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Day Trading Patterns; Easy Ways to Find Trading Opportunities
– Tips and Tricks for Identifying Patterns
o Keep it simple
o Use range charts
Compare a 3-min to a 13-range
• Minute charts are VERY different, sloppy, sideways, big candles, small candles
• Range charts ALWAYS look the same
o Focus on 1 market at a time and learn that 1 market first
Each market has a different personality
o Stay away from the faster timeframes
1min
89tick
4-range
These are way too whippy and false-moves to be consistently watching patterns while you learn.
Focus on the 13. 21, 34, 55, 89, 144 Range Charts (fibs)
o Limit your distractions
Only watch for THESE pattern
Don’t overcomplicate it, keep it simple
o Review your trades every day
Why did you enter?
Why didn’t you enter?
Where did the trade go?
o Study them over and over with consistency
Flashcards: print out the charts and review them before bed, when you wake up, throughout the day
Market Replay: record the market and then replay the price action and you can look for patterns
Beginner’s Course has a video on the 3 patterns, watch this video, and ask questions.
Don’t be afraid to ask JJ for help identifying them.
– Contract Rollover:
o Blog search for : contract rollover and watch the video
o Crude rolls over each month (20th)
o Gold rolls every other month
o Dollar, Currencies, Emini roll over quarterly
– What are the different colors on the time and sales
o In the download section: ‘time and sales properties’
o Check out the advanced course download section for properties on the Tape
– Ways to sell the lows and buy the highs
o Wave pattern
Buy the pullback
Sell the retracement
o 2-step reversal if it fails
– Can a market be weak to the long side and the short side?
o YES. sideways and sloppy, indecisive
– Wave Pattern; different ways to enter the trade
o Aggressive: enter at the test of the trigger line
o Moderate: wait for momentum to confirm and then take the trade
o Conservative: use multiple timeframes to plan the entry using a 2-step pattern
– How do we determine a low volume day?
o Total volume is only used for contract rollover
Total volume does NOT tell me whats happening NOW
We may have ALL the volume at 8am, and now its 330pm and its slow.
o Speed of the market
I need to know what’s happening RIGHT NOW
• Time & Sales = is it moving quickly, and with LARGE ORDERS
• Pace of Tape Indicator (POT) measures the speed of the orders
o Heavy speed = heavy volume
o Low speed = low volume
• Tells me whats happening NOW.
o Red Pace of tape (less than 100) = very slow
o Dollar is narrow trading range = very high risk
o ATR is falling
o If you see these at 8am (or whenever you begin your day) use extra caution.
– My computer keeps jamming
o Stop running programs you do not need
Remove anti-virus
Remove the firewall
Close charts you don’t need
RAM is the easiest way to improve your computer’s performance.
– What type of entries do we use?
o Limit Orders = Fast Track
o Buy / Sell Stops = Trap Entry / day trading
o Never use market orders (sloppy)
– Divergence Method Example
o DO MORE training in our members-only training next week
o Works on any market, any timeframe
– Setting up Automated Trade Management Strategies
o Adv Course = Setting up your DOM and ATM
o TUTORIAL: SETTING UP YOUR TRADING DOM W/ ATM STRATEGIES
– Open AND close:
o Always use the faster timeframe to see the Open and CLOSe
o If your OPEN/CLOSE does not match mine
Re-load your data
My data may need to be reloaded.
– Which markets will give us the most patterns:
o Aussie Dollar
o FDAX
o Crude Oil
o Gold
o Russell
– Which markets will give us fewer patterns?
o Eurostoxx FESX
o E-mini ES
o 30yr Bonds
o T-Notes
– Anything cheaper than $10/tick
o Pound = 6.25
o YM = 5.00
o NQ = 5.00
– Why is lunchtime so risky?
o Less volume
o Fake-out breakouts
o Market manipulation
o No news events to act as catalyst