Tuesday, July 17, 2012

The ideal price action


I have mentioned wide channels with narrow slopes as the most dangerous price action. In contrast, a steep narrow trend with clean bars and no overlap of swings is probably the safest price action and the most profitable.

Clean signal bars (b2) leading to large trend entry bar (b3), with good follow through (b4), shallow pullback that does not overlap prior swing (b6), these are the mark of a very clean and easy day.

On such a day, there are few traps. All signals probably work when strong. The W reversal at b16 or the fL2 at b25 for example, while definitely grounds for suspicion on most days ended up working despite the weak close and overlap.

Until the price action finally became choppy after lunch, the action was clean and clear. If you encounter such a day, take any with-trend signal since it probably will succeed. When possible swing at least one contract to a decent profit.

These days are rare, so make the most of it.

2 comments:

  1. Hi Cad,

    Wasn't it a bit risky holding b2 trade all the way through the report at b7?

    ReplyDelete
    Replies
    1. Once my scalp is filled, I err on the side of swinging

      Delete