There are a lot of different ideas here - some that I have incorporated into
my trading bag of tricks and others that reinforce and add to "How I do it"...
Further down the page there are some patterns that I continue to see but I have not been able to quantify
with enough confidence to use as trading tools, such as the "W" Batwing pattern and WMA divergences...
Towards the bottom I added some of the charts that were on the MOF and Slingshot page but were not relevant to those patterns.
Click this link to check out FLO - a simple strategy for swinging long, taking just 3 trades every month..
Click this link to check out FLO - a simple strategy for swinging long, taking just 3 trades every month..
I find it is important to revisit old ideas to inspire new ones.
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12/17/21 STO SCALPING
12/17/21 STO SCALPING
05/22/2014...Stochastic Signals...Slingshots
Frequently recurring signal
03/13/2014...KISS - Keep it Simple Scalping
Hammers as Signals
Frequently recurring signal
03/13/2014...KISS - Keep it Simple Scalping
Hammers as Signals
03/11/2014...Signals fired on the LT...enter on ST
Spotter and T-Mode
Below we had back-to-back entry opportunities...the potential for a Slingshot to shoot price out of over-sold followed
by a Price Action MOF when price returned to Re-Test the trend line breakout area...
01/06/2014...Three Consecutive-Closing-Lows (CCL)
A method for going long suggested by surfcat on iHub's board...
BUY at the closing price of 2nd-Consecutive-Closing-Low bar once the 3rd-Consecutive-Closing-Low bar completes.
My preference when trading with this method is to use a buy-stop bracket order. I'll cancel the order
if it is not filled by the bar that follows the CCL bar.
One reason it appeals to me is that it can keep you out
if price does not react in the way you anticipate...saving you a stop-loss to protect from further downside.
Here's an example of the method applied using signals on a longer term chart (RH side) to confirm an entry on the shorter (LH side).
Note on the RH 480 tick chart how the entry for the 3 Consecutive-Closing-Lows on the left side (that became 4) would not have been filled.
02/24/2015 - Further examples on shorter term scalping charts:
01/27/2015 - Some CCL templates I've created using the ApexTrader tools and additional examples of how often
the method can keep you out of losing trades...Here the 3rd CCL bar is RED.
(the yellow arrows and lines were added in MS Paint)
A 'longer term' 5 minute per bar chart...
Here the 3rd CCL candlestick body is RED with the out-line and tails yellow.
(again the yellow arrows were added afterwards in Paint)
Another example of trading with Consecutive Closing Lows
"HOW TO" use CCL
01/16/2015...Simple two chart counter trend scalping
Use a relatively long term chart for 'spotting' oversold price action. Then look at a shorter term chart for entry signals.
The Spotter chart's stochastic is in the oversold area and the Entry chart showed multiple signals:
divergences in the MACD histogram, the MACD EMAs, the TRIX histogram and the stochastic.
These are all signals suggesting a trend change was about to happen...BUY !
10:14...............Enter a market order any where below the trend line or place a buy-stop above.
The stop order should be placed above the trend line and above the current price bar in anticipation of a breakout.
10:16..................A new higher high printed before retracing back to the trend line break-out area.
10:17.................The first higher low printed and formed a Money-on-the-Floor pattern which also
set up the stochastic Continuation Slingshot pattern.
All of these signals confirm that the new up trend has indeed begun.
This is a good place to add contracts to the existing position.
More chart examples of the above method.
10/30/2014...easy as A-B-C, 1-2-3
Trader Vic Sperandeo, Alan S. Farley and a host of technicians going back
to the very beginning of T/A used this price pattern.
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.
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.
08/27/2014 Candlestick "tell" tails
Look at longer term charts for clues, trade in the direction of the clues using shorter term charts...
04/22/2014 Prancing Pony...fun names for patterns
Combining P/A and other signals to describe a recurring pattern. Similar to a 2B Dragon pattern except
the front legs print a higher low MOF...
Like the rider is reigning in, pulling the horse's head back to the trend line break area before spurring him on.
