Intraday Channel Strategy (April 24, 2023)
- 9:45am screenshot
- 9:45am HTFs
I was focusing on taking a short off the top of the channel for a scalp trade to the bottom side of the channel
But why ? Were we at a supply zone/key level of resistance ? Potentially on the 4h ? From the Early April high. But on the hourly, we are in the middle of the range (see HTF photo above)
In my head I was thinking to comofrtably take that trade, you we need to see some type of trendbreak retest on the 2min - first line was too steep so i readjusted it for the pullback bounce (below)
This trade technically would have worked, but not if your target was the bottom of the channel because it bounces strong off of the 4157 key level
If you are going to take that trade - TP should be at the key level
As colby stated, it is probably much easier to go with the direction of the channel - so long the bottom instead of shorting the top (especially since we have broken the hourly downtrend we had last week with a strong premarket rally (See HTF photo above)
Update...10:30am - Trade would have worked (Below)
UPDATE: April 25, 2023
Today we had an example of a 5min channel that basically trended for the whole day (photo below)
However, this was not a channel that was significantly respected, but it was still a downtrend that closed close to LOD, and I need to ask myself how I can catch a trade like this in the future
*NOTE* This channel was in the direction of the recent MICRO Downtrend that we have been in, as opposed to the example of the 5min channel during the PM and open yesterday (photo above on April 24)
First off, I need to get it into my head that when we are trending, I need to trust Higher Highs, Higher Lows (Uptrend) and Lower Highs, Lower Lows (Downtrend)
I'm not sure why I always have this bias that the market is always trying to fakeout the dumb money, and will rip this in the face of all of retail traders, when in fact it was the dumb money like me that was trying to catch a trend reversal on this today
TRENDS ARE TRENDS UNTIL THEY ARE BROKEN
I can afford to take 1 loss at a HH (in today's example since it was a downtrend) if I am trading with the trend because I am more likely to win most of the time
So that being said ... where is the entry for a short on an ugly trend like this?
I think the only place that makes sense to get in to try to catch the trend would have been one of the LHs between 12:15 - 1:15pm. The reasons being ...
- It was clearly respecting the middle line of the channel (didn't actually have a middle line drawn but you can clearly imagine)
- The trend wasn't actually set until the LH at 11:15 - 11:20am (assuming you didn't include the PM action)
- Shorting any time after the big 1:15pm drop would've just been chasing and a skewed R
Pre-Entry Requirements
- Is the channel trending in the direction of the current MICRO trend? (YES = Trade and Trust HH's, HL's, LH's, LL's) (NO = Potentially Scalp Trade in direction of current MICRO trend)
Entry Requirements (Only if answered YES above)
- Are we at a significant level on the channel? Top of Channel if Micro is Down? Bottom of channel if Micro is up? Middle line if it has proved to be significant (above photo)
- Are we at a key level ? Previous support/resistance? VWAP ? 50 EMA? PM High/Low?
- Are we significantly trending ? (Ex: LOD, LOD, LOD, LOD, LOD as in photo above)
- Do we have room for a bigger move on the Higher Time Frames?
Possible Exit Reasons
- HOD, LOD at close
- Otherside of Channel from Entry
- At Demand or Supply on Higher Time Frame chart
- Incoming New Catalyst
