Scalping: 3LZZ DSR

[Jhx]

It takes momentum to break momentum. Your losses, momentum had not failed yet.
-2 Momentum candle zline, fail.
-doji

Thanks for replying doji!

I know your definition of momentum with candle closing above / below the previous candle's high / low; but is there a way to determine when momentum is broken by momentum without overlays? Like only using the 3zz or with single candles? I just don't want to go overboard with adding indicators and make use of what I have on my chart.

[aliassmith]

So this was the result for the day. It wouldn't have been too bad except for the 2nd loss, but that area is one of the best examples where I'm conflicted in terms of trade direction.

I see the 3 sema to go short, price is going up in these last bars, but I can't ignore the fact that price has been really dropping, specially if I look left. I don't know how I should analyze these scenarios, I feel a bit lost when that happens:

GU_3LZZDSR_07012022_3.png

And price then moved like this.

GU_3LZZDSR_07012022_4.png

I guess price is starting to flip, at least from what I see on this chart, but I don't know if there's a way to find clues that this might happen looking at the chart. There's something I'm probably missing when taking these reversals .

Open to suggestions

The 3ball isnt my thing but as for execution I might help.

Look at your entries. From what I see there was always a better entry on a pullback. Better entries can make it easier to get profitable exits.

Look at your exits the profits could of been better and if your entries were better your SL could be smaller.

Try putting a 20 sma on there and only trade with it.

If i get a chance later I'll try to post a chart of what I see there.

Wow, thanks for all the detailed replies alias. Your answers popped up some questions:

SMA:
When you talk about putting the 20 SMA and only trading with it, do you mean -only- using the SMA and discarding the 3ball?
Or just using it as a bias (as only short below the SMA, only long above the SMA)?

Entries and pullbacks:
I understand that entering in the pullbacks the SL gets smaller, but given that I'm using an M5, what would be the entry method here to enter on a pullback? A limit order? Or waiting for a candle to close in the opposite direction and jump in at the open on the next one?

I see the entries in the charts you posted, but I don't think I get how you'd enter in some of those. (The FVG I have no clue; I haven't heard of those but I don't know if for now I should stick to other entries I'm familiar with like the rat entry or similar).

Again thanks for all the replies, I appreciate it

I do mean only use the 20 sma. Since you are scalping the 3lzz is always looking for reversal. It will give bad signals and then move to a new low/high. I think the 3lzz is more effective for trying to catch big moves. You'll take a few hits then catch a big move to make up for the losses.

Trading with the 20 sma is trading with the "trend" and tends to give more options for scalping. When I am scalping I am really looking for a few 3 to 10 pips moves in a short time. Sometimes it's a lot more if I'm really in sync with the market!

Entries:
You can continue to enter where you are with half of a position and wait until it moves against you a few pips to add the other. That is something that will take research.

You can also wait and enter somewhere on the pullback. It might mean waiting a few pips and then entering. I could be a special pattern that triggers the entry. I could be structure related such as a micro trend break after a certain pullback type.

FVG is Fair Value Gap. It is a label ICT uses. It might be best to research it if you are interested.

If you want to stick with the rat entry, you should definitely research it to see if it works for what you are doing.

I can't tell you what will work with you. I can only provide ideas through my experience that you can test.

[Jhx]

The 3ball isnt my thing but as for execution I might help.

Look at your entries. From what I see there was always a better entry on a pullback. Better entries can make it easier to get profitable exits.

Look at your exits the profits could of been better and if your entries were better your SL could be smaller.

Try putting a 20 sma on there and only trade with it.

If i get a chance later I'll try to post a chart of what I see there.

Wow, thanks for all the detailed replies alias. Your answers popped up some questions:

SMA:
When you talk about putting the 20 SMA and only trading with it, do you mean -only- using the SMA and discarding the 3ball?
Or just using it as a bias (as only short below the SMA, only long above the SMA)?

Entries and pullbacks:
I understand that entering in the pullbacks the SL gets smaller, but given that I'm using an M5, what would be the entry method here to enter on a pullback? A limit order? Or waiting for a candle to close in the opposite direction and jump in at the open on the next one?