05/09/2014...Giddy Up
or another horse tale
07/10/2014
♫ The seasons they go round and round while the [Prancing] Ponies go up and down ♫
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♫ Joni Mitchell ♫
(bet you didn't know she was really a closet stock market technician)
(bet you didn't know she was really a closet stock market technician)
One more time
Fun Continuation pattern charts by Maxwell Smart
Control Agent 86, what's your take on the measured move pattern?
"It's the old back-to-back slingshots trick"
K.A.O.S has unleashed its second diabolical operation of the day...
Max, do you think its another continuation pattern?
"Its not everyone's cup-of-tea...We need to get a handle on it"
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...."
Tea-Time came and went...it was looking like K.A.O.S's 2nd diabolical plan
for the day had failed...even after they deployed the old triple Slingshot trick...
Well Max, how do you explain the late move up?
"It was the old delayed reaction to T/A patterns trick."
5/4/2014 EoM and BoM cycles
(End of Month/Beginning of month)
Another pattern that repeats with a regularity that can be traded successfully using options on stocks & ETFs or using E-mini futures.
"MONTHLY INFLUENCES"
The following ideas are adapted from Larry Williams' Trading.
The first and last Monday of EVERY month is a time to expect strong, BULLISH influences.
All you need to do is add 10% of the previous Friday's range to Monday's opening and buy at that level"
Thanks go to Surfcat on the iHub New ClearStation board for bringing this idea to my attention:
First and last Mondays of the month plus the Friday before OEX
Could pick any day of the month and get similar results...when the market is in bull mode
It does look like entry the Friday before OEX might have an edge...
Link to my other blog with updated results for the 1st-Last-OEX patterns.
04/12/2014 EXITs
Understanding Support/Resistance and "Free air" can be helpful for deciding
when enough IS enough
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I borrowed the term "Free air" from The Master Swing Trader by Alan S. Farley. He was referring mainly to price action
gaps and zones seen on stock charts. The above is my interpretation and adaption of what he meant.
The book is a great read for the trader who is inclined toward T/A and patterns.
EXITs - Using stops
Below is the same set of charts as in the example above. Protective sell stops are used to exit the trade.
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04/02/2014
Would you rather trade an existing trend?
Here's a way to scale into one using the methods discussed throughout this blog...
Multiple time frames, divergences, price action patterns and signals
04/03/2014
Another trending example the next day...The same patterns and signals are used to identify the reversals but use the
P/A continuation patterns to take positions...perhaps after the MOF is clearly established and the WMA has turned...
The MACD EMAs offer trending confirmation too.
4/16/2014...trend entry
Going to be watching for these...to see if they happen often enough to consider adding to the trading bag of tricks.
Have seen them before - three of them today :
#1........1:28 PM
#2........2:44 PM
#3.........3:57 PM
04/18/2014
Measured moves and retraces
04/01/2014
Patterns on longer term charts
100 point H&S target would put it nicely into the Brach Zone...
Minimum H&S target surpassed
CNBC reported today that a big put option purchase was commenced at 11:57 and suggested that the rest of the markets
reacted negatively to it...The story also suggested that it could have been part of a 'normal' offset/hedge position that traders didn't understand.
So it was SELL MORTIMER SELL for the rest of the session.
04/04/2014
Another longer term Pattern
These three charts show what can happen over night
1) The Thursday RUT emini session is still open...
New session - Friday overnight and morning...
2) Many traders perceive the Futures markets with suspicion, as being too risky.
Risk/reward analysis shows you that the e-minis are no riskier than other markets
although they can be more volatile...
Same session but see what can happen when the major markets open...
3) Why you watch e-mini trades like a hawk !!!!
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.
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...
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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
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).
4/30/2013 Runners
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.
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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.
Here's another BatWing...it has the characteristics of a 2B Dragon on the daily chart - if it plays out correctly it will reverse the 'minor' down trend that printed before the dragon.
