August 3, 2011
- in Uncategorized by schooloftrade
Earn profit from Range-Bound Markets the EASY way
Trading Range-Bound Markets?
Trending markets make new higher highs and they show us lots of price action to support the trend. Higher Lows, higher highs, lots of speed and big money buyers. Easy to tell WHO controls price and where it wants to go.
Range-Bound Market (sideways market/range) does not have higher highs and lower lows, and does not show us consistent price action to support a trend. Its hard to tell WHO is in control of price and where it wants to go.
· Upper-third: looking to sell and then buy a pullback with new higher highs
· The middle-third: avoid trading the middle
· Lower-third: looking for buying opportunities and then selling retracements with new lower lows.
Inside Day = we are above PLOD and below the PHOD, which means the range from yesterday is still acceptable. So sell the highs and buy the lows because we don’t expect to have a breakout environment today until we get above the PHOD or below the PLOD.
Why do we use 24 hour charts? So i can see where the overnight highs and lows are.
Gap Chart = only shows you the times when the market is open.
How do we enter our trades on the 13range chart?
· If the pattern is on the 13r I take the trade when i see speed and size on my tape.
· If the pattern is NOT on the 13r, and its just the level on the 13r I can use the 4range chart for the entry.
Which momentum indicator is the most important?
· The chart where you see the pattern (not the entry).
· You also want the SLOWER timeframes to confirm, the more the merrier.
