Managing a Trade with the Perfect Entry

I missed the top. Wave 5 and Wave 3 were compacted into one single push with no visible continuation divergence in between to point out where Wave 4 ended. It all became an ABC.

To catch a top, you need to put out limit orders at the usual suspects.

Wave 1 ended up making a larger than usual break. I was waiting for the Wave 2 kick back to Mr. Maroon, but it was not happening yesterday.

I wasn’t chasing it. The market went into sell strength by the 60-sample stochastic D slipping back below 50, and later went into sell weakness as well by registering stochastic bars on the 15 min.

Sell weakness – see the article

The subsequent low provided me with 4 levels to sell weakness at: 27 pips above (1.0831) and then at 1-3x 7 pips higher. Selling weakness aims to exploit shallow pullbacks regardless of how overbought / oversold price is and does this by starting to sell within less than a fluctuation size away from the swing low/high.

Fortunately, I have other top notch indicators up my sleeve (if I stuff them there) and the 1H liquidity break can give me the turning point within 5 pips.

The RSI2 Hedge did just that within 1.5 pips to be exact.

I got fills at 1.08302 and 1.08339

At this point I am aware that Wave 1 has transpired, and I am looking at Wave 2 back to Mr. Maroon.

To get an idea of where Wave 3 down could go to, the W3 value is underlined on the picture.

The 1-1.3x ATR calculation gives you a band where price would most likely land on after a Wave 3 (could exceed it, but would return in that case):

Refer to the South side values.

For the exact location I would have to monitor for a beat beyond the second 30-minute exhaustion (or one very deep exhaustion).

As for money management, I could had put on 20x the size that I did (but trading is a sport, ain’t it?). My hedge routine is currently set to 39 pips away for a full hedge (from average entry), but as you can see, the go long green line was never hit (see the turn within these 5 pips image), so I could had used it as a stop loss all along.

My smart trail stop could take over the management from here, but to stay in the positions you need to ride out the initial turbulence, so it should be only clicked on after being in 20+ pips gains and if the trade has been on for a while, i.e. for more than an hour.

Picture: the market approaching S2 distance relative to the mean

wave 3 of wave 3 shall commence after a bounce up.

All in all I’m looking for some terminal action below 1.0744, near the 10% mark, just beyond 3x stretch (currently at 1.0748 and declining).

Wave 3’s 1st exhaustion was printed. I have increased my size. Don’t buy the beat!

Wrong about reversal.

Daily Support is at 1.0708-1.0703 there is a 4-hour support at 1.077-.10765. No more hourly supports.

We have missed the energy bands, stalling at the halfway level of the capitulation / doji, and daily energy is being called upon. The damage could be severe.

& the 4H support held, what can I do, my indicators are smarter than I

Even though I said I would be buying yesterday, I did not get on board. Gotta start taking double exhaustions more seriously.

The only thing I was wrong on was the wave count, everything else still stands

I need to stop overriding my own indcators. They are smarter than I, period. I’m sitting on the sidelines instead of going in at 1.0727 like I was told to do so.

Trading plan sketch

Fade Magenta Exhaustions

Denomination: 0.25

Counter side: limit orders, aim for 30 pip (or close to Maoon or other side of Maroon after 3 diamonds), use trail stop “2”.
Entries: up to 3, adjusted to last magenta exhaustion

Directional side: at market then every 10 pips, aim for 60 pipa, use trail stop “2”.
Entries: up to 4

Edge 1:
Exhaustion / Ehaustion+Beat
Edge 2:
Sell Above / Buy Below
Edge 3:
Hourly oversold/overbought fractals x3