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Carl, can you help me understand how/when you decide to revise lower when your support point has been penetrated? For instance, as you know, just an hour ago the bears gave your support point at 1390 a good shake, yet you held fast and it looks like things are going to go your way. So, how’d you know to stick with it? Is it because of your bigger picture stance? Is it because of volume? Is it because of the duration of time spent below support? What’s your decision making criteria for making such a call? Thanks for your time.
I try to make trades near support and resistance, so I like to give the market a fair amount of room (e.g. 5 or 6 points in the S&P) initially. But then I monitor the market's action knowing that it shouldn't spend much time on the wrong side of support or resistance if it is to hold. In the case at hand the S&P's dropped less than 3 points past 1390 and 20 minutes later were back above that level. As I said in the post I would have bagged this trade if the market seemed likely to close below 1389 but this was never an issue.
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