Graviton, below is a chart attached on a “so called” trend line break fake out i had.
Clearly we have 2 trendlines here, is the first one on the left valid? Or should we actually draw the trendline from the earlier point, meaning the trendline on the right?
I took the trendline break on the left one, but i got stopped out. I see it happening quite often, but then again that was during the news.
[B]I’d have to see the lower timeframe to see these trend lines more clearly. They are barely little blips on this scale. If you are looking at retracements on the 4H chart, drop down to the 1H chart to see them more clearly, unless they are very long ones that show up clearly on the 4H chart. This time frame is ok to see the longer trend channel you’ve drawn in, but it’s too compressed to see the detail of the retracements within that channel. If you enter only after the full body of a candle is below the trendline, you do not get stopped out. If you entered earier, yes, that long spike wick will probably stop you out. I imagine that long wick is the result of news. Better to not trade during news if possible. [/B]
So my qns would be, is my first trendline drawn on the left valid?
Upon breaking it went upwards again forming a new low. Thus a 2nd trendline could now be drawn. Either trendline could be valid, or not. I probably would have drawn the first one from the earlier point, but it only had two touches early on, so it’s not to meaningful. I would have drawn the second one later too. So I believe the one you called second would have really been drawn first from the earlier point, but with only two touches, it wouldn’t be considered valid until it was touched a third time much later.
So how do i go about such situations?
[B]Yes, they are both valid, but one, the one generated by the earlier candle, only has two touches in the begining. It gets a third touch, but that’s much later. Trade what you see. But I can hardly see anything on this compressed scale. I wouldn’t pay much attention to a trendline with only two touches. It’s a maybe trendline and needs a third touch to validate it.[/B]
And also, you mention upon a close of candle below the retracement line you will find an entry in the 15mins.
When you look down into the 15mins TF, it most prob would be in a sausage or bubble, so you enter per break out rules? Or do you wait for a slight retracement and get an entry?
[B]For a 4H entry, I’d want to see a 15M retracement and then enter at the end of it with price starting to move in my direction to enter. That’s an ideal situation. I won’t always get it and will sometimes just enter on momentum, or any other valid lower TF signals, like a valid breakout or cbl. That’s riskier and it’s a judgment call.[/B]
These are some of the problems i faced now. Sometimes the trendline gets broken, however i wait for a retracement move, sometimes it never comes and i missed almost the entire move.
And i recalled ytd you took long AJ on the 1 hr cbl. May i know the reason for it? I couldn’t think of any, besides that the long wick provides a very good support level since way back.