Possible Outcomes on S&P500 and Trading Opportunities.
I believe that market structures are a representation of market sentiment. So if I'm able to understand the current situation based on the times that happened in the past and its evolution. I can get a good idea of the possible outcomes.
In today's post, we will start by defining the current context, and then we will look for 4 situations in the past that I found with similar or same price action as the one we can observe right now.
CURRENT CONTEXT: I see an ABC pattern after a bearish impulse.
2019:
2018:
2018:
2015:
My conclusion based on these scenarios is that after the breakout of the lower trendline of the corrective structure, we tend to observe some type of pullback. A new low works well to confirm the beginning of a new bearish impulse. (as you can see on the next template)
However, on the bullish side, this is the template that I found useful to think about long opportunities.
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With all the previous elements in mind, I will leave here the current context with both bullish and bearish filters.
Remember: As traders, it's not our job to forecast the next price movement. To be honest I think 99,9% of people are terrible at that. Including myself. After 3 years of consistent trading i have realized that I'm right 50% of the time (or that my forecasts are not better than flipping a coin) HOWEVER it's my job to make smart bets.
And what is a smart bet? For me, it's a situation where I know I have a 50% chance of being right, BUT if I'm right I will make 2 times what I'm risking. This approach has helped me achieve consistency by focusing on these "Smart Bets" Or High-quality situations. It's very important that you combine this with a great Risk Management that helps you avoid being knocked out when you are going through a Draw Down period. In my case, as I execute 2 setups a month on average, I use 2% to 3% of my capital on every stop loss.
Trade like a CASINO! Thanks for reading. Please feel free to share your view and charts in the comments.
In today's post, we will start by defining the current context, and then we will look for 4 situations in the past that I found with similar or same price action as the one we can observe right now.
CURRENT CONTEXT: I see an ABC pattern after a bearish impulse.
2019:
2018:
2018:
2015:
My conclusion based on these scenarios is that after the breakout of the lower trendline of the corrective structure, we tend to observe some type of pullback. A new low works well to confirm the beginning of a new bearish impulse. (as you can see on the next template)
However, on the bullish side, this is the template that I found useful to think about long opportunities.
--------------------------------------------------
With all the previous elements in mind, I will leave here the current context with both bullish and bearish filters.
Remember: As traders, it's not our job to forecast the next price movement. To be honest I think 99,9% of people are terrible at that. Including myself. After 3 years of consistent trading i have realized that I'm right 50% of the time (or that my forecasts are not better than flipping a coin) HOWEVER it's my job to make smart bets.
And what is a smart bet? For me, it's a situation where I know I have a 50% chance of being right, BUT if I'm right I will make 2 times what I'm risking. This approach has helped me achieve consistency by focusing on these "Smart Bets" Or High-quality situations. It's very important that you combine this with a great Risk Management that helps you avoid being knocked out when you are going through a Draw Down period. In my case, as I execute 2 setups a month on average, I use 2% to 3% of my capital on every stop loss.
Trade like a CASINO! Thanks for reading. Please feel free to share your view and charts in the comments.
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