Question: If SP futures fall through support and fall directly by two other points, I want to go short, I should. ] Enter immediately, b. ] Support the two points below, or c. ] Should I wait for a pull back and try to short?
You have to wait patiently for an entry with two things: from
the first from
- the probability of immediate benefit is high, and from
second from
- If the worst happens and your hard stop is hit, the chance of loss is small. This principle applies to all entries, and it is useful to consider when you are trying to decide whether to enter a callback or continue moving.
The dollar risk offered by entering the callback is lower than the risk of chasing the market, because you can place your stop loss on the other side of the support or resistance level and only take one or two risks. [Of course, this doesn't mean you will be embarrassed, if the problem arises, the market will be hit hard.]
Entering the callback also gives you a greater chance of getting a point around the first 30 to 60 seconds of the trade. This is important, although few people seem to be talking about it.
I rarely [almost never] chase the market. This is why......
Normally, if you chase into the market, you will be filled up when the crowd is exhausted. The market will back down and you must leave immediately [if you are smart]. On the other hand, if you are stubborn and you don't leave immediately, you will have to put up with this callback. hope The trend continues until your stop loss is hit. If the market is close to your stop loss, you will be tempted to move the stop loss a little bit. Once you succumb to temptation, you have an expensive trading habit that may get you out of business.
Whenever you find yourself look forward to The market will come back to get you out of trouble, you really have to go out just now . Don't even consider commissions, or wait for all the time set. Just went out!
Question: What if there is no callback?
If the market breaks through the support and continues to fall without a callback, then you must be disciplined and let go. All lost opportunities in the world will not lower your account balance, but chasing high-risk, low-probability items will cost you.
In addition, market trends rarely last too long before a counter-trend reaction occurs. If there is a dynamic action, I will focus on the 1 or 2 minute chart and use dynamic support or resistance guidance. A good guide to trading strong trends is the 15-cycle simple moving average on a 2-minute chart, and/or the 9- and 18-period exponential moving averages on a 1-minute chart. When they "describe" price behavior, they can provide good participation in solid mobile actions.
Orignal From: Day Trading Index Futures - How to judge good entries
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