Intra-Day Trading Techniques And Trading Day Preparation
Pristine.com PresentsIntra-Day Trading Techniquesand Trading Day PreparationWithDan GibbyLead Moderator, Pristine.com Advanced Stocks and DerivativesTrading Room and West Coast ManagerCopyright 2003, Pristine Capital Holdings, Inc.
DisclaimerIt should not be assumed that the methods, techniques, or indicators presented in this book and seminar will beprofitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples inthis book and seminar are for educational purposes only. This is not a solicitation of any order to buy or sell.“HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUALTRADING. ALSO, SINCE THE TRADES IN THIS BOOK and SEMINAR HAVE NOT ACTUALLY BEENEXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT,IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADINGPROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THEBENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR ISLIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.”The authors and publisher assume no responsibilities for actions taken by readers. The authors and publisher are notproviding investment advice. The authors and publisher do not make any claims, promises, or guarantees that anysuggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. Allreaders and seminar attendees assume all risk, including but not limited to the risk of trading losses.Day Trading can result in large losses and may not be an activity suitable for everyone.Copyright 1994-2003 by Pristine Capital Holdings, Inc. All rights reserved. Printed in the United States of America.Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced ordistributed in any form or by any means, or stored in a database or retrieval system, without prior written permission ofthe publisher.
Table of ContentsIntroductionThe Key ConceptsDay Trading DefinedCandlesticksMoving AveragesPsychological RequirementsSubjectivity of T/AFoundationCandlesticks SimplifiedMoving Average InterpretationPristine Buy & Sell SetupMultiple Times FramesSupport & ResistanceMarket TimingPutting It TogetherCombining Foundation andKey Concepts for MasteringIntra-day Trading
IntroductionIntroduction
Pristine Intra-day TradingWhat is Intra-day Trading?A style that covers a holding period of several minutes to hours.hoursRequires an objective method for making trading decisions.This style of trading has become widely accepted recently.Requires the ability to accept change without reservation.Day trading is best used on active, highly liquid stocks.Day traders try to capture smaller gains with minimal dollar risk.riskDay trading is a style of trading that may not be suitable for ALL!!ALL5
Psychological RequirementsPsychological Trading ive analysis must be reduced or eliminated.A systematic objective Method of interpretation is needed.This builds a thought process which builds Confidence.PatienceDisciplineBecomes Your Job!
Subjective AnalysisMaking decisions basedon a derivative of theactual price bars leadsto Subjective Analysis.Traders monkey with thesettings of indicators toget desired results. Thepossibilities are endless!MACDRSI-14We will base our analysison the “Universal Truth”in T/A. That is price!7
Pristine Trade Consideration WorksheetIt perplexes us that many traders haphazardly jump into trades,risking significant capital, without having a carefully thought outplan. You should create the plan before the trade, not during. Thishelps us keep the guess work and emotions out of trading, and tofocus on what is happening at the moment.Trend of broader markets (includinganalysis of support and resistance; pivots;retracement; bar-by-bar analysis; volume;and candlestick chart patterns)Time of dayMarket internals (bullish or bearish bias)Consistent with your Trading Plan-TICK-TRINAny subjective data that might supportthe objective data (e.g., oscillators, movingaverages, Fibonacci, divergence, etc.)-VIX-Put-call ratioTrend of sector of interest (same analysis)Compelling technical pattern of stock ofinterest (same analysis)Relative strength or weaknessGenerous reward-risk ratioSufficient liquidity (over 1 million averagedaily volume)Level 2 supports entry, including thicklevels and depthNo unexpected market or stock news
Mastertrader.com One Page SetupCustomizableLinkingAlertingOrder EntryScanningDirect AccessTrailingStopsLevel ll9
The Building BlocksFoundation
Simplified Candle LanguageSix Candle ConceptsChanging of the Guard - COGWide Range Body - WRBNarrow Range Body – NRNarrowing Range Bodies - NRBTopping Tail - TTBottoming Tail - BTAll give traders theSame Message.The probability of thecurrent trend changingis increasing.A high probabilityopportunity mayexist to trade.
