May 18, 2011
- in Uncategorized by schooloftrade
Inside Trading Day vs. Outside Trading Day
– Inside vs. Outside Trading Days
o Inside = trading inside the range from yesterday
§ Nothing has changed from one day to the next, so use the current trading ranges as your highs and lows
§ It may never leave the range
§ It may break the highs/lows of the prev day’s range and then later come back in (we call that a failure)
§ Buy the lows and sell the highs of this range, and beware of the fake-out breakouts (inside days are there for a reason, you wont see many easy breakout)
o Outside = trading outside the range from yesterday
§ We assume an outside day tells us people see value in higher or lower prices, so expect the current ranges to be broken.
§ If we breakout UP
· Tells us the buyers are in charge
· The market sees value in higher prices
· Buying pullbacks will be the high % trade
· Look for the price to come back down into the range from the previous day
· While you can assume that buyers are trying to push this higher, we also must remember that the previous range will act like a price magnet.
· If we see the OPEN and the BMT inside that previous range, now you need to be aware that a price reversal may be the better trade.
§ If we break DOWN:
· Sellers in charge
· The market sees value in lower prices
· Selling retracements at new lower lows
· I also want to be aware that price may try and reverse and go back UP into the prev range above us.
· If the OPEN or the BMT is inside the range above you, consider this to be a price magnet.
o I will use my PHOD and PLOD indicators to locate the previous days range.
– When is the best time to enter a pullback?
o Watch the video the on the blog
o Members can log in and watch the videos on that topic:
§ 3 Price Patterns
§ Trigger Zone Tool
§ Wave Pattern Video
– 3 Signs of Price Reversals
o I don’t just take profit out of fear
§ Price Reversals & Fake-Out Breakouts
– Opposite of a Wedge = Expansion
– How do we use the MACD Indicator?
o Use the crosses when overbought/oversold for the highest % moves
– When do we have contract rollover? What is the current month on the Currencies and the E-mini?
o Contract Rollover for EVERY Futures Market
– What if trigger lines are the SAME price?
o 34/21/13/etc all of them are the same price, or near the same price this tells me the entire market is sideways
o If the slower timeframe has the same trigger line price level that tells me that price has been trading at that area for a LONG TIME.
– Easy ways to learn to read the tape
– Working a day job on EST
o Trade after 630pm EST (happy hour trade)
o Or from 3am to 6am EST for the Euro open
– What are the two yellows lines on our chart?
