Mr. Charts
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I'm now going to move this on into a slightly different scenario. As I've said many times the method in this thread is only one of a dozen I use but it can be adapted as in this example from today.
AIG was on my watch list and although I snatched 20c from it in a very early momentum trade I kept an eye on it in case it presented a nice swing trade later.
It did.
This was traded on 5 min candles and produced a 70c move.
Everyone knows about dojis "after" trends forewarning of reversals; except that is only correct part of the time, there are plenty of dojis in the body of trends.
In this instance it worked well, but the market was trying to turn and if you have a feed and look at the 1 min candles you'll see a classic test of the low.
I have the strong advantage of using depth of market (level 2 T&S) but anyone could have traded this without the confirmation I saw on depth. It's straightforward on charts.
The exit was because I saw sudden selling on depth.
This was getting in close to the beginning of a new trend - an upward one.
Richard
AIG was on my watch list and although I snatched 20c from it in a very early momentum trade I kept an eye on it in case it presented a nice swing trade later.
It did.
This was traded on 5 min candles and produced a 70c move.
Everyone knows about dojis "after" trends forewarning of reversals; except that is only correct part of the time, there are plenty of dojis in the body of trends.
In this instance it worked well, but the market was trying to turn and if you have a feed and look at the 1 min candles you'll see a classic test of the low.
I have the strong advantage of using depth of market (level 2 T&S) but anyone could have traded this without the confirmation I saw on depth. It's straightforward on charts.
The exit was because I saw sudden selling on depth.
This was getting in close to the beginning of a new trend - an upward one.
Richard