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A Traders daily plan 13

in the last segment of this educational series we spoke of qualifying high probability day conditions in a pre market scan and than started introducing high probability entry points for each of these conditions 1.) Scan: evaluate weekly or daily trend - are we long/sideways/short 2.) Scan: evaluate pre market to determine a high probability of a daily condition: a. Trend day (TD) b. directional c. sideways directional d. sideways e. sideways counter directional for condition "c" , which we had in the index markets for a good 4 weeks we identified a simple entry pattern which is fading an extreme in the direction of the trend post "A Traders daily plan 11" gives detailed information about this entry methodology today we will be talking about another easy to identify and high probability pattern that is a frequent setup for condition"c" day configuration one quick note prior since I often got asked as to why I am stating (like in the last post) that we need as traders a system all market variants: the market comes in waves: it trades sideways up,steep up,sideways,down,steep down and sideways again and in addition has other formations as well like smaller and wider rangers,leading and lagging behavior,news and six sigma events,chop,various volume and time distributions throughout the day asf which means it has an extreme high variability Now if you are an expert in one or two of these configurations and the market throws at you 3 or 4 months or even longer a cycle where your expertise isn't represented in opportunities your perception changes meaning it will be extremely hard sitting through this length of time with the discipline not executing at all and it is much more likely to get tempted executing sub par setups with a skill set of a variability of tools to exploit opportunities within the market according to its variability the likelihood of such mistakes is drastically reduced so it is of advantage to at least have for all the major elem,nts the amrekt represents itself have tools for participation now some examples for the "V" formation a "V" is literally a visual V from the alphabet where prices decline at first but the price retracement is between 80 to 100 percent shortly after markets consensus has sharply changed while originally there was a strong bearish consensus now just a brief while later the bulls are in control the msot important rule about a "V" is to never short it (it feels intuitively that one would want to try a short but simply refrain from doing so) one way to exploit it as a setup is that most often after a "V" there is a pause which can be extended in time than a small retracement which timed with other filters is an ideal entry point for a continuation to the long side and a much more low risk entry point than a breakout strategy at new highs here an example of the S&P500 futures index market we are selling off at the open and retrace all the way back by 11:50eastern to previous highs of the day trade sideways for 90 min followed by a small retracement and the green arrow marks the spot for a low risk entry point for a continuation long entry (charts courtesy of TradeStation)

this is the same chart just on a 15 min chart to visualize the "V" even more clearly

another example of the recent market similar scenario of ES trading lower on the open but prices finding themselves near the highs of the day by 11:00 eastern time followed by a tight range sideways trading for more than an hour a small retracement and the green arrow markets the spot again for a low risk continuation entry to the long side

this again is the same day just represented in a timeframe higher 915 min) to illustrate where the "V" pattern has its name from

same rules count for the "inverse V" when this pattern is being traded from the short side and again the most important rule about this formation is to not fade it (most often it is important in trading to know what "not do do" even more importantly than "what to do") Important Trading Risks and Earnings Disclaimers - Terms of Use RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice. U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose. NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose. EARNINGS DISCLAIMER: EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES, IDEAS OR PRODUCTS PRESENTED. EXAMPLES PRESENTED ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All information presented or any product purchased from this website is for educational and research purposes only and is not intended to provide financial advice. Any statement about profits or income, expressed or implied, does not represent a guarantee. This presentation is neither a solicitation nor an offer to Buy/Sell options, futures stocks or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. Get the advice of a competent financial advisor before investing your money in any financial instrument. Terms of Use: Your use of this educational website indicates your acceptance of these disclaimers. In addition, you agree to hold harmless the publisher and instructors personally and collectively for any losses of capital, if any, that may result from the use of the information. In other words, you must make your own decisions, be responsible for your own decisions and trade at your own risk.

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