BambinoFlex wrote:Here's an example of how important it is to understand profit targets and in general taking profits when you can.
The last post analyzed how price makes new highs/lows using pivot S1/R1 as a bias.
Here's a weekly chart. This week, price broke the previous low...so check mark...S1 is less than previous high, edge is low greater than previous low. Unfortunately, this pair, GBPCAD, opened and traded rather quickly toward that objective. Even though the previous low was broken, we're currently painting a bullish candle. This can be translated to the complaint people have about the wick zone, that it reverses.
My next "edge" is S1 and R1 as targets. Again, this can be replicated on daily, and even smaller timeframes. Even hourly, which I don't use since I tend to be away from my computer most of the time.
The second edge has more variables that can't be seen by the analyzer but in essence, price can reverse and hit R1 or S1 which are really far apart. So take profits when you can. Especially if trading the daily tf. These settings also point toward the "wicks" show loss idea from MO. This picture shows a wick breaking previous week low, but the bar didn't close below it, it closed higher.
I left the Level 3zz on it, even though its "bearish" you always have to have the mentality of "will it be a breakout or is it a swing reversal?" I'm sticking to a "breakout" and targeting the R1 weekly. This meshes together the previous post and this new post. If curious, I've seen price respect the S1 and R1 levels to the pip. If I'm trading the daily, I place my profits exactly on the lines or a few pips before. If a pair has crossed either S1 or R1, I dont trade it since R1 and S1 being crossed is not seen as often (think range).
Are these the indicators you use to trade?