Scalping, Swing and Day Trading with Sideways Markets, Channels, Wedge and Horseshoe Patterns

– Wedge, Channel, Horse-Shoe, Sideways Markets and How To Trade Them.

o Sideways Market

 The narrower the trading range, the less likely you will be able to sell the highs and buy the lows
 More likely to see a breakout of the trading range when it is very narrow.
 We don’t want to trade the middle, so a narrow range means the middle is more present.
 Slow speed at the edges means the market WANTS to stay sideways
 Fast speed at the edges means the market is just waiting for more time to break out.

o Wedge Pattern

 A little more advanced, this is when the sideways market begins to narrow in a pattern that looks like a ‘wedge’

 Wide range gives us plenty of high percentage opportunities trading inside the wedge

 Narrow wedges pose a definite threat to our trade because we know to stay away from the middle, and a narrow range has a more present middle.

 We don’t want to fall victim to a fake-out breakout and that is what happens with narrow trading ranges.

 Speed increasing in the middle of the wedge the market does NOT want to move above/below the wedge and wants to stay where it is.

 If we see slower speed in the middle, and rising speed at the highs/lows this tells us the market wants to break out, so be ready for it.

– Channel Pattern

o Slightly more advanced than the wedge, but still pretty easy to find.
o Markets trade in channels all the time, but most often when the market is slow and low volume/speed.
o First step to identifying a channel is drawing your major trend lines on your slower timeframes.

o Once you see the potential for the channel, copy and paste the same trend line that made the 1st part of the channel, and then drag it to the spot where it should go

o Look for the most # of times the market ‘tested’ the channel to define where the channel high/low should be.

o Wider ranges for channels make it easier for us to sell the highs and buy the lows

o Narrower trading range make it very difficult to trade within the channel, so we need to wait for the breakout.

 Trading breakouts with a channel are easy when you are trading against the trend of the channel
 More difficult when you are trading with the trend of the channel

– Horse-shoe Pattern

o When the market is trading in a ‘U’ shape, rising and then falling, then rising and falling again.
o Find your MAIN swing-low/high, where your trend lines will begin.
o Then find the swing-highs/lows as the market dropped/rises
o These trend lines will act as support and resistance through the day.
o How do we trade with these?

 Using these trend lines as support and resistance
 I wont use the trend line for ENTRIES because its sloppy around trend lines
 I will use my trend lines as profit target.

– How many days market data do you use for your charts?

o Fast charts = 5-10 days
o Slow Charts = 90 days (trend lines, auto levels)

– Can we apply the Fast Track Method to the ES and FDAX

o ES = 6-8 tick target, with 6-8 tick stop

 20-tick stop/target
 Always use 1:1 risk/reward ratio
 Trade with a 8-range and 13-range chart
 ES uses a different POT template
 ES uses a different FILTER for the time and sales

o FDAX = very similar to crude oil

 10-tick stop/target,
 20-tick stop/target
 Trading with 8, 13, and 21 range charts
 FDAX uses the same POT
 FDAX uses the same Filters
– Average true Range

o Measures the trading range based on the chart timeframe
o I use a 2-3 minute chart for ATR
o Im watching to see if its rising or falling
o I don’t watch the specific indicator value, only whether its rising or falling.

– Where do your stops go on the 13-range charts?

o Use the support and resistance in the market
o Never be the same from one trade to the next
o Scalpers use the same trade management on every trade, that is not the same with day traders using slower timeframes.

o Watch this video on the blog:
o The advanced course is where you will find all the exact specific instructions.

– Using the Pressure Point entry technique

o Wave entries

– Our trade room schedule:

o Closed from 2nd and re-open on Monday 13
o Wed we are closed and then re-open the 13th, which is the Monday after labor day holiday
o Sales and support teams will be working the entire time
o Trade room will be closed during that time.

– Best way to trade a small account

o Find a market that fits your needs as a trader
o Crude, gold, Russell, Euro
o Find the best pattern you want to use

 Breaker
 2-step
 Wave

o Learn your entry rules like the back of your hard
o Know your trade management

 1-contract trading has NO trade management

 Watch this video on the blog:

 You can get ALL the specific details for 1 contract trading in the advanced course.
 Identify your max loss and profit goals for today

• Important that a new trader with a small account has a well defined plan of attack when it comes to handling losses.

 Smaller accounts tend to make our job more difficult, and patience is the key component to successful trading with that small account.

– Our trade room schedule

o Open 745am
o Close around 1245pm EST

 Summer time = 1130am slow volume

o No trade room in the afternoon, I work with all of our members on 1-on-1 basis.

– Does the Euro Open give us good opportunity?

o 3am EST to 6am EST is a great time to be trading markets like:

 FDAX
 FTSE
 FESX
 Euro
 Pound
 Aussie
 Crude (if we have volume)
 Gold (if we have volume)