I see the entries in the charts you posted, but I don't think I get how you'd enter in some of those. (The FVG I have no clue; I haven't heard of those but I don't know if for now I should stick to other entries I'm familiar with like the rat entry or similar).

Again thanks for all the replies, I appreciate it

I do mean only use the 20 sma. Since you are scalping the 3lzz is always looking for reversal. It will give bad signals and then move to a new low/high. I think the 3lzz is more effective for trying to catch big moves. You'll take a few hits then catch a big move to make up for the losses.

Trading with the 20 sma is trading with the "trend" and tends to give more options for scalping. When I am scalping I am really looking for a few 3 to 10 pips moves in a short time. Sometimes it's a lot more if I'm really in sync with the market!

Entries:
You can continue to enter where you are with half of a position and wait until it moves against you a few pips to add the other. That is something that will take research.

You can also wait and enter somewhere on the pullback. It might mean waiting a few pips and then entering. I could be a special pattern that triggers the entry. I could be structure related such as a micro trend break after a certain pullback type.

FVG is Fair Value Gap. It is a label ICT uses. It might be best to research it if you are interested.

If you want to stick with the rat entry, you should definitely research it to see if it works for what you are doing.

I can't tell you what will work with you. I can only provide ideas through my experience that you can test.

Thanks again for all this alias.

One last question regarding the SMA. Since I was getting my entries mainly off the 3ball, when using the SMA you look for reversals essentially when it's 'far away from the SMA?

Or is there something else that signals that from that point it'd be good to start looking for reversals?

[aliassmith]

Wow, thanks for all the detailed replies alias. Your answers popped up some questions:

SMA:
When you talk about putting the 20 SMA and only trading with it, do you mean -only- using the SMA and discarding the 3ball?
Or just using it as a bias (as only short below the SMA, only long above the SMA)?

Entries and pullbacks:
I understand that entering in the pullbacks the SL gets smaller, but given that I'm using an M5, what would be the entry method here to enter on a pullback? A limit order? Or waiting for a candle to close in the opposite direction and jump in at the open on the next one?

I see the entries in the charts you posted, but I don't think I get how you'd enter in some of those. (The FVG I have no clue; I haven't heard of those but I don't know if for now I should stick to other entries I'm familiar with like the rat entry or similar).

Again thanks for all the replies, I appreciate it

I do mean only use the 20 sma. Since you are scalping the 3lzz is always looking for reversal. It will give bad signals and then move to a new low/high. I think the 3lzz is more effective for trying to catch big moves. You'll take a few hits then catch a big move to make up for the losses.

Trading with the 20 sma is trading with the "trend" and tends to give more options for scalping. When I am scalping I am really looking for a few 3 to 10 pips moves in a short time. Sometimes it's a lot more if I'm really in sync with the market!

Entries:
You can continue to enter where you are with half of a position and wait until it moves against you a few pips to add the other. That is something that will take research.

You can also wait and enter somewhere on the pullback. It might mean waiting a few pips and then entering. I could be a special pattern that triggers the entry. I could be structure related such as a micro trend break after a certain pullback type.

FVG is Fair Value Gap. It is a label ICT uses. It might be best to research it if you are interested.

If you want to stick with the rat entry, you should definitely research it to see if it works for what you are doing.

I can't tell you what will work with you. I can only provide ideas through my experience that you can test.

Thanks again for all this alias.

One last question regarding the SMA. Since I was getting my entries mainly off the 3ball, when using the SMA you look for reversals essentially when it's 'far away from the SMA?

Or is there something else that signals that from that point it'd be good to start looking for reversals?

If the 20 sma is ponting down and price is under then look for shorts.

If the 20 sma is pointing up and price is above then look for longs.

Those are basic bias conditions. Triggers are whatever you like/research. I use various methods based on that bias. Pullback, flags, wedges, penants, etc.

[Jhx]

I suggest trading with the 20 sma. It's not a trigger it's a bias.
I have examples in my thread and Lem has examples in his thread.

I prefer to use structures that stay, unlike a 3ball that moves.

