Scalping: 3LZZ DSR

[IgazI]

There are different ways to get a market bias. Using MA is one of them and zooming out to a bigger tf is another. Mine is a combination.
My post count is not that much, even if you read them one by one it wouldn’t take that long.

The moving average is a line chart of a larger chart period. . .

of course you are going to generally trade long above and short below, as the average lags behind price, but one should not forget that the MA as a whole is telling its own story.

You might find that 'bias' is simply you deciding to focus on one direction until you catch "the move";

it might be more about dedication and determination than an indication.

M5 BTC with an MA overlay:
lc.png

The 1MA is a line chart of closes at the current timeframe.

A higher MA isnt simply an MA of a higher timeframe. It is an algo of x amount of closed positions of the current TF.

If you are on the M1 chart a 1MA would be a line chart.
To represent the M5 chart on the same M1 chart you would connect the close of every five candles.

I meant to say only that it represented a higher chart period, not that it matched a specific chart period 1 for 1:

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[Jhx]

You never see three 1 minute candles forming at the same time do you? That’s why there is another thing called chart progression. It all started with a diagonal line followed by another one and it continuesnto eventually form something. The game is about waiting patiently for something to happen and take action based on it.

And so each diagonal line goes from swing to swing and those lines will eventually make patterns. As to crooked patterns, I think that comes with practice to learn how to identify them. But I think I have a wrong idea of how are patterns used:
1) Are they used to have a better clue of what is price going to do next once the pattern is formed?
2) Or are they used to trade the pattern as its forming towards its 'completion'?

My main questions when I see patterns is 'how much' (ie, how much should a pullback last) and 'when' do one takes action.

Take a bullish continuation pattern for example. There are so many options to do, and many others that price could do.
1) Trade the break of the high.
2) Wait for the price to break the high and then enter.
2) Trade the retest.
3) Trade the break after the retest.

And all that assuming that price won't do something else.

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There's so many things price could do:

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Also, not trying to be contrarian! I might only need a slight mind shift for things to click .

---

I posted this because I was a bit confused with Don's last 'question time' chart as I was plotting the lines. I will still post them though But this was the start (the 2-3-4-5 were the first breakout line happens) that sparked this post:

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[Jhx]

I tried doing this 'line by line' until a breakout line appeared.

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[Jhx]

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There are other breakout lines but I wouldn't take action because I wouldn't know what to do with them.

Also the first one I'd consider as failed.

Then there's the question of what's a significant or not significant swing when looking at candles, but that's another topic.

[Jhx]

Today I only had 2 trades, 2 losses, no big deal. Longs #2 and #3, the lines #1, #4, and #5, just didn't trigger.

After the session I started marking up some zones as I saw them. Pretty much using a close over with momentum but extending it until the extreme of the swing. I don't want to call these supply / demand, or support / resistance because I don't think they're exactly that. I'll just call them momentum swings.

In hindsight, I woudn't have taken #2 and #3 because I was buying into that. But then again it might only be this case.

But the main goal this week is figuring something to add more 'strength' to my trades, or seeing if a trade is weak. For example, knowing if I'm selling or buying into something of relevance might help. Or if it broke / failed to break a zone might also help.

This is how I'm reading these zones.

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And if I extend them after being broken, price came back to it. Hmm.

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[Jhx]

Picked a random date from last month and drew the same kind of zone to see if they could help in any way. Decent example because of the continued down move and then the SMA going up -> down -> up -> down.

After they break price tends to come back in.

With the SMA's slope as a bias the only way I could imagine I could use them is taking the break of the zone or wait for the pullback to the area (which would be a zline entry). But then there's the issue of the candle's size and potential profit. Unless I wait for price to come to the area and then go into a smaller timeframe but at that point I might be overcomplicating it.

Maybe I need to have more time for the chart to play out if I use these zones, as the session (blue lines) doesn't seem like it had too much opportunity doing it like this.

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I feel like there's something to this but not really lol , mixture between hindsight, coincidence and cluelessness on how I'd take action.

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[Jhx]

More, with the underlaying PA.

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[Don_xyZ]

@JHX

Patterns are not the end of all. It's merely the beginning.

You mentioned betting for the completion, well it has a negative vibe to it but an educated guess, yes.
I mentioned before, "getting familiar" with the patterns because...

1. patterns are not created equal
2. there will be crooked patterns and sometimes this will happen throughout the trading session and depending on the tf you use it can happen all day
3. there is no guarantee that the pattern will complete
4. the morphing of a pattern into a different one happens, a lot.

