Is a buy setup for ES 1 point below a valid resistance level as good as one 1 point above a support? It's this assessment that is part of the thought process when considering whether to trigger a setup. But what if the momentum is abnormally strong on the buy side and the volume delta is very much above the zero line? Does that change things? Do we ignore the resistance? Or do we take the trade and watch what happens at resistance? Is it normal for it to hit resistance the first time and pullback or should it go straight through?
What this post is saying that a setup can be more than one setup depending upon the context or maybe in a certain context the setup is not a setup at all.
These considerations were too difficult to address in a blog but reverse engineer the trades and comparing them, doing the back testing, many of you found the answer to these questions. Many of you have also created chart signals from these setups and have gone on and created autotrading robots.
While this is discretionary trading at it's purest, many of us like to structure our setups to make it more mechanical in search of the ability to make repeatable trades in order to achieve a consistent outcome.
This can and is being done, but at a price. The price of a lower performance. But perhaps the certainty that comes from consistency allows trade size to be increased above what otherwise would be achievable by a trader and thus increase nett monthly dollar performance.
Starting point for me is creating the setups. In the training I'll be able to do what I can't do in the blog, show the step byhow I find these and use all my own setups as examples. As I said, the setups are important but the magic is learning how to evaluate them against the context and then to decide whether or not to trigger them or not. This is discretionary.
Today is the May Day holiday in the U.K. In olden times they used to dance around the maypole but I haven't see that at all since I've lived here. No trading for us.
Starting point for me is creating the setups. In the training I'll be able to do what I can't do in the blog, show the step byhow I find these and use all my own setups as examples. As I said, the setups are important but the magic is learning how to evaluate them against the context and then to decide whether or not to trigger them or not. This is discretionary.
Today is the May Day holiday in the U.K. In olden times they used to dance around the maypole but I haven't see that at all since I've lived here. No trading for us.
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