Wednesday, September 26, 2012

main strategy:

1.  Identify overall trend direction.

2.  Look for a  Clear Trendline established by 3 touches.   Short/long the break with tight stop.

  Most of time the market is chopping around -- trying to establish a clear trend line.  Once the Trend Line emerges (look at 5 or 15 min. candles for clarity -- harder to see on 1-min charts) -- then the Market recognizes where the buyers/sellers agree.  The move from there is then based on the Higher Timeframe trend.

3.  Trail stop.

 Could also wait for 5 period to x-over 9 period on sharp moves -- keeps you in the trend.

The move will be sharp and fast.  It's the waiting for the proper set up that is hard.

The 3 touches is the establishing/distribution or accumulation before the break.   It's necessary to fuel to impending move.

4.  The Move often ends with exhaustion -- signalled by

   a)  huge volume candle, often through a whole number (stop orders)
  b) break of the sharp trendline  (green 1-min candles)

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