Intra-Day ToolsIntra-Day ToolsPrimary Charting Tool: Price CandlesticksSecondary Charting Tools: Volume, 20 & 200period moving averagesTime Periods: 60-Min.-The long-term trend, 5Min. the short-term trend.Market Timing Tools: S&P Futures, NYSE TICK,NYSE TRIN, Bonds Price or Yields.
Intra-day Charting200-Period MASecondary20-Period MASecondaryCandlesticksPrimaryColor Coded VolumeSecondary
The Pristine Buy and Sell SetupPristine Buy & Sell Setup Facts:The setup can be traded in all time frames.It is a set of bars that occurs in a detailed formation.This combination of bars is a segment or smallerpart of the overall pattern.It offers high probability with low risk.
The Pristine Buy and Sell SetupEach new bar opens in the area of the prior bar’s close and alsocloses above/below its opening price, until a reversal of that occurs.The setup is complete after a reversal candle has formed.Sell SetupOpenCloseOpenCloseBuy SetupPristine Capital Holdings, Inc.15
The Pristine Buy and Sell SetupThis is NOT what we are looking for !These candles overlap each other and do not have thepredictability we are looking for.Pristine Capital Holdings, Inc.16
Moving Average AnalysisMA Trend Guidelines for TradingLong positions are favored when prices are Above their 20-MA on a60-Min. chart. Entry points are found on 5- or 15-Min. charts.Short positions are favored when prices are Below their 20-MA on a60-Min. chart. Entry points are found on 5- or 15-Min charts.Long positions are considered when prices are extended Below the20-MA on a 60-Min. but Above their 20-MA on the 5-Min. chart.Short positions are considered when prices are extended Above the 20MA on a 60-Min. but Below their 20-MA on the 5-Min. chart.Climatic buy and sell setups on the 5-Min. chart can be considered if: Itoccurred far from Supply or Demand and is in an are of Supply or Demand.Pristine Capital Holdings, Inc.17
Moving Average GuidelinesLong Term Intra-Day200-MA20-MAWhen Prices declineBelow the 20-MA.When Prices riseAbove the 20-MA.Favor Short TradesFavor Long Trades.The 60-MIN. ChartPristine Capital Holdings, Inc.
Moving Average GuidelinesShort-Term Trend Intra-dayWhen Prices rise Above the20-MA. on the 60-Min andthe 5-Min. only trade long.20-MAPBSWhen the 20-MA is intersecting themiddle of the candles and theyoverlap each other – Stand Aside!5-Min.200-MA19
Moving Average Prices moveabove 20-MA.20-MAExtendedBearish TrendPristine Capital Holdings, Inc.