I took another look at this one and it's now clearer how the SMA is used

I'll give it a shot starting tomorrow. Thanks alias

[Jhx]

It's important for me to show the losers to see if there were any mistakes.

The SMA is just a bias (long above, short below).

The entries are still rat entries after price retraces. Color change, and enter on the next candle at the break of the low (for shorts) or high (for longs).

I used the DSR to set my stops. Sometimes they feel too wide but if I use a closer wick it might be too tight, although RR might increase. I don't know yet.

Targets where 1:1 or close to that; near the dots sometimes.

----

First trade just didn't work, reversed right after the entry.

Second trade price went below the SMA, made some lows. Still reversed back up.

Third trade was weird; I went short at the close of the candle and not at the break of the low because by that time it was still above the SMA. Still worked out though.

In hindsight the second and third trade were around the same area and looked a bit flat or ranging.

Trades 4 and 5 looked better.

GU_SMADSR_07042022_1A.png (180.24 KiB) Viewed 1706 times

This one's the same, just a bit zoomed in.

GU_SMADSR_07042022_1B.png (156.91 KiB) Viewed 1706 times

[Jhx]

This one I didn't take. Had I taken the short there it might have worked BUT it was making new highs (or my understanding of it), and the trigger for the short was over the SMA, so no trade.

I guess I could've done the same thing as trade #3, but I'm not too sure about these.

GU_SMADSR_07042022_2.png (111.75 KiB) Viewed 1690 times

[IgazI]

Simple analysis:
- price breaks 3 ranges and closes red.
- price breaks 3 ranges and closes lower.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges and closes green.

I'd use a smaller chart, 1 or 2 minutes, and enter 1 + 1 + 2;
if after an entry there are 2 closes where your last entry is not in profit then exit.

Use the same reason to exit as you used to enter.

GBP_A_NAIL_SIS.png (68.69 KiB) Viewed 1657 times

[aliassmith]

It's important for me to show the losers to see if there were any mistakes.

The SMA is just a bias (long above, short below).

The entries are still rat entries after price retraces. Color change, and enter on the next candle at the break of the low (for shorts) or high (for longs).

I used the DSR to set my stops. Sometimes they feel too wide but if I use a closer wick it might be too tight, although RR might increase. I don't know yet.

Targets where 1:1 or close to that; near the dots sometimes.

----

First trade just didn't work, reversed right after the entry.

Second trade price went below the SMA, made some lows. Still reversed back up.

Third trade was weird; I went short at the close of the candle and not at the break of the low because by that time it was still above the SMA. Still worked out though.

In hindsight the second and third trade were around the same area and looked a bit flat or ranging.

Trades 4 and 5 looked better.

GU_SMADSR_07042022_1A.png

This one's the same, just a bit zoomed in.

GU_SMADSR_07042022_1B.png

Yes trade 1 can be hard to predict. I get caught on them on occasion. Those happen when price is starting to transition long to short and short to long. However, there was momentum breaking momentum for short price action right before you took that trade.

Trade 2, the only thing I can say about that is the 20 sma is kinda flat, but it will come with experience and -6 isn't bad.

Trade 3 looks good according to your method.

Trade 3.5 it's a trade you missed between trades 3 and 4

Trades 4 and 5 look good

Trade 5 looks good

Overall, you were plus 6 pips. Without that -10 you are looking at 16 pips on the day which is nice.

[aliassmith]

Simple analysis:
- price breaks 3 ranges and closes red.
- price breaks 3 ranges and closes lower.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges, rejects, closes red.
- price breaks 3 ranges and closes green.

I'd use a smaller chart, 1 or 2 minutes, and enter 1 + 1 + 2;
if after an entry there are 2 closes where your last entry is not in profit then exit.

Use the same reason to exit as you used to enter.

GBP_A_NAIL_SIS.png

1 minute can give you information but I find its simple to focus on 1 pair and timeframe (at first). Trust me there is a lot of opportunity on that GPB chart if you learn to take advantage of it. Some days are better than others and you should try to figure out how volatility affect your trading. There will probably be a sweet spot for you.

In the end you will understand that although it is presented as do step 1 then do step 2, you will discover there is nuance to it and little price action clues will make a difference.