Play: Sustained Auction
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Market Narrative
Price opened 0.05xASR Above Value, Within Range on moderate imbalance. Price traded higher during IB and pulled back in C to VAH and M30 VWAP in UT and closed as a M30 Bullish Inside Bar / M15 THree Inside Up. Equities being equities the bias is long.
How was the Entry?
Since this is my first time in a long time trading DAX I did not pay attention to this opportunity. Dee had pointed it out to me and I went in on a pullback to the move getting about the same entry if I had taken the M15 Inside Up. Price had pushed outside of IB during E and my entry was during F TPO. Not having experience with the asset I went in.
How was the SL placement and sizing?
At first it was not great. It was too wide. I was fumbling with FX synergy as well as I could not get the contract sizing right. When I managed that I had put in a standard size SL. This was pointed out to me that it was too wide. In a sustained auction play a SL below the body of the formation is good enough as we are expecting a push behind the move. Same as with a Failed Auction it is okay to cut through the wicks as we again are expecting a push behind the move.
I adjusted the SL but did not adjust my sizing as I had already no confidence in the move. This was due to an extension up during F. In FX this is usually a bad sign and we can expect a reversal. This, being equities I thought I’d give it a try.
How was the profit target?
In a sustained auction play we expect the price to go higher above IB in this case it would have given a good 2R.
How was the Exit?
My stop got hit quite quickly with a good push down in F closing as a Bear Engulf. I noticed there was a difference in orders getting closed between the two brokers I use which normally doesn’t happen as much. Must’ve been a spread-related issue. DUe to me fumbling with the SL placement earlier this one netted a ‑0.62R loss.
What would a price action-based exit have done for the trade?
SL got hit
What would a time-based exit have done for the trade?
SL got hit
What did I do well?
I did well to take a chance and get a trade in on DAX.
What could I have done better?
I could have had better SL placement from the start.
Observations
DAX likes Frankie Fakeouts. And if the move was significant it can have M15/M30 reversals for a momentum push and can be traded from within IBR. Not during IB.
Missed Opportunity
N.A.
TAGS: Above Value, Within Range, Moderate Imbalance, Value Edge Reversal, VAH Reversal,
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