UnderstandingCandlesticks21
Candle LanguageOpen Beginning S / DLow Demand, SupportHigh Supply, ResistanceClose Ending S / DBody Degree by which thebattle has been won or lost.HighHighCloseOpenBodyOpenLowBodyCloseLowBulls WinBears WinPristine Capital Holdings, Inc.22
Candle LanguageA reversal candle’s potency is measured by the Depth orLevel of penetration into the prior candle.Tails on a candle either increase or decrease supply: TopTails (TT) increase; and Bottom Tails (BT) decrease.Expanding range candle bodies tell us buying or sellingpower is being ignited or exhausted. Wide Range Bar (WRB)Narrow or Narrowing range candle bodies tell us volatility islow or momentum is decreasing. BT, TT, NR, NRB
Candle LanguageDo NOT assume the outcome of the current candle.A candle is not complete until that time period ends.Common Candle Terms:Engulfing Bar, Piercing Bar,Dark Cloud Cover, Harami,Thrusting Line.COG – These have differentlevels of penetration into theprior bar’s range.Doji, Star, Hammer, HangmanNR, BT, TT – These are differentlevels of a slowing in momentum.24
Candle LanguageChanging of the Guard Bar - COGA Bullish COG is defined as three or more consecutivered bars followed by a green bar.A Bearish COG is defined as three or more consecutivegreen bars followed by a red bar.Pristine Tip: While there are different variations, the message is alwaysthe same ! A reversal in momentum has occurred!The potency of the signals are increasing.Bullish COGsBearish COGs
Candle LanguageNarrowing Range Bars - NRBA series of bars in which the difference between the highs and lows isNarrowing.Pristine Tip: While there are different variations, the message isalways the same ! A slowing in momentum is occurring!NarrowingRange Bars
Candle LanguageTopping Tail Bars - TTBars in which prices had been higher, then supply forced priceslower into the lower part of the bars range.Pristine Tip: While there are different variations, the message isalways the same ! Distribution has occurred !Topping Tail
Candle LanguageBottoming Tail Bars - BTBars in which prices had been lower, then demand forced priceshigher into the upper part of the bars range.Pristine Tip: While there are different variations, the message isalways the same! Accumulation has occurred !Bottoming Tail
Candle LanguageNarrow Range Bodies (NR)Bars in which the body of the candle is small relative to the overall lengthof the candle. They may have Tails on either side of the body.Pristine Tip: While there are different variations, the message isalways the same ! A slowing in momentum has occurred!Narrow BodiesNarrow Body29
Candle LanguageWide Range Bar (WRB)A bar in which the candle’s body is relatively wide compared tothe most recent barsA Wide Range Bar after a period of low volatility ignites momentumin that direction.A Wide Range Bar after an extended advance or decline typicallyhappens near the end of a move. A NR or COG signals the turn.WRB IgnitesWRB EndsWRB EndsWRB Ignites30
Candle LanguageNBNRBCOGsCOGsDark Cloud CoverPiercing PatternBullish EngulfingWRBBearish EngulfingCounter Attack LinesThrusting LinesBTFocus on the message ofthe pattern, not terms.WRBNBWhatever you call them,they are reversal signals!COGs
Supply& Demand32
Support and Resistance AnalysisBasic Support and Resistance GuidelinesMinor SupportMajor Support and ResistanceMinor ResistanceResistance once broken becomes Support; Supply becomes Demand.Support once broken becomes Resistance; Demand becomes Supply.A reversal candle must form in these areas to consider taking action.Pristine Capital Holdings, Inc.33
Support and Resistance AnalysisActual Support and ResistanceReading actualSupply and Demand(S-D) is the key toobjective chartreading and higherprobability trades.A series of price bars.Prior highs / lows / bases.An unfilled gap between price bars.Subjective Support and ResistanceMoving AveragesRetracementsTrendlinesTimeAlso guides to anticipatereversal points.Without price points inthe same area, these arePristine Capital Holdings, Inc.less significant.
Support and Resistance QuestionsReading Supply and Demand is the key to objective chart reading andhigher probability trades. Ask these questions when analyzing.What is the “Potency” of Supply and Demand above and below?Is that Supply and Demand area, a pivot (1-3 bars) or a base?What is the distance between Supply and Demand ?Has there been a retest or a break of a prior high – low?What is the depth or penetration into the prior candle or prior S-D?Price bars are the universal truth in technical analysis: Support or Demand, andResistance or Supply.The patterns they form represent commitment with real money. that is notsubjective, and is what moves the market.35
Support and Resistance AnalysisPivots or “V” Reversals: one to three bar reversal points within a trend.They are focal points; the Supply or Demand there is not that significant.Multiple bar reversal points are significant areas of Supply or Demand.They form rounding or square formations within a trend.Pristine Capital Holdings, Inc.36
Support and Resistance AnalysisTTUnfilled GapResistancePrior LowSupportAnticipate sellers in thearea of Unfilled Gap.Anticipate Buyers in the area of Prior Lows.Pristine Capital Holdings, Inc.
