Tech,
Those charts are range bars, after each movement in price:- 22 or 43
points a new bar is drawn.
What you notice it that most of the patterns whether using VSA or
3 mins bars correlate to movements based on 22-27 points and then into
43 points and so on…..
For example the bounce off 3618 moved up 22-27 points.
When did price move down? after it completed the R27 high.
So if you are looking to move into ‘scalping;’ short-term moves of 10-20 points, as I mentioned earlier, you want to be trading in the direction of
the completed bar :- ie inverting or rotating in the opposite direction
from the open if trading against the trend.
You could use VSA or 3min bars to verify the trade, but the important part is using statistical price patterns that always occur in the market as an edge.
Either price has follow through or it fails and reverses, as in this case this morning towards 3660.
Today:- My view was for price to play out the HOOK pattern
and continue up towards 3660.
Now for price to continue up towards 3660 and follow my view of the
market price should have remained above 3632 and not drop below after
the initial 27 point range movement upwards @ 3648
Once price dropped began to move down, I moved my trailing stops into
3629 +10, because the probability of no follow through often sees price continue down 22-27 points from the previous swing high.
But you don’t want to trade the break of 3618 because you are trading the low of the of the bar which often reverses back upwards.
For me to short trade the market I would either want to see the SPI move up towards 3665, or move down into 3605, and wait, and then watch for price swing upwards into 3618 and then short trade from a 22-27 point high bar downwards, as it follows the trend.
Basically you need to apply these strategies in context with the overall market.
For example, if price opened near to 3665 then I’d be shorting down and holding down because it fits with the price action and my overall view of the market
BTW long 3619 stopped 3614 –5
Long again 3619 partial exit 3629 +10 and holding with breakeven stops.
As you can see I’ve dropped my levels down into 10-20 point moves now, but I still have the view of price completing 3660.
Your last trade using VSA has high risk simply because you haven’t
confirmed the pattern using either support or resistance and you are
trading against statistical movements that occur in the SPI.
There are high probability patterns in the market and there high
probability set-ups to trade those patterns, and you need to combine
what you already know with those certain patterns.
As i've always said, there are maybe 1 or 2 good trading set-ups per
week, when everything aligns perfectly and goes according to plan, and the rest of the time you need to protect yourself from losses and stop over trading.