 to $60,000 or worse if there is no way to enter late I prefer to see it run without me in respect of my strategy than a buy at $47,000 under resistance, making money in trading isn't playing coin flip.
Having said that, now that we have a selling volume we have a completed pattern under resistance which is typically an entry signal. You know that I don't short so I will developp it in another idea, if it's interest you follow me to know when it's comes out.
In contrast, we have a long position since the LDTP #7, I'm closing it because we have an opposite signal ON THE SAME TIMEFRAME UNIT, which invalidate our first entry. Also we have that short edging position since LDTP #9 (monday) which reach his target. Because of the complete pattern, I will only close half of the position and let the rest run (stop loss breakeven too). I remind that the goal of an edging position is to retake your loss exposure, so as I close my first trade I don't have loss exposure anymore so it would be fool to don't exploit that edging position to is maximum by letting it run now. Even if a retest of the resistance can make us exit breakeven it's important to exploit the fact you entered early / high.
I hope that now you can understand the power of edging your position and not give way to emotions.
Let's do some maths : if I had cut my position instead of managing it monday, I would have taken as profit 0.48 of my exposure (so R/R 0.48) while taking the risk to had true an see it reach target without me and so develop frustration. On a standard edging position here I take 1.00 of my exposure without closing the first one which could bring to a final result of 0 (edging position +1 initial position -1 in case of a loss on the first one) or 3 (edging position +1 initial position +2) because the goal is only to cover the loss exposure. And here because of the context and the opposite signal I take already 0.79 of my exposure (0.5 of edging position + 0.29 of initial position), by letting the rest run I can take up to approximatively 6.79 (which is the final target = return on support at approximately $36,000 (50% of 12R/R + 0.79 actual R/R) and furthermore my position is breakeven which mean I cannot take anymore loss. That in anyway better that if I had gave way to emotions. (I hope I didn't lost you AHAH)
"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"
Learn to open your mind to multiples possibilities to improve yourself, don't be fix in an idea, always explore multiples approaches while respecting your strategies.
In term of future expectation, we are actually entering back in the imbalance. Generally, the first run, when it's not a breakout, is rejected. So we can expect now a little consolidation which could bring to a retest of the resistance before to come back and fully fill the imbalance. After working in it we want to see price breakdown to the support like expect the Wyckoff pattern. All my fears are always of actuality speaking of this pattern, I invit you to go check the relative idea where I exposed it. To note that if we go for a spring in this cycle we expect price to go strongly to the support now.
In the case we going back to the resistance after fully filled the imbalance, we can expect a 1,2,3 breakout of the resistance to leave the wyckoff pattern and the short pattern. In this case, I expect a one sided run which mean a return straight to $66,000 - $68,000 without consolidation, but we have time to see it come for the moment and in term of probability I'm staying in the way of what we have and for the moment it's a short pattern in a Wyckoff pattern.
Let me say that : Imbalances don't lie, Wyckoff don't lie, Supports / Resistances don't lie, Volumes don't lie, Price action don't lie, whatever your strategy if it is mathematically reliable it doesn't lie but premiums scams lie. Whenever who you want to follow, whenever who you want to support, whenever who you want to believe, always verify that he doesn't provide public payable services where your person serv his own interest. That probably the best advice I can give you. You will need to surround yourself to progress in trading, that a fact, but don't be the food of this guys. This game is full of scavenger.
Like, follow or comment* if you like, I need it to continue !
*Speaking of comments, come ask questions, come share your point of view, come debate, I need to feel that my without counterpart work is usefull for some !
NB : Of course there is always 2 hours before close if there is a strong buy before the close it could invalidate the short signal, that why I will post it only after.
Some was calling to buy under resistance, in a compression area, but unfortunately that how you buy a top. And I hope that the work I've done in the LDTP #9 avoided you to do that cause when I see all the trending ideas which called to buy "NOW ! " I understand that it could be easily to be emotionally trapped. I will always remind that it's better to be late in a trend than early in a trap. I prefer to buy $55,000 to $60,000 or worse if there is no way to enter late I prefer to see it run without me in respect of my strategy than a buy at $47,000 under resistance, making money in trading isn't playing coin flip.
