September 26, 2011

Look for these clues before Price Reversal

Disclaimer
———————————————-
SchoolOfTrade.com and United Business Servicing, Inc. are not registered investment or trading advisers. The services and content provided by SchoolOfTrade.com and United Business Servicing, Inc. are for educational purposes only, and should not be considered investment advice in any way. U.S. Government Required Disclaimer – Commodity Futures Trading Commission. Futures and Options trading 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 futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 – These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or-over-compensated for the impact, if any, of certain market factors, such as liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Testimonials may not be representative of the experience of other clients. Testimonials are not a guarantee of future performance or success. No compensation is ever paid in exchange for any testimonials. Testimonials have not been independently verified.
———————————————-

3 Signs of a Price Reversal
·         Size
·         Speed
·         Momentum
Example… as price is rising, when I see the speed slow down (pace of tape indicator), and I see fewer BIG MONEY Buyers on my time and sales window, then followed by Momentum changing direction (JJ-Momentum Indicator) then I know we have a potential reversal.
Do we use ‘major divergence’ (divergence indicator) on ALL timeframes?
Yes!  It will work and be useful on all timeframes, however, I chose not to use it on the 4range chart.
–          Too whippy (noisy) so we get many false signals
–          It also requires a LOT of computer processing power.
I don’t use the TOTAL volume as a prediction of personality. I use the speed and the personality RIGHT NOW to qualify trades.
Which is more important?  The color or the price on your time and sales window?
Color = Green or Red (buy or sell)
Price = actual order price
Which data services do we use?
Kinetic = comes with NinjaTrader
Zen Fire = most common
CQG = global data, newer provider, in 2012 we’re expecting to get GLOBAL markets on CQG.
This method works on anything!
·         Stocks
·         Futures
·         Forex (no time and sales) but we can our technical’s (patterns)(structures)

    schooloftrade

    Click Here to Leave a Comment Below

    Leave a Reply: