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Hey Guys,
So want one of things I have the hardest time understanding is this. When is it a good idea to buy high in a TR ?
Because if the leg up to the top is weak then we fade. But if the leg in strong to the top we can always that it’s only strong because of a Vacuum effect, and still expect a reversal.
In the example I joint, I am assuming TR because price came back to the Major Low, and also we had sideways Price action for 20+ bars.
So when can we buy high in the TR like the green circle in this example ?
Or is this a BO above the Resistance in the red line ?
I think in general, it is better to buy at the bottom of that range. But I will say the context is especially good in this example to expect a breakout. It's a double bottom bull flag after the initial breakout at the start of your chart. It was also a wedge bottom on the final leg down to the double bottom. And the channel up to the top of the range is extremely tight and a microchannel for most of the leg. Because of that, the momentum is very strong and you should expect it to go a little higher. Even if it reverses down sharply from the top of the range, it will likely come back to the top of that range before hitting your stop, so you could get out break even in most cases.
I say just go with the math and don't do it. You can always buy after the BO shows confirmation. Once you've gained a lot of experience, you'll be able to read the context good enough to jump in early, but until then, just go with the math and keep it basic.
Thanks for your answers guys, I think I'll just go with what Marcus says, just leave these type of situations alone as they are causing me too many losers and really messing up my whole trading. I'll wait until i get better before including these in my trading.