Support and Resistance AnalysisAnticipate sellers in the area of Prior Highs.Prior HighResistanceTTAnticipate a reversal inthe area of Unfilled Gap.BTUnfilled GapSupportPristine Capital Holdings, Inc.
Support and Resistance AnalysisAnticipate SellersNBResistance at Prior BaseTIP: What was Supportwill become Resistance.
MovingAverages40
Moving Average AnalysisBasic Moving Average GuidelinesSimple Moving Averages are used; no other types are necessary.A 20-period Moving Average will be used in all time frames.The slope of Moving Averages is an indication of trend & trend strength.The odds of a successful trade are in the direction of the 20-period MA.Converging Moving Averages point to inflection points. If a decrease inVolatility brings the MAs together, an increase should be at hand.The color of Moving Averages on various time frames should be consistent.Moving Averages are guides and speed up the analysis process; candles tellus if these points are tradable.41
Moving Average AnalysisThe relationship between MAs and/orthe relationship between Price and MAsServe as:An Overbought / Oversold IndicatorA Bullish / Bearish Divergence IndicatorA Guide to price Support & ResistanceA Tool to help anticipate where a reversal may occurA Risk – Reward IndicatorA Relative Strength Indicator
Moving Average AnalysisAn Overbought / Oversold Indicator200-MAAs the 20- and 200MAs move fartherapart, the odds of areversal increase.20-MAThese are subjective termspotentially leading to falsebeliefs as to what is possible.As prices movefarther away fromthe 20-MA, odds ofa reversal increase.Pristine Capital Holdings, Inc.43
Moving Average AnalysisA Momentum or Bullish/Bearish Divergence Indicator200-MA20-MANew Low DivergenceA COG after a new highor new low, accompaniedby a smaller distancebetween price and the 20MA, signals a slowing inMomentum and aDivergence.COGPristine Capital Holdings, Inc.44
Moving Average AnalysisA Guide to Support & Resistance200-MAPrice ResistancePrice ResistanceLook to theLeftPrice SupportLooking to the leftof an MA shouldpoint toward anarea of support orresistance.A Moving Avg. isa tool that helpsthe traderanticipate whereA to enter positionsM20or take profits.
Moving Average AnalysisAnticipate Entry/Exit and Risk/Reward200-MAAs prices moveTIP: The correction from thefurther from anfirst point of resistanceMA odds of areversal increase. increases the odds that thisPotential Rewardpoint will be overcome.Distancebetween MAsAnticipatedExit20-MARISK isbelow COGAnticipatedEntryPristine Capital Holdings, Inc.
Moving Average AnalysisA Relative Strength IndicatorComparing the MAs of a stock or index to another will tell us which is 00-MAWideWideWeakerNarrow
Moving Average AnalysisTIP: The slope of the 20-MAcould not be this steep unlessthere had been prior strength!20-MA200-MAConvergenceWhen the 20 and200 period MovingAverages converge,look for a rise involatility.The slope of the 20MA should point tothe direction.Assess the next areaof supply.Potency & Distance48
RecognizingQuality49
Recognizing QualityTrend QualityThe quality of a trend is key to the reliability of our setups.When a trend is tight, the majority of opening prices will be in the areaof a prior bar’s close. Typically, not more than 20% into that range.This pattern of opens and closes will produce few Engulfing, Piercingor Outside bars in a tight trend. A picture of certainty.Pullbacks against a tight trend should fail in the area ofminor Demand (Uptrend) or minor Supply (Downtrend).Not all trends are tradable!50
Recognizing QualityA Picture of CertaintyOpens are not more than20% into prior ranges.A Picture of UncertaintyOpens are 50% or moreinto prior ranges.51
Recognizing QualityUncertaintyAbsence ofGaps and TailsCertaintyMany Gaps betweenbars, Topping andBottoming TailsDay to day volatility also iscontracting. Gaps betweenbars and tails has decreased