But look at the weekly and monthly - the 'W' shape, or double bottom is not suggesting that a reversal of the longer term up trend is coming, nor is it suggesting an up trend continuation...It does suggest that a measure of support has been found at the bottom of the Ws' two V-Vs.
A shorter term look at the Bat-Wing continuation pattern:
Another Batwing on two time frames
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:
1) For staying with an existing trade longer - capturing greater gains..
2) Potential to show good entry points, for adding more contracts......
3) Alert to take a new position as a new trend is being established....
Stay tuned for further observations on WMA - Divergence potential...
5/10/2013 Re: WMA Divergence - So far, I have not seen another instance of the WMA divergence since posting the chart above...I'll keep observing as I have a WMA on most of my charts anyway...
5/20/2013 Have not spotted another instance of WMA Divergence so I'm concluding its not a worthwhile pursuit to continue with this idea.
5/26/2013...Maybe I gave up on this idea too early...
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 whileMACD 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.
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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)
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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
TICK below.
Market 'Tells'
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.
W/L 1) Selected e-minis, a set of bear ETFs + my main trade vehicals
W/L 2) Some commodity futures, a set of Bull ETFs and Bull funds
W/L 3) Contains the INDU stocks and Select Sector ETFs
W/L 4) Certain stocks of interest to me , grouped by industry
W/L 5) Stocks I've ID'ed as displaying some of my favorite patterns
The stocks and indices I use charge occasionally.
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
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04/07/2014
Differing time frames do not always print the same patterns at the same time. Here the 200 tick on the right displays a much longer period of time than the 60 tick on the left. It shows more patterns too.
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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
01/28/2013 Entry order types: Buy/Stop above trend line and Limit at trend line break for the re-test...using either method (or both) would have gotten an entry in this example.
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 
01/23/2013
A good day will present four or more divergence plays. This chart shows one minute candles for the entire session with just the TRIX histogram indicator. I've marked and numbered the regular divergences on the histogram as well as the corresponding price low associated with each divergence on the price chart .
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...
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...
2) When you see a potential divergence developing, you should have enough time to place a BUY/STOP or BUY/STOP+TTO above the current developing candle, at or just above the down trend line. Place the stop price at the point where price WILL break out if it moves as expected. This way if price continues down your order can be "trailed" down, above the subsequent candles until price does react to the divergence and moves up to break out of the down trend.
3) If you are 'late' in seeing a divergence play and price has already broken the down trend line, you can still participate by placing a LIMIT or LIMIT+TTO order at the level that price broke the trend line. This will require price to re-test that area to get a fill, but it often does...
I won't chase a trade if I miss a good entry - there will always be another trade.
01/19/2013 Trailing Stops
The chart below shows a 2B Dragon with 3X Divergence, two of my favorite rationals for going long. Although it was getting sort of late in the day, a good set of signals are still good signals. The insert chart shows the type of day it had been so far - up but kinda slow with a small range...
Entry was a Buy Stop+TTO at the trend line break, but a Market+TTO when the divergence was spotted or a Buy Limit+TTO at the trend line break level would also have got you an entry.
With this chart I'm trying to show how I trail the lower stop as price rises (the dotted orange lines drawn in after the trade)... I tried to draw them so that the left side of the line is directly under the bar that prompted raising the stop I don't draw these while I have a trade working but I will sometimes draw rising trend line(s) to help me figure out where and when to actually move my stop. I figure that since there will be minor pull-backs, the up trend lines should hold as support... So I keep my stops just below the rising trend line...
I trail price up using trend lines very much like I trail entrys down.
I trail price up using trend lines very much like I trail entrys down.
It took 8 bars to get my stop moved up to break-even. Once there at B/E, I try to let price develop or range for a bit, to give it some room and some time to continue up...I hate it when I get into a no-loss situation and then move my stop too close, only to get stopped just before price runs.
In this example, since my initial entry order was a Buy Stop+TTO, once price hit the Upper Stop (target), the Lower Stop Loss part of the order was automatically cancelled.
3/22/2013 An Entry...2xD trend line break 90T chart
Exit with Market Indicator charts and trailing stops
