2 min action
something I wanted to share with everyone - something that only recently struck me with its simplicity and beauty. Experienced darksiders pls forgive me if I am divulging Pinoccio's secrets here :cheesy:
2 assumptions:
a) It is a NON-TREND day; and
b) u just go for bigger trades, that is u don't scalp.
I will come back to these assumptions later.
Now look at any pair of good entries from today: A-B, C-D, E-F etc.... We are looking for the points where a sequence of HH, HLs changes into a sequence of LL, LHs (or vice versa). Let us talk about C-D short entry e.g. WHERE DO WE ENTRY at exactly the same price, at C or D?
At point C u r guaranteed a LL, so previous sequence of HH, HLs has obviously gone pete tong
However, u will obviously have a LH at some point soon (point D) which is also a good thing for selling high
IMHO shorting at C (on break-down of previous Low) is GENERALLY A RISKIER ENTRY than shorting the next LH (point D). HOWEVER, at point C u perhaps DO WANT to short C rather than waiting for D, because by 11:00 u had the "full house" of Tick neg div, Naz neg div vs. SPX and XBD neg div vs. SPX.
By contrast reverse to Long at E-F level would perhaps justify waiting for the pullback to F (HL) rather than jumping in at E, since Tick, SOX, XBD etc. hints were rather vague at 12:30.
Now my assumptions:
a) This works on non-trend days. On a trending day, pullbacks WILL NOT go as low (high) as previous High (Low). 20 ema/5 min rule is the best u can get then.
b) of coz if u scalp, u want to squeeze pts out of jumping in at E, bagging 1.5 - 3 pts, and then safely re-enter at F point.