Recognizing QualityTrend Quality ChangesUncertaintyWHIPPYVery tight trends canhave large moveswithout pulling back.When a pullback doesoccur, the odds of thetrend continuing arevery high.CertaintyTIGHTFirst PullbackChanges in trendquality are a warning.They often precede abreak of a trend.53
Recognizing QualityA Whippy Uncertain patternbecomes Tight and Certain.UncertaintyHH-2HH-1CertaintyHL-2Two Pivot highsare overcome,giving the intraday trader a clueof what may come.HL-154
Recognizing QualityWhat are the relationship of the candles’ opens and closes in the pattern?Are the bars in the pattern overlapping each other?What are the size of the bars that preceded the reversal?What is the size and type of bar that signaled the turn?Are the arrangement of high and low pivots "V" or is there congestion?Are there an excessive amount of gaps?Are the an excessive amount of bottom and top tails?Are retracements against the prior move deep or shallow?55
Buy and SellSetups56
S & R Trading GuidelinesShorting SetupsTrading with adowntrend: Short a PSSBreakdowns out a Base:Short a PSS, Fade a PBSBASEPSSTTTTPBS57
S & R Trading GuidelinesBuying SetupsRallies out of a Base: Buya PBS, Fade a Bearish COG.Trading with anuptrend: Buy a PBS.BearishCOGWRBPBSBTBASE58
Pristine Buy Setup After Strength4 Bars, Supply IS Increasing, Caution!Each new bars’ open is in the area of theStrength,prior bars’ close.Buy PBSThey do not overlap or gap into the priorbar.The pattern is Tight, Certain, Predicable!Strength,PBS aboveBuy PBSMinor SupportStrength,Buy PBSPBS at Minor SupportPBS at Minor SupportTops and Bottomsare V-Patterns !The First PBS began from a Base, not a V Pattern
Market Timing60
Market Timing ToolsValue of Market InternalsMarket Internals are used to keep your opinion about the market’sdirection in alignment with the market, not what you “want to happen.”Need to constantly interpret prior support and resistance levels, as wellas the trend of internals.Best used in combination with other internals for confirmation.We can anticipate probable market turns when internals reach extremelevels, or use them for confirmation of a bullish or bearish bias.Odds of pattern failure decreases by having internals in agreement withyour trading signals.Conflicting signals give valuable clues to stand aside.61
Market Timing ToolsThe TRIN Indicator: Used to determine who is in control of the market.Readings below 1.0 indicate more volume is entering advancing issues; Buyers in control.Readings above 1.0 indicate more volume is entering declining issues; Sellers in control.areRising Trin is BearishSellersDeclining Trin is BullishincontrolAn Inverse IndicatorBuyersare in con5-Min.trolPristine Capital Holdings, Inc.
Market Timing ToolsThe TICK Indicator:Used to determine Market strength and directional changes.Readings above 0 indicate more stocks trading on upticks, favors longs.Readings below 0 indicate more stocks trading on downticks, favors shorts.Prior highs and lows are used as points of support and resistance in the broad market. 1000 indicates excessive buying; odds of a reversal are very high.- 1000 indicates excessive selling; odds of a reversal are very high.Broad Market Resistance5-Min.Broad Market SupportPristine Capital Holdings, Inc.
Market Timing ToolsThe Futures market is watched closelyas a leading indicator of equities.S&P 500 FuturesFutures traders watch the Bond marketas a leading indicator.5-Min.Money flows between the two.10 Year Note Prices10 Year Note Yields5-Min.5-Min.64
Market Timing ToolsBond YieldsAbove the 20MAFuturesAbove the 20MADo not fightthis trend !Bond Yieldstrending abovethe 20-MAEquity Futurestrending abovethe 20-MATICK IndicatorOscillating above 0TRIN IndicatorBelow the 20MATICK indicatoroscillating above 0TRIN indicatortrending belowthe 20-MA65
Putting it All TogetherReview
Putting It All TogetherStart with thelonger time frame.200-MADivergenceSupport is tested.A WRBforms. Be Alert!20-MAA COG signalsthe decline is over.Moving Avg.Divergence.Prior Price SupportWRB60-Min.COGCheck internalsand the 5-Min.