Having said that, now that we have a selling volume we have a completed pattern under resistance which is typically an entry signal. You know that I don't short so I will developp it in another idea, if it's interest you follow me to know when it's comes out.
In contrast, we have a long position since the LDTP #7, I'm closing it because we have an opposite signal ON THE SAME TIMEFRAME UNIT, which invalidate our first entry. Also we have that short edging position since LDTP #9 (monday) which reach his target. Because of the complete pattern, I will only close half of the position and let the rest run (stop loss breakeven too). I remind that the goal of an edging position is to retake your loss exposure, so as I close my first trade I don't have loss exposure anymore so it would be fool to don't exploit that edging position to is maximum by letting it run now. Even if a retest of the resistance can make us exit breakeven it's important to exploit the fact you entered early / high.
I hope that now you can understand the power of edging your position and not give way to emotions.
Let's do some maths : if I had cut my position instead of managing it monday, I would have taken as profit 0.48 of my exposure (so R/R 0.48) while taking the risk to had true an see it reach target without me and so develop frustration. On a standard edging position here I take 1.00 of my exposure without closing the first one which could bring to a final result of 0 (edging position +1 initial position -1 in case of a loss on the first one) or 3 (edging position +1 initial position +2) because the goal is only to cover the loss exposure. And here because of the context and the opposite signal I take already 0.79 of my exposure (0.5 of edging position + 0.29 of initial position), by letting the rest run I can take up to approximatively 6.79 (which is the final target = return on support at approximately $36,000 (50% of 12R/R + 0.79 actual R/R) and furthermore my position is breakeven which mean I cannot take anymore loss. That in anyway better that if I had gave way to emotions. (I hope I didn't lost you AHAH)
"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"
Learn to open your mind to multiples possibilities to improve yourself, don't be fix in an idea, always explore multiples approaches while respecting your strategies.
In term of future expectation, we are actually entering back in the imbalance. Generally, the first run, when it's not a breakout, is rejected. So we can expect now a little consolidation which could bring to a retest of the resistance before to come back and fully fill the imbalance. After working in it we want to see price breakdown to the support like expect the Wyckoff pattern. All my fears are always of actuality speaking of this pattern, I invit you to go check the relative idea where I exposed it. To note that if we go for a spring in this cycle we expect price to go strongly to the support now.
In the case we going back to the resistance after fully filled the imbalance, we can expect a 1,2,3 breakout of the resistance to leave the wyckoff pattern and the short pattern. In this case, I expect a one sided run which mean a return straight to $66,000 - $68,000 without consolidation, but we have time to see it come for the moment and in term of probability I'm staying in the way of what we have and for the moment it's a short pattern in a Wyckoff pattern.
Let me say that : Imbalances don't lie, Wyckoff don't lie, Supports / Resistances don't lie, Volumes don't lie, Price action don't lie, whatever your strategy if it is mathematically reliable it doesn't lie but premiums scams lie. Whenever who you want to follow, whenever who you want to support, whenever who you want to believe, always verify that he doesn't provide public payable services where your person serv his own interest. That probably the best advice I can give you. You will need to surround yourself to progress in trading, that a fact, but don't be the food of this guys. This game is full of scavenger.
Like, follow or comment* if you like, I need it to continue !
*Speaking of comments, come ask questions, come share your point of view, come debate, I need to feel that my without counterpart work is usefull for some !
NB : Of course there is always 2 hours before close if there is a strong buy before the close it could invalidate the short signal, that why I will post it only after.
Note
Want to read more ?Here you can find the initial Wyckoff accumulation pattern idea and why I don't like this one.
Trade closed: target reached
Edging position reached the support == 6.5+ R/R
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