Note: This post is one of the earliest remaining examples that was added when I began to develop this blog.
It shows a trade in Valero Energy using a 3 minute per bar chart...Although the market, the time frame and the chart color is different from most of those in my later posts, notice that I am still using the method described...
A scalper's dream set up...multiple rational for entry.
It shows a trade in Valero Energy using a 3 minute per bar chart...Although the market, the time frame and the chart color is different from most of those in my later posts, notice that I am still using the method described...
A scalper's dream set up...multiple rational for entry.
The stock chosen must have the liquidity to handle market entry and exit of a few thousand shares so that you avoid getting scalped...
I'll take even .15 or .18 for exposure of 15 to 25 minutes.
Once you see the divergence setting up, there is time enough to enter an 'anticipatory' Limit+TTO (at or above the current bar)...
OR - place a Market+TTO below the trend line in an attempt to get a better fill... i.e. getting an early fill in anticipation of a divergent bounce through the trend line.
But very often, its better to enter a buy Stop+TTO
order at the point where price would break the trend line, above the
current bar, to be sure of getting a fill IF price does indeed make the expected divergent bounce up. If the stop order is
not filled by the completion of that bar, you can move the stop price down along the trend line while the
next bar is developing.
This entry method avoids the potential problem of getting your 'anticipatory' Limit+TTO or Market+TTO order filled, only to watch as price first spikes down to your automatic TTO sell-stop, which could take you out just before the move goes in the anticipated direction...