Putting It All TogetherTT1Trin above 1.0and Rising.Sellers are incontrol.The TRIN Indicator22 Trin above 1.013WRB3 Buyers takingcontrol, noteangle.WRBBT5-Min.but Declining.Sellers arelosing control.
Putting It All TogetherThe TICK IndicatorTriple BottomTTResistance 100%A 100%Retracement intoresistance signalsStrength.Look to buythe pullback.BT15-Min.Support23 COGTICK enters theBroad MarketResistance Area.Odds increasethat momentumwill stall.
Putting It All TogetherTTResistance200-MANRTTWRBOversold MAs Wide.The move abovethe 20-MA moveswell into supply.Strength!After a PBS, BUY!COG20-MA5-Min.A New low was madeas the Tick reachedMajor Market Support!Target 200-MAPrice Resistance.Offer at Resistance.60-Min. is Bearish.
Putting It All TogetherTTTTTRINltroSellersnCoiningConta kt 200-MASelleDivergence20-MAPrior Low Support60-Min.BTCOGPristine Capital Holdings,5-Min. Inc.200-MArsinCon trTTolCOG20-MA
Setups From UniverseSetups (Provided MeetsYour Trading Plan!)1. Pristine Buy Setup2. Pristine Sell Setup3. Volume spikes4. Breakouts5. WRBs at S - DThen Cherry Pick From List:9Trend on multiple time frames9Tight vs. Whippy9 Support/resistance9 Sector strength6. Tails9 Relative Strength7. Failed patterns9 MAs8. CBS, CSS9 Best reward-risk9. Engulfing Bars9 No pending news72
Updating Market InternalsAt the end of each market day, we mark off significant support andresistance points on the market internals and broader markets,extending the lines into the following day for reference points (NOTE:and continuously update them intra-day). See how well the morning’srange on the second day held the prior day’s highs and lows? Then theTICK exploded through resistance after the doldrums with the futures.ResistanceSupport73
Trading Day PreparationandAdjusting Market Bias InThe Morning ReversalPeriods74
Trading Day PreparationTrading Preparation Begins After The Prior Day’s Market CloseMonitor post-market news and stock movers to see how they affectexisting or new trade opportunities.Review day’s trades/charts and complete Trading Diary.Review all watch list items for possible inclusion in next day’s watch list.Analyze (on multiple time frames) trend, support and resistance of:1. Broader markets2. Sectors3. Market internalsGo exercise and take a break to start back fresh!75
Sector Analysis76
Trading Day PreparationThen Begin Search For New Plays (Long and Short)1.Your “universe” of stocks2.Pristine ESP (late day anticipation at 3:30 pm ET and end of day scans,favoring those consistent with your “market bias”)3.TC 2000 (see Resources, ATR, for suggested scans), Metastock,www.Mastertrader.com4.In-depth analysis of stocks in sectors of interest5.Possible “market moving stocks” in the news6.Divide list into longs and shorts, and highlight best 5 in each.7.Check earnings dates on stocks of interest and sector “Generals.”8.Check key economic reports due (pre-market and 10 a.m. EST).9.Project horizontal support/resistance on futures and internals. Also set alertsat significant points.77
Setups From UniverseSetups (Provided MeetsYour Trading Plan!)1. Pristine Buy Setup2. Pristine Sell Setup3. Volume spikes4. Breakouts5. WRBs at S - DThen Cherry Pick From List:9Trend on multiple time frames9Tight vs. Whippy9 Support/resistance9 Sector strength6. Tails9 Relative Strength7. Failed patterns9 MAs8. CBS, CSS9 Best reward-risk9. Engulfing Bars9 No pending news78
Updating Market InternalsAt the end of each market day, we mark off significant support andresistance points on the market internals and broader markets,extending the lines into the following day for reference points (NOTE:and continuously update them intra-day). See how well the morning’srange on the second day held the prior day’s highs and lows? Then theTICK exploded through resistance after the doldrums with the futures.ResistanceSupport79
