When should I enter? (NickB Method)

[Enforcer2006]

Nick, I did not take the 212.41ish scalp break at 17:40 today because the pair was moving very slow up to the scalp, then the price seemed to waffle around the scalp line for 10 min, poked across the line by 2-3 pips then went back down below for a few more minutes. Then all of a sudden broke the line by 20 pips in about a second. So if I had entered I would have been likely filled at @212.60ish. Did you take this trade, or would you have taken this trade given the price action?

I know in hindsight I would have easily made my 50 pips, but I'm trying to gauge when I should enter and when I should stand aside, as this definitely did not seem like a smooth break to me.

Given the time of day and the sluggishness of the pair, I thought I made the right decision to stand aside, given the initial large pip break, but I'm now kicking myself that I didn't go for it. Your thoughts would be greatly appreciated on how you would have handled this price action yourself.

[rogan]

Originally Posted by Enforcer2006

Nick, I did not take the 212.41ish scalp break at 17:40 today because the pair was moving very slow up to the scalp, then the price seemed to waffle around the scalp line for 10 min, poked across the line by 2-3 pips then went back down below for a few more minutes. Then all of a sudden broke the line by 20 pips in about a second. So if I had entered I would have been likely filled at @212.60ish. Did you take this trade, or would you have taken this trade given the price action?

I know in hindsight I would have easily made my 50 pips, but I'm trying to gauge when I should enter and when I should stand aside, as this definitely did not seem like a smooth break to me.

Given the time of day and the sluggishness of the pair, I thought I made the right decision to stand aside, given the initial large pip break, but I'm now kicking myself that I didn't go for it. Your thoughts would be greatly appreciated on how you would have handled this price action yourself.

Hi,

What you said was spot on in my book - I also did not enter. Mainly because of the time of day... something happened though as all the yen pairs shot up... I need to have a look when I get home to find out.

[NickB]

From page 22, 4th paragraph of the new free e-Book:

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If, instead, the candle has very little momentum, and it is slowly crawling its way
up/down when it crosses my line, I will hesitate. I do so simply because I do not have much confidence in the strength of the move. My hope is that the break of the line will give it the momentum it requires to begin to move, but I want to see that momentum first. If as soon as it breaks the line it jumps up 3-5 pips I will probably enter. Sometimes you will find a line is broken by 2 pips and then it completely reverses. This is why I am wary of moves with slow momentum. As a trader, I am trying to protect myself from entering a break that is not really a break.
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So basically what I am saying is that if when it break the line it gains momentum I will jump in. Think about it this way.....

The candle is moving up very slowly. The bulls are in power but they a struggling to hold on. Every single pip is a marathon and they are hurting. Then they come to this big barrier (212.44 scalp line), its make or break time. At this point they are barley holding on BUT if they manage to push just a little further and cross that barrier by a significant amount they are home free. Sometimes they manage to get a foot over the line but the bears jump on their backs and pull them back. Sometimes they manage to get their entire body over the line (5+ pips) and then they are good to go.

This time they hit the line and give it their all, their in a lot of pain but there is hope for them yet. The beauty of all that free bearless terrain just across the barrier gives them hope. Slowly they begin to regain their strength then all of a sudden and BAM! They take a final charge, the stampeded of bulls bursts through the line, and it doesn't stop. They ram the bears with their big bull tusks and keep on running as fast as they can.

That is what your looking for, that explosive BAM at the line.

Get it?

and yes I did take the trade actully grabebd 80 pips on this one. There was so much bullish momentum when it hit my 50 pip target it barley blinked. So I let it go a little further. At around about 80 pips it looked liek it was beging to struggle so I closed out.

[Enforcer2006]

Thanks Nick, I will keep this in mind for next time. It's good that you elaborated on this a bit more. Makes better sense now. The thing is with big explosive moves like that one, I'm always afraid it will be just a quick spike and drop back down. I guess distinguishing momentum from temporary spikes comes from practice.

[NickB]

good I am running out of ways to explain it.