Iím another novice to this form. Iíve been reading this forum for many years now. Iím now trying to join the DOM club and this is my baby steps.
I truly hope that I will be able to find some help in here. For a last couple of weeks Iíve been recording DOM and watching it after work. I think I should mention that I donít use any charts I just use this recording.
Here is what I noticed today. By the way this is emini - 10th Monday.
Market moved down to 1872.25 level, at 1872.50 someone started to load up as we can see some buying is happening at this price.
After that market moved up to 1873.50, we can see there is more buying is happening at this price. Market moved 1 tick up to 1873.75 did some trades and dropped down to 1873.50
At this point I started to think someone is loading up and market should bounce down back to 1872.50 one more time just to test it.
So it did it went back to 1872.50 and Iíve made my notes to buy at 1872.25 as you can see it is appeared in the DOM. The expected exit price would be around 1874.75
Here are my questions:
1.)Where would be right place to put a stop loss order? Iíve noticed when this kind of scenario is happening. Market can move 3-4 ticks down and bounced back. Would be fair to say to have a stop loss at around 6 ticks from the entry price?. How would we know, how far would it go until we actually see the move. If i'm going to use the R/R logic it is a little bit confusing, because market can move only 7 tick from the entry price and if i see there potential go down I will need to close position any my R/R is going to be only 1:1. It is quite tricky and I am trying to get my head around it.
2.)Was my reading correct?
3.)What would be your feedback for this trade ?