Trading breaks by doing the obvious thing – buying or sellling a move of 2pts above or below a level – juts doesn’t seem to work for me. I either get caught in the vibration around the level and stopped multiple times or I wait for the break and then get a terrible entry if the move is too fast.
Therefore, I need to use a different strategy which will get me in before the level breaks. This may sound illogical, but with good PA reading skills, it should have a much better success rate than the traditional way of doing it.
This is a perfect example from Feb 11; price hits the level I want to trade and then reverses back to the intraday 76.4% where it finds buyers. There are only a few bars but they form a perfect Impulsive-Corrective struture. If yiou wat for a break of the level you get slipped as you’re not the only one trading this. So it’s safer to use this pattern and enter the market just in front of the level.This is the same PA on a higher TF so show (1) how much momentu the move into the 50MA had and (2) that once broken, the market made no retest and just took off
And here’s another example from today (12th Feb) of how to make a safe entry for a break of R3
Once the fib that had capped futures session gains was cleared, it would open up the way for a move to R3. But my entry needs to be more than 20pts below the level I want to trade because the market is already very extended and I am not expecting the level to break. So again I can use the Impulsive-Corrective structure to enter the trade. There is no point in being afraid of levels with this trade – it is designedto work with levels and assumes that the small retrace is all the reaction the level is going to get.
