The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at toddstrade@gmail.com
I am always open to questions, comments, or suggestions on how to improve this blog.


Friday, August 17, 2012

day after trend

The day following a trend day typically spends a lot of time (if not all day) within the previous day's upper range (typically the top third of the previous day's range).   It is often not a day to expect much from counter-trend moves and also an environment best left for scalping.

Keep in mind: the sub-chart of the TICK has a number of horizontal lines; zero-line being teal colored, + & - 500 = neutral zone green or red dash lines, + & - 800 = general bullish/bearish are solid green or red, and + & - 1000 = extreme bullish/bearish are a green or red horizontal line.
Notice that today's TICK only got down to barely -500 which is very bullish.

Below is a chart of the SPY with TICK, the numbers 1-5 indicating setups one might look for:
1). The first higher low which followed a new TICK low, notice the strength of the green bar which cemented the higher low.
2).  Profit taking at resistance on a negative TICK divergence.  Notice the lower wick on the red bar under the "#2" indicating the profit taking sellers which follow this methodology.
3).  Price tests support on a new TICK low which is faded.
4).  Price re-tests resistance and breaks out,  but on a negative TICK divergence (harami reversal bar).
5).  Price tests support on lower TICK lows (reverse divergence), the strong reversal bar which followed giving a strong follow-through move in the last 15-30 minutes back to the Open price on a new TICK high (wherein profits were taken into the close, as is evident by the long selling wick on the last 5-min bar).


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