Pre-Market Research1. Research pre-market news and movers (Briefing.com, Isld.com,Bloomberg.com, Nasdaq.com’s Heat Map).2. Determine where futures are gapping to (support or resistance).3. Mark overnight globex futures highs/lows, E-Mini’s.4. Watch trend of any large gap in futures pre-market.5. Sort minder by Percentage and Price Gap.6. Check gaps on open trades and trades of interest.7. Develop trading “bias” for open and first 30 minutes.8. Narrow watch list of longs and shorts and decide how to trade the toppicks (e.g., COG on 2-min chart gap fill; 5-min high), if at all.9. Put stocks of interest in Minder and set alarms. Use Computer.10. Watch pre-market trades on 20/20 bar trades. May suggest early entry.80
Trading Day PreparationPre-Market FuturesIntra-Day FuturesPre-market Futures’ highs and lows are focal points to Intra-DayFutures and equity traders. Set Alerts at the points. The significanceof these areas will vary. Be aware of these potential reversal “areas.”81
Market Internals Analysis82
Market Internals AnalysisBond YieldsAbove the 20MAFuturesAbove the 20MADo not fightthis trend !Bond Yieldstrending abovethe 20-MAEquity Futurestrending abovethe 20-MATICK IndicatorOscillating above 0TRIN IndicatorBelow the 20MATICK indicatoroscillating above 0TRIN indicatortrending belowthe 20-MA83
HeatmapsETF HeatmapPre-Market HeatmapThe Nasdaq Heatmaps are excellent pre-market tools toview strength and weakness in the NDX-100 and Sectors.Like other indicators, we then go to our price charts.84
Action at Market Open1.Size of gap in market and stock.2.Gap into support or resistance? Mark gap area for future reference.3.First 5-min. bar is your first indication of trend. C O or C O4.Mark the opening day’s Tick and Trin as new reference points if necessary.5.Size of stop (e.g., playing 5-min. high versus 2-min. COG into gap fill).6.Don’t take trades based on 2-min. charts; longer time frames must support.7.Review “Focus List” within first 5 minutes.8.Sort market minder of Universe based on net change above open.9.Then, you can narrow down Focus List into Minders.10. Beware of delayed prints and incorrect Level II information.11. Value your list and be prepared and confident to act thereon.85
NewsUpgradeCTLM5-Min.DailyUpgradeDailyUpgrades andDowngrades aregiven each day.Always considerthe pattern priorto considering aposition.MLNM5-Min.While some will betimely, many willcome after a moveand may be excellentopportunities totrade in the oppositedirection.86
Relative Strength AnalysisRetailBanking20-MASideways20-MAStrong UptrendWhat is showing Relative Strength basedon percent change may not always bewhere the best sector opportunity is.Checking chart patterns may suggestcurrent Relative Strength will be changingin the future based on overbought/oversold levels, support/resistance, etc.87
Relative Strength AnalysisStockRelative Strength and GapsAnalyze the first and second gaps ofthe Stock vs. the Futures. Which isstronger/weaker and why?Gap UnfilledGap UnfilledWhat does the line graph belowsuggest?FuturesGap filled20-MAGap filled88
Considerations When Trading GapsThere are many patterns that form after a gap, however we need a plan to trade them.Things to consider when trading GAP PLAYS:Is the market or sector gapping in the direction of stock?Is the TICK opening at an extreme level or near support / resistance?Same for TRIN?Is the gap in or against the direction of the 20-MA on the 5-Min. chart?Is the stock extended from its 20-period moving average?Is the gap excessive (e.g. 2% vs. 20%)?Did it gap to minor or major support / resistance?Is the direction of the gap confirmed by a pattern? (e.g., novice or professional gap)?How did the intra-day pattern form on the prior dayIF YOU CANNOT FORMULATE A STRATEGY, STAND ASIDE!89
