How would you play this setup?

[Neoripley]

(EDIT: Don't know why I chose to run poll for 8 days - so will probably reveal the rest of the chart on Tuesday ).

Just for fun, I thought it might be interesting to create a poll based on how members of the forum would choose to trade a particular setup.

Of course, this depends on whether anyone will participate but the aim is really just to see how members of the forum would vote and also might offer some valuable insight into your own trading.

I'm not saying these levels are absolute, but I do know the outcome, and I will reveal it when the poll expires. So please vote. Comment on your reasons as well if you like. Also, are there other levels you would consider at this point in time?

p.s. in the poll, instead of 'sell/go short' I've said 'enter a sell' for the sake of SB

I HAVE INCLUDED a 20SMA, VOLUME, A/D LINE AS THE ONLY INDICATORS and a TRENDLINE (my interpretation of).

EDIT: APOLOGIES - in the poll I refer to upper/lower green and red 'bars' but I meant the HORIZONTAL LINES THAT I'VE DRAWN IN i.e. upper green LINE, lower green LINE, red LINE (got bars on the brain, obviously .)

If you see another POTENTIAL setup, please share. It's just for fun (and a public poll, no private agenda).

 

[TAjammy]

see no setup! no way of knowing whether price will bounce of the MA ot not IMO

 

[Neoripley]

see no setup! no way of knowing whether price will bounce of the MA ot not IMO

Yes, but if you were a buyer at the break of the upper green line for example, wouldn't price have crossed the MA by then? You have a choice of three entries.

 

[1Pipped]

By the time that setup occured, Ide probably have been short and stopped out to the exact tenth of a pip by the news whip, turned computer off in disgust and gone playing darts instead.
Hang on a minute ....

 

[squall321]

need other timeframes

 

[Geofract]

FWIW, there is not setup for me, because I don't consider there is enough information for me to make a decision given my trading style.

If anything I would be looking to sell, but not at the current level, and not below the red line either. I would have to re-asess the situation when the market got to a level that I might like to sell at, because at that time, the signal could have changed.

So for now, no trade

 

[vinicius]

This is a long.. Taking off the highs...

LH with a very bullish pin bar followed by one more bullish bar. Woud have bought at the break of the pin bar abd add some more in a possible retrace of the second bar. S/T one point below the lows and target would be the highs..

 

[mrsoul]

Just for fun, I thought it might be interesting to create a poll based on how members of the forum would choose to trade a particular setup.

Of course, this depends on whether anyone will participate but the aim is really just to see how members of the forum would vote and also might offer some valuable insight into your own trading.

I'm not saying these levels are absolute, but I do know the outcome, and I will reveal it when the poll expires. So please vote. Comment on your reasons as well if you like. Also, are there other levels you would consider at this point in time?

p.s. in the poll, instead of 'sell/go short' I've said 'enter a sell' for the sake of SB

I HAVE INCLUDED a 20SMA, VOLUME, A/D LINE AS THE ONLY INDICATORS and a TRENDLINE (my interpretation of).

EDIT: APOLOGIES - in the poll I refer to upper/lower green and red 'bars' but I meant the HORIZONTAL LINES THAT I'VE DRAWN IN i.e. upper green LINE, lower green LINE, red LINE (got bars on the brain, obviously .)

Your trendline is drawn wrong- it should be drawn from the high to the next lower high.

 

[rathcoole_exile]

Your trendline is drawn wrong- it should be drawn from the high to the next lower high.

there is a school of thought that TLs should be driven through the candle body high, not the spike - ie where the volume was traded
if that spike was caused by a single contract, then it's pretty meaningless as part of an overall analysis of PA

in which case the OP's TL would be (almost) drawn correctly.

 

[Masquerade]

Without knowing market this is - I can't give an opinion. A chart only tells half the story as far as i'm concerned. I wouldn't make any decision without knowing the fundamentals and logic behind the chart.

 

[Neoripley]

Your trendline is drawn wrong- it should be drawn from the high to the next lower high.

What happened to 'TA is more an art than exact science'? I've learned a few ways to draw a trendline but I prefer drawing from the highest high to highest low before the lowest low (vice versa for uptrend). I just find this the most reliable and what I like is that it confirms S/R - basically it's going from the highest resistance to the lowest resistance before lowest support. But it's a dynamic line which has to be redrawn with each new support low, so eventually it may even confirm the trendline you chose to draw originally.

 

[pedro01]

No trade.

There is too much overlap between the prior bars, the price action is indecisive

The market is either in a trading range OR a new downtrend.

If it’s a trading range, then you are almost half way to the other end of the range, therefore no trade.

