11/28/11: Using simple concepts to make money and keep risk small- Buyer and seller failure / success recognition

I want to highlight how I use buyer and seller failure (success) to systematically make decisions. This 4 range chart shows:
- Trade 1 entered short on seller success, eliminated risk and got stopped for a profit of $20
- Trade 2 entered long on seller failure, never had the chance to eliminate risk, got stopped for a loss of $15 at the invalidation point.
- Trade 3 entered long on seller failure / lack of conviction, met target for a profit of $120.
- Trade 4 and 5 I want to discuss in detail, here's the chart:

I entered my standard Long continuation signal on trade 3, expecting price to breaks highs of the day. Buyers failed and were unable to get price to thos levels. I ended up getting stopped at the invalidation point at 2224.00 which was also a validation point for the short, so I had a stop limit short order pending with my stop for the long. I had a default target on the short of $100, which was met. The loss from the long attempt was kept at a conservative $45.

The key thing to take away from today is that its important to recognize what is happenening and act accordingly.