Reversal PeriodsReversal times are a tool that helpyou stay alert to possible change.1:302:55Price confirmation is always theultimate indication of change.11:0010:102:15Every turning point could have beenseen through our other techniques,but reversal times keep us alert.10:3090
Weekly Market Analysis1. Review weekly and monthly charts of broader markets.2. Scan Universe based on weekly, daily and 60-min. charts only.3. Review market internals, and 5- and 10-day MAs of same.4. Review sentiment indicators.5. Determine which sectors/stocks might move per Barron’s articles.6. Browse other trade journals and web sites of interest.7. Update Trading Diary and trades of week.8. Doing your own homework will ensure faster development.9. Relax and Smell the Roses!91
Weekend Market ReviewThe weekend is an excellent time to reviewthe broader markets and equities on a longertime frame to obtain a more significant viewof trends, pivots, support and resistance.92
Useful Web oo.comwww
Pristine Intra-day Trading What is Intra-day Trading? 5 A style that covers a holding period of several minutes to hours. Requires an objective method for making trading decisions.
Intra-day Trading Defined What is Intra-day Trading? 1) A style that covers a holding period of several minutes to hours. 2) Three forms of Intra-day Trading: Scalping Momentum 3) This style of trading has become widely accepted recently. 4) Day Traders use 5- & 15-Min. charts to make entries and exits. 5) Day Trading is best used on active, highly liquid stocks.
Intra-day Trading Defined What is Intra-day Trading? 1) A style that covers a holding period of several minutes to hours. 2) Three forms of Intra-day Trading: Scalping Momentum 3) This style of trading has become widely accepted recently. 4) Day Traders use 5- & 15-Min. charts to make entries and exits. 5) Day Tradi
a day trading margin call to pattern day traders that exceed their day trading buying power. Customers have five business days to deposit funds to meet this day trading margin call. The day trading account is restricted to day trading power of two times maintenance margin excess, beginning on the trading day after the day trading buying power .
Chapter 7: Bollinger Band Bounce Trading Strategy Chapter 8: Fibonacci Trading Strategy Chapter 9: Bladerunner Trading Strategy Chapter 10: Tips for Shortening Your Trading Work Week Conclusion. DAY TRADING STRATEGIES A Guide to Day Trading Strategies, Risk Management, and Trader Psychology
This document will explain how to logon to your Trading Platform. All the Trading Interfaces (the Trading Chart and the 3 different Trade Windows) use a Profile to logon to your data feed and the contract you want to trade. Everything you need to use your Trading Platform is accessed from the Menu at the top of the Trading Chart and Trading .
Trading System, Trading Rules and the Trading Plan 42 Example of Trading Rules 43 Chapter 6: Establishing a Trading Schedule 45 U.S. National Exchanges 45 Regional U.S. Exchanges 46 Canada 46 Europe 46 U.K. 47 Japan 47 Chapter 7: Setting up a Trading Journal 49 The Trading Journal-your best friend 50
Algo trading TOTAL TRADING ALGORITHMIC TRADING HIGH FREQUENCY TRADING . Algorithmic trading: In simple words an algorithmic trading strategy is a step-by-step instruction for trading actions taken by computers (au
The American Petroleum Institute Manual of Petroleum Measurement Standards (API MPMS) Chapter 19 details equations for estimating the average annual evaporation loss from storage tanks. These equations are based on test tank and field tank data and have been revised since initial publication for more accurate estimations. WHAT IS EVAPORATION? Evaporation is when a substance changes from the .
