Unpublished - TRADE ANATOMY

This is my "how I do it" page - charts with explanations of my trading rationalizations and how I use the T/A described on this blog.

7/30/2013   P/A patterns and reading the indicators
How to enter a developing trend...Below are some explanations of how I "read" a chart...of course there can be other interpretations but these often work well for me. Although it's not drawn, you might see the breaking of the trend line that ended the down trend and preceded the new up trend -  also note the MOF at the 1st HL
 These two sets of charts also illustrate an example of managing multiple entries.

The 1st entry @ 15513 was not the 'best' place to start a position. The 2nd entry @ 15509 is better plus it lowers the overall cost basis. Here I've broken the rule of never adding to a losing trade - this is where the highest risk exists so both contracts use  relatively tight stops
(both are placed at or above the 1st entry stop level of 15506).
6/11/2013   Pre-major market open
Re-thinking my rule about not trading before the major markets open and have begun taking some early trades. The action is much slower but the pattern/signals are still valid:

Trade rational included on the charts - click to enlarge


I first spotted the trade potential on the left hand 90 tick chart and took a position. I then changed the time frame to 60 tick for a closer look and added more annotations. The boxed insert shows that price continued to trend up (making HHs and HLs) after I took the gain...in this example I had already taken my profit, satisfied with the quick scalp.

6/07/2013   First trade - a good way to start the day

Trade rational included on the charts - click to enlarge



 Below is an example of a Divergence scalp using a Limit order, placed at the point where price broke out of the down trend and relying on a re-test of that area for a long entry. Keep in mind that divergence fore-warns you of an imminent price reversal.

I have also seen that divergence often seems to keep downward price pressure in check - that is, it tends to minimize the amount of retrace that occurs after the initial divergent pop (which ends the former down trend). Once Price Action prints a new HH (higher-high) you can expect a new HL (higher low) to follow, thus starting a new trend.

 Note that the 'new' HL that's marked on the chart is also known as an MOF - Money on the Floor (see the Miscellaneous page for a further explanation).

180 tick chart :

In the example above there was plenty of time after the divergence appeared to enter a market order, well before 
the trend line was beat. There was also plenty of time to place a Buy-Stop at the trend line above the developing bars...
12/17/2012  SDS  Trend line break scalp
Above: Entry rationalization - 3 indicator divergence 
Below: 2 more trades later
Shorting the DJIA using the inverse SDS ETF... trade rationalization notes are on the chart

12/10/2012  TNA Inverted Head and Shoulders pattern

Above: an all day 1 minute chart showing the H&S

Below : some trades require more patience than others

TZA Bear ETF divergence entry and Stop management