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Frequently recurring signal
03/13/2014...KISS - Keep it Simple Scalping
Hammers as Signals
10/30/2014...easy as A-B-C, 1-2-3
I am not a purist when it comes to trading price action patterns because I rely heavily
on indicators but the basic premise still holds weight IMO.
(bet you didn't know she was really a closet stock market technician)
K.A.O.S has unleashed its second diabolical operation of the day...
Max, do you think its another continuation pattern?
It looks like K.A.O.S.'s Tea-Time operation has stopped going up at this point...
What do you think Agent 86?
"It could be the old triple Slingshot trick"
I find that kind of hard to believe Max...
"Not buying the old triple Slingshot trick? Would you believe...."
Reviewing charts after hours
I posted the following charts to StockTwits this evening. Had I been paying attention before the sessions closed perhaps I might have taken one or more of the trades...Anyway, they serve to point out that the methodologies and signals work - it doesn't matter what the time of day is, how energetic the market is nor which market is traded.
This 1st chart was posted while the YM and NQ sessions were closed. The mini RUT was still trading.
@PrudentAdventures who replied to my message.
8/19/2013 Missed trades
Keeping your concentration fixed on charts all day is a difficult task. Taking breaks from watching the screen is necessary - take a walk, make some coffee or what-ever. You will no doubt miss opportunities when you do...but staying in front of your trade station, trying not to miss a trick will open you up to lost opportunity anyway...Or worse - it can cause you to make mistakes that cost you equity.
Don't sweat missing trades - there will always be another one developing.
Below is an example of missed trades/signals, due to my running short on concentration. I had been watching for about two hours straight, since about 8:30 AM without taking a breather and didn't see either of these until well after the fact...
Another one missed - great signals well below the trend line...
5/30/2013 Multi-Time Frames
The divergence on the 120 tick chart 'confirms' the 90 tick's entry signals
11/04/2013 Another look at multi time frames
5/07/2013 Fibonacci Extensions
Although my default Fibonacci drawing tool is set up to show extensions I don't use them that often. But sometimes they can prove useful when analyzing multiple market Price/Action.
The first set of charts show the NQ, YM and ES futures markets after the close on Friday, May 7th - with Fibonacci grids/extensions added.
The next three sets cover the price action of the following week...
6/1/2013 Tick vs. Minute charts
The charts below compare some differences between the two chart types. IMO, the Tick chart shows a better P/A map of the H&S pattern that formed on the e-mini DOW futures on Friday 5/31/2013 ...the 1080/bar Tick and 4 minute/bar both span the 9:30 AM EST open of the major markets (green dashed vertical line) through the Futures close (red dashed vertical line).
On the other hand sometimes a time based chart draws a perfectly shaped pattern while the rough equivalent tick based chart is not as quite clear...
Sometimes the more 'normal' scalp of 10 to 15 YM points can be well exceeded. Market feel may help you determine when to give a winning trade some extra room to move. Although I didn't trade it, the chart below illustrates a runner pattern...trades like this certainly come your way a few times each week.
You've got to be aware how these runners can skew your trading statistics, especially your average $Win/$loss ratio but they sure are great for the bottom line...
The 30 WMA shown above can work nicely for trailing your stops up - keep the stops under the current bar and under the WMA..if entered early, under the trend line when the divergences were spotted, the trade above might have yielded a sweet 40-50 point gain with an exposure time of only 30 minutes.
Another runner 5/9/13
Discretionary Runner Stops
You can also decide to use 'runner' stops that give a little more room for price to wiggle around...especially if you have noticed that this would fit the day's Price/Action pattern so far...once B/E is achieved (include commission costs), slow down on the rate that you would normally trail stops up.
Below is an example of runner stops (with entry and exit using divergence)...
6/18/2013 Another Runner
The 10 AM 'Reversal Zone'
Reversals Often 'happen' around 10:00 AM, after the major market's opening activity has run its course...Just another recurring pattern to keep in the back of your mind
Here was a mini 2B Dragon with 3xD divergence followed by a break of the trend line.
6/18/2013 The BatWing
While its similar in shape to a 2B Dragon, it forms at a different position relative to the longer term trend. It is more a continuation pattern and not so much a reversal pattern as is the 2B... although it can be either.
The BatWing" is just a recognizable pattern on the chart...price will continue up or it won't.
I recently added a red 30 period WMA to many of my charts. I have found them useful for keeping track of price action in up and down trends as well as using them to help with the placement of stops once I've taken a position....
I'm beginning to notice that they may also show divergences, albeit with a bit of a lag. I'll be watching this to see if it may help me visualize and gauge the strength of newly established trends...Being able to better judge the existing P/A trend strength has at least three benefits:
Inverse H&S potential 01/19/2013
The RUT has been leading the run-up from November's lows...One down, four to go...