If you agree with the new trendline, then there is no trade as the last 2 bars have been quite bullish & it’s worth seeing some bearishness before considering this ‘retracement’ to be over & the trend continuing.

I wouldn't take it as a reversal of the new trendline, I'd wait for a retracement after the trendline break before considering a new uptrend.

 

[Neoripley]

I wouldn't take it as a reversal of the new trendline, I'd wait for a retracement after the trendline break before considering a new uptrend.

So you would most likely be a buyer if the price were to break above the upper green line? (for it to do that it would have had to cross both the MA and trendline)

 

[pedro01]

So you would most likely be a buyer if the price were to break above the upper green line? (for it to do that it would have had to cross both the MA and trendline)

No - I would not use the price crossing MA or Trendline as a reason to enter a trade.

For a new trend to be established, you must break the trendline & then usually there is a retrace. Until that happens, I am with the old trend. In any case, I would not open a trade when the prior bars overlap to the extent that these bars do.

The price action has to confirm any entry and the price action to the right of that chart isn't something I would trade. I would wait for something more conclusive.

 

[mrsoul]

No - I would not use the price crossing MA or Trendline as a reason to enter a trade.

For a new trend to be established, you must break the trendline & then usually there is a retrace. Until that happens, I am with the old trend. In any case, I would not open a trade when the prior bars overlap to the extent that these bars do.

The price action has to confirm any entry and the price action to the right of that chart isn't something I would trade. I would wait for something more conclusive.

"Those that tell don't know. Those that know don't tell. "

This quote really applies to the system sellers:
Would anyone, in their right mind, sell a system that works for a couple of hundred bucks?

-Not intended to derail the thread-

 

[Trader333]

"Those that tell don't know. Those that know don't tell. "

How do you know ? and by telling us this then presumably you don't know because if you did you wouldn't have told us.



Paul

 

[mrsoul]

How do you know ? and by telling us this then presumably you don't know because if you did you wouldn't have told us.



Paul

I'm talking about the "system sellers".

 

[Trader333]

I was only joking


Paul

 

[mrsoul]

I was only joking


Paul

lol

 

[mr.marcus]

"Weak hand" selling has been aggressively bought up by "stong hands". How do we know weak hands are trading short? The prior double top trigger and the degree we have travelled in the range.The volume is diminishing as shown in the red circles at new price levels, so I can also conclude that weak hands are finding less and less money in thier pockets, couple this with the aggressive buying and there is little threat to an upside postion.

Where we are price wise and current weak hand mindset would mean that the market would have to rise predominantly on weak hand liquidatation,we have enough weak hand open interest to achieve this and enough points of further liquidty about the current price also.There will be some residual selling on a lower time frame who will see this still as a pull back and sell the market, however the liquidating will outweigh this.

The real question is not will the market rise from here but how far. With the very limited information given, it is possible to at least establish a timeline for the current apex, understand who will "see" this and thus comprehend future liquidty derived from this. This would give the "strong" hands an intitial destination of the orange high. It is harder to know if the market will reverse at this point or reverse and continue on, but it will likely react here.

Other price and volume observations to try to deduce the instrument and timeframe. Note the lack of any gaps so not an end of day stock chart. If you see the volume in the black circles and compare the first to the third, you can see an increase, this increase does not fit "the norm" which the price action would dictate, so this "extra" volume has to be either news related to open related in any highly correlated market. Example US markets opening and a European instrument already into its trading day. However if we note the first circle compared to the second, this volume drop off,with this given price action equates more to participants waiting for another market to open. And finally if we look at the second to third we again see a dramitic increase in volume, so I would say this is a news event. Now if we consider which markets have a news event and trade for extended periods I am left with commodities or FX. Now I know when news typically occurs for commodities and FX and also I know what compartive volume levels are traded prior, commodities do not trade at the volume levels in first circle and for extended periods of the day. So I would go for FX. Timline 15mins or lower.

The price action inside the red box is also very typical of news, 2 major directional changes, first an upside momentum move swiftly knocked back to the original mindset, and then bought up. In fact taking this into account and adding this into the equation, the upside move is likely heading beyond the orange line drawn at highs, probably still to correct there to bring in more weak hands trading off resistance (double tops/triple tops etc).

ps.Im curious as to what the traders who answered "i see no setup" would consider a setup?...cause it doesnt get much more high probability than this,applying buying and selling forces with the intent to allow prices to rise.Because there is no double bottom setup to trigger weak hands ,the price will not rise "too fast" which would result in major demand hitting the market early ,thus not good prices for covering.With this in mind,there should be no deliberately aggressive selling by strong hands to keep the demand out.This is also a bonus for those wanting to hold upside postions.The demand will be dripped in.