Where Would You Enter Short?

 

Question from YTC reader:

I traded ZIOP a few times today (I will attach the daily, 30 min and 3 min which are the charts I use below) I entered on the fourth 3 min candle right after the pullback and set my stop below the low of day. It was a good trade and I rode it to the resistance area on the 30 min chart.

My question is when does this become a short play, a safe short? Is it once it breaks below the open? Below the swing low? Or is there something that could have lead you into a short as soon as it didn't move over the highs and made a lower high?

I ended up taking a short after the first pullback once it went below the open price around 8.86, in the afternoon. It worked out well however I always have trouble getting into shorts early in plays that were longs and reversed.

Thanks, I hope I explained it well. Basically I just want to know where you would consider the trend changed and a short trade be the higher probability trade.

 

Attached Charts:

(The following are the daily, 30 min and 3 min charts as attached to the original email. I've added an overlay to the 3 min chart though, so that it shows the approximate location of the trades as described above – these were not on the original attachment so the exact entry location may vary slightly from what is shown.)

 

Daily Chart

30 Min Chart

3 Min Chart

 

Reply:

 

Where would you short?

Where would you short?

Where would you short?

Where would you short?

Where would you short?

 

Happy Trading,

Lance Beggs


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YourTradingCoach - Admin

4 Comments to “Where Would You Enter Short?”

  1. Tom says:

    I think because the trend changed when it fell below the G point, so that we can take short when price retest the E point which now turns to be resistance

    • Lance Beggs says:

      Thanks Tom. I’d have no problems at all with someone looking for a short on a restest of E. I’d do it myself. (I left that out of the article otherwise it’d start getting too long!) 🙂

  2. Bob Pit says:

    Thinking of the Resistance as a LINE (which I usually do), my first thought would be to short at F (retest of the resistance).

    Thinking of it as an area (like between top of B and top of F), I’d be looking to short above F, just bellow B, whith much less certainty. And I would have lost the trade.

    I am not familiar with this instrument. I noticed that in EUR/USD S/R lines can be very accurate and many times prices can go within 1-2 pips of the line and reverse back.

    • Lance Beggs says:

      Bob, Thanks for your thoughts on this topic. Yes, I quite like the short at F. And your thoughts about the area between F & B. Especially if the market got back to that point sometime soon after forming the high at B (the break of the first layered levels of resistance). I’d DEFINITELY be looking for a short in that area.

      Like you I’m not familiar with this instrument at all. That certainly can be a factor in our decision making. Although PA principles are valid across all markets, they do all have their own nuances.

      Cheers,
      Lance

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