The following sets are daily charts
The descending wedge...Best not to forget the simple patterns...they can pay dividends.2B on daily, market positive...traded the 3 min wedge break while
MACD trend was in the green.
Another simple 5-wave descending wedge (reversal pattern). Often the breakout point of the upper Trend Line gets Re-tested before running (see the rectangular area above the wedge break)...in this example there was 2xD at the 5th leg bottom.
A potential play Using Patterns...The set up :
The daily Goldcorp chart below shows some of my favorite technical patterns
1) Oversold oscillator - in this case stochastic (yellow line)
2) Divergent histogram - in this case TRIX (blue bars)
3) Declining wedge - in this case a 5-wave move
4) Price decline of previous rally into the BZ (reversal area)
Using TICK and TRIN as signals and other ways to gauge the Markets via 'Market tells'
High and low TICK can signal a change in direction...
This picture shows the trading vehicle chart with a chart of the NY
I find it helpful to be able to quickly catch a glimpse of the Dow Jones Industrials ($DJI) price action along with the NYSE AD-DEC ($ADVN.Q/$DECN.Q) market breadth.
In the top chart I have the $DJI drawn with candlesticks while the Advancing and Declining issues are drawn as green and red bars respectively. The bottom chart has the NYSE TICK ($TICK.N) drawn in gray bars while the $DJI and NYSE TRIN ($TRIN.Q) are drawn as lines in aqua and yellow respectively.
This chart set may look a little "busy" at first.........
The numaric "value" of the scales on the right are not that important to me - its the relative positions of the indicators that I'm looking at. I drew the red/green vertical lines (and white circles) to show the relationship of high/low TRIN to the waves and oscillations in the DJI.
More on 'Market tells'
Below is a picture describing some more ways I create 'tells' that help me get an intra-day feel for market strength. I've overlaid the Advancing/Declining issues chart that's normally displayed on another monitor..........So far for this day, the INDU is strong to the upside with almost double the advances to decliners.
A quick glance at the watchlist's green and Red colors in the Change column confirms the strong breadth.
Patterns can work nicely at times:
Intra-day H&S pair on the S&P UltraShort ETF (SDS) 11/16/12
The 'Comparative Trade Method' is described in detail on its own page works well with the SDS bear ETF and the SSO bull ETF .
The bearish SDS H&S pattern could have been played to the long side via the S&P Ultra (SSO) which was displaying a bullish inverse H&S pattern...
Price Action and divergence
Miscellaneous charts, thoughts and observations
3/22/2013 A Low TICK scalp that worked nicely
Here's another reason to watch the major markets and breadth indicators for 'tells'...usually they're just for helping with 'feel' but if I'm having a particularly good day I'll use them for trade ideas too. So far the today the ADV-DEC, the TRIN and the DJI were all showing strength.
The NQ trade below was not based on it's indicators - the DJI was O/S and was testing recent support (as was the NQ)... Then there was a big spike down to -500 on the NY TICK chart...
Yes, it was a bit of a 'lucky' trade but sometimes you can enhance your trading by stepping outside your
2/22/2013 Price Separation between YM and DJI
This chart is interesting because of the price differences that are usually maintained through-out the day...they moved noticably together at the close. I thought about shorting the YM in the few minutes after the major markets closed knowing that it could be traded after 4:00 pm eastern on the assumption that the YM would pull it's price back apart........ A "coulda-shoulda" trade I know, "woulda" been good for at least 10 YM points.
4/21/2013 Convergence and divergence
Interesting relative movement between the futs before and after the major markets opened @9:30AM on Friday. (1 minute bars)
To see larger charts of the above go here (link to iHub post)
2/22/2013 These next two charts serve as a reminder to me why I don't like holding positions overnight. The first shows the bearish Head and Shoulders pattern on the INDU at the EOD, the second shows what can happen overnight.
More Misc. Stuff
2/16/2013 An entry at market below the trend line using 3xD
01/26/2013 Do patterns repeat...? Measured move down, 5+ pts per leg, breaking the down trend lines on increased volume after histogram divergence. Now just looking for the pull back to enter. Target @ $12 if price can retrace the 2nd leg move towards the 61% level as it did last November with the 1st leg.YANG update 3/19/2013 - target met
The green arrows show where price broke through the down trend lines.
There are at least three ways to play divergences:
1) Place a MARKET or MARKET+TTO order when you see the divergence developing. This ensures you get a fill - - often you'll get a very good fill below the down trend line, before price breaks out. But you may also subject yourself to watching price continue to go down and seeing the divergence disappear...
I won't chase a trade if I miss a good entry - there will always be another trade.
01/19/2013 Trailing Stops
I trail price up using trend lines very much like I trail entrys down.