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Video 15g on Breakouts regarding fading weak setups
Why does Al focuses on stop orders so much? Since there are Limit order traders, stop order traders, and traders buying/selling at the market. All of them with different assumptions.
Are stop order traders' goals(R:R) more important?
There is an order of progression which can make a significant difference in learning how to trade. Stop orders allow for the natural tendency of market movement to continue in the direction of bias. This is easiest and doesn't require as much of an understanding of intra bar dynamics as well as contextual high order aspects as much. Limit order and market order entries require more of this baseline. Limit orders require the most as often one is entering in the opposite direction of how the market is currently moving.
Stop orders are the easiest, followed by market orders, and then limit orders.
Hopefully helpful and good trades to you.
Let's clear out the market orders first. If the market is moving quickly, in a spike, this is the logical selection. Market orders are simply the "on the fly" call of a stop order in a moving market. Done. Easy. Still better to start with just stop orders.
Limit orders. . . . Very highly dependent on reading the market context. Often you will find resistance/support levels more easily at the 15m and 1 hour timeframe. With experience, these are just as easily found on the 5m. Without the context of how prices have moved historically, limit orders become difficult . . . very difficult. Additionally, because the market is moving in the opposite direction of where your target is, context is absolutely critical.
Limit orders work best in Limit Order markets. . . Sounds redundant. What is a good limit order market? - - - - Trading ranges!!! What happens in trading ranges? Previous levels of support and resistance hold. As the market spends a good portion of time in trading ranges, beginners are often drawn into limit order trading first. However, there is a nonobvious trap here. . . Trading ranges are areas of lower probability, by their nature. So, reading the context of where S/R exist become critical. And note, at some point, the trading range will break. 50/50 in the direction you want on the first try. This is more ambiguous than how trends behave. This is why beginning with swing trading and trends is Al's first book, and is an easier method to become a profitable trader.
Hopefully a little more insightful and good trades to you!
Good trades to you as well Eric!
Thanks for taking the time responding.
as well as contextual high order aspects as much. Limit order and market order entries require more of this baseline.
Im sorry brother but you've lost me there. What do you mean by contextual high order aspects?
