Trading notes 01/13/12
Happy New Year! I just finished winding down the end of my holiday
vacation this week and am getting to my first post of the new year. I hope
everyone had a restful holiday season and that you are ready to get back
to work with some good trading.
As we start the year I want to take the time to go back over some of the
basics in the next few posts and encourage you to not only use the tools
you have learned for your daytrading but also for your swing and
longer-term trading. Today I will start one of the daily chart tools that we
can use to both help shape our bias for intraday trades but also capture
decent chunks out of the market directly off the daily chart. I am referring to
the first trading exercise from the training material. This is the one where
we use one of the basic channels to help determine a direction for trading
and then working off a level or the MC once that direction is known. Here is
a reminder of what that looks like. The red circles represent the shorts and
the green circles represent the longs. Most of the trades over this last year
were in directional markets except for the consolidation over the Summer.
There were 28-total setups with 23-winning setups and 5-losing ones. Two
of the losing setups were in the consolidation and the others were on
directions changes, which is typical.
This is a basic continuation type look and can be done with or without the
channel as it is mainly based on the price action and not the indicators.
The channel will help with some of the minimum stops but as most of you
know I like using actual price swings and levels for those anyhow so they
truly are optional. For the play directly on the daily chart just work them like
the ones shown here.
We can use the same information we are using for the daily setups to help
our daytrading as well. By looking at where the daily is in its setup cycle we
can increase our confidence and accuracy in playing in a particular
direction. If the daily is at its launch point then we can start to look for that
intraday shift back towards the trend and position ourselves early for it. If
the daily is far outside of its channel after having just completed a cycle
then we can start to look for intraday fade plays back towards its launch
area. If we have noticed that the daily is in a consolidation then we want to
lower our expectations for vertical moves except for where we are working
off the barriers of the consolidation. Keeping your eyes on the bigger
picture will help you be more patient during the day and wait on the real
moves to start. They always do!
Anyhow, refer back to phase-4 of the training exercises for more detail on
these setups or shoot me an email for more help. We can also meet in the
trading room to go over how to implement this simple strategy into your
trading arsenal, including the money management side of it. Refer to the
video in the trading room bulletin for how to draw the support and
resistance levels.
God bless you ~
Here is the prior post.
|
|
|
 |
|
|
|
|