Once you get to know the patterns, pair it with market bias. I mentioned 2 simple methods to get your bias in my previous post (using MA or zooming out to a bigger tf). There is another way (among many others in my WIL), using the pattern themselves.

There are 2 patterns in the group, reversal and continuation.
Every trend WILL START with a reversal pattern. This, I guarantee. It will first fire off the reversal candlestick pattern and then confirmed with a bigger chart pattern (western chart patterns group like Double Top, Triple Top, H&S). However, this does not mean that every reversal pattern will result in a sustainable trend or even start a trend at all. It might be fading before resuming the previous trend.

Based on all the info I just provided above you will get 2 very important gems:

1. since we expect a pattern to complete, it's much simpler to take the breakout trade because everyone seeing the move will almost recognize what pattern it will become.
2. since every trend will start with a reversal pattern, the simpler tactic to make money is going with the continuation of the trend thus, making use of those continuation patterns.

So you can draw your own conclusion and one of them is:

1. Wait for a reversal pattern
2. Wait for a continuation pattern after #1 happen
3. Trade the breakout after #2 happen or while it's happening
4. If a breakout fail then a crooked pattern that goes to the opposite side could appear. Or simply put, the previous trend is still going strong.
5. There are different sizes of trend. Some are short lived, some are sustainable and then there are the extreme ones.


Now. Stats, stats, stats.

If this isn't spoon-feeding I don't know what is lolz
Only happens on Kreslik rofl

[Jhx]

@JHX

Patterns are not the end of all. It's merely the beginning.

You mentioned betting for the completion, well it has a negative vibe to it but an educated guess, yes.
I mentioned before, "getting familiar" with the patterns because...

1. patterns are not created equal
2. there will be crooked patterns and sometimes this will happen throughout the trading session and depending on the tf you use it can happen all day
3. there is no guarantee that the pattern will complete
4. the morphing of a pattern into a different one happens, a lot.

Once you get to know the patterns, pair it with market bias. I mentioned 2 simple methods to get your bias in my previous post (using MA or zooming out to a bigger tf). There is another way (among many others in my WIL), using the pattern themselves.

There are 2 patterns in the group, reversal and continuation.
Every trend WILL START with a reversal pattern. This, I guarantee. It will first fire off the reversal candlestick pattern and then confirmed with a bigger chart pattern (western chart patterns group like Double Top, Triple Top, H&S). However, this does not mean that every reversal pattern will result in a sustainable trend or even start a trend at all. It might be fading before resuming the previous trend.

Based on all the info I just provided above you will get 2 very important gems:

1. since we expect a pattern to complete, it's much simpler to take the breakout trade because everyone seeing the move will almost recognize what pattern it will become.
2. since every trend will start with a reversal pattern, the simpler tactic to make money is going with the continuation of the trend thus, making use of those continuation patterns.

So you can draw your own conclusion and one of them is:

1. Wait for a reversal pattern
2. Wait for a continuation pattern after #1 happen
3. Trade the breakout after #2 happen or while it's happening
4. If a breakout fail then a crooked pattern that goes to the opposite side could appear. Or simply put, the previous trend is still going strong.
5. There are different sizes of trend. Some are short lived, some are sustainable and then there are the extreme ones.


Now. Stats, stats, stats.

If this isn't spoon-feeding I don't know what is lolz
Only happens on Kreslik rofl

However, this does not mean that every reversal pattern will result in a sustainable trend or even start a trend at all. It might be fading before resuming the previous trend.

So the 'safest play' is to wait for a continuation after a reversal. Of course then price could reverse after that continuation but I guess it all goes back to making the 'best' educated guess and the more likely scenario.

1. Wait for a reversal pattern
2. Wait for a continuation pattern after #1 happen
3. Trade the breakout after #2 happen or while it's happening
4. If a breakout fail then a crooked pattern that goes to the opposite side could appear. Or simply put, the previous trend is still going strong.
5. There are different sizes of trend. Some are short lived, some are sustainable and then there are the extreme ones.

I need to chart that and start seeing it in action. I imagine reversals come in many forms but with my scarce pattern knowledge this is the idea that I understood:

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If this isn't spoon-feeding I don't know what is lolz
Only happens on Kreslik rofl

At this point I'm going to take that spoon without hesitation lmao

But really, thanks Don. You're helping lots

[Jhx]

Sanity check

TF: 5 min.
Bias: SMA (20) slope.
Idea: Letting price pull back (which means price has to reverse on a smaller scale) and continuation. Trade the continuation, breaking out from the pattern.

The boxes help me see where the continuation will be coming from.

Only the last one was a fail I think.

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Underlying PA, visualizing the pattern:

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