Q&A Could you please explain exactly why you entered this long where you did on the chart below? You always manage to get such great entries.
A: So the level was 12416 and I wanted to see that it was working. The pictured green bar was enough of a signal for me to say the level was valid and then I just waited for a couple pips pull back into that bar and went long so that my entry had the stop below the 2DL (two-day low).
Generally, all I do is wait for a reaction to prove a level is working, and then let it pull back a couple pips into the reaction. Then I look at where my stop would be and if it seems safe, I enter. Of
coursesometimes, it just rips and I miss the trade … but most of the time it will come back a couple pips.
Q: Significance of 12416?
A: Futures gap close (Dax futures close at 22:00 and open at 8:00). This is shown as an orange line on the charts I post each morning.