Showing posts with label Day Trading. Show all posts
Showing posts with label Day Trading. Show all posts

Saturday, September 14, 2024

Price Action Patterns & Entries at High and Low of the Day | Cameron Benson

Our focus is on price action trading at key levels: daily high and low, and the previous day's extremes. We examine how price reaches these levels — through Stair-Stepping or Ramping — and its subsequent behavior. The price action patterns include M's, W's, Double Tops/Bottoms, and Pin Hammers at daily highs and lows. 
 
 Stair-Stepping and M Patterns: These indicate potential reversals at daily highs or lows, 
with detailed entries and exits often managed through lower time frames.

Ramping is characterized by parabolic price movements and often leads to swift reversals. Observing tight candle patterns with minimal overlap helps identify strong trends and potential breakouts. We also look for specific patterns like Stair-Stepping and Three Pushes, with Peak Formations signaling possible reversals.
 
 Ramping Behavior: Recognized by tight, parabolic moves followed by rapid reversals. 
The ramp into extremes usually signals significant price shifts.


The following 5 minute charts of the NASDAQ are from last week (September  9-13, 2024). They show Entry and Exit Strategies, using Pin Hammers and Engulfments for Entries, and managing stops based on price action, with adjustments for larger, more volatile bars.

Monday, September  9 (Day 1 of 3 Day Cycle):
 
 Identified an M pattern at the high of the day with a pin hammer and engulfment, suggesting a strong short entry.

Tuesday, September  10 (Day 2):

 
Despite a promising setup, a large entry bar resulted in a stop-out. 
Emphasis on avoiding large entry bars and managing risk.
 
Wednesday, September 11 (Day 3/1): 
 
 Similar to previous days with M patterns and engulfments, also highlighting entry points and risk management.

Thursday (Day 2) and Friday (Day 3), September 12-13:
 
 Charts show patterns like descending triangles and W formations, 
with a focus on understanding price behavior relative to session timings.
 
Successful short-term trading relies on recognizing and acting upon the above presented price action patterns, managing entries and exits based on contextual behavior, and adapting strategies according to the specific market conditions within the 3 Day Cycle.
 
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Thursday, September 5, 2024

On Range Expansion, Monkey Hammers, FAFO & NFP Weeks | Stacey Burke

» When you get a range expansion, the market is sending you a very loud, clear signal 
that the market is getting ready to move in the direction of that expansion. «     
 —  Paul Tudor Jones 
  
» FAFO [F*** Around and Find Out] is when you try and scalp the high or scalp the low - or jump in because a market is moving - because something is up high or down low. If other time frame traders are driving the move ... be careful - that's called FAFO and is not a specific 90/10 easy money making trading setup. That's called gambling.

If the train has left the station ... find your next best candidate for your session that was on your watchlist. How is price behaving in the timing window - at the levels? No 90/10 easy money best playbook trading setup that you can see that is from your rinse and repeat templates? Then shut it down and walk away - or do what the experts do and hunt for science projects.

Behaviour of the trader - mindset of the trader - best 90/10 easy money playbook trading setup - timings - levels - behaviour of price - execution skills of the trader - behaviour of the trader after the trade is completed. Rin$e and repeat means exactly that ... same setups over and over and over again . «     — Stacey Burke

 
» It's a Non-Farm Payrolls week - don't be surprised to see a four-day template. The day count doesn't change. Wednesday was the reset day, and now we are in the backside of the week. We might get a monkey hammer on Thursday, and Friday setting up a Non-Farm Payrolls bounce trade. «     — Stacey Burke
 
 

Fed Chair Powell's promise to lower rates may trigger market reversals (HERE & HERE & HERE).

See also:
Stacey Burke (September 3, 2024) - Trading Beginning of Month & after Long Holiday Weekend. (video)
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Sunday, July 14, 2024

Trading Major News Events | D'onte Goodridge

News events typically inject momentum into the market, often prompting traders to anticipate where price might trend in response to the news. Making educated predictions about these movements is a common strategy rooted in technical analysis. Position yourself AFTER major news releases (NFP, CPI, PPI, PMI, FOMC etc.) with either a Pump & Dump or a Dump & Pump trading setup.


Sell Scenario/Setup: Wait for the buy side liquidity pool on the 15 minute timeframe to be raided first. After that, go to the 1 minute timeframe entry above the killzone's opening price. Then, anticipate that price will revert back down to a sell side liquidity level.
 
 
Buy Scenario/Setup: Wait for the sell side liquidity pool on the 15 minute timeframe to be raided first. After that, go to the 1 minute timeframe entry below the killzone's opening price. Then, anticipate that price will revert back up to a buy side liquidity level.
 
When price moves above the opening price of a killzone, it's in a premium. This is where to find ideal sell entries. 


When price moves below the opening price of a killzone, it's in a discount. This is where to find ideal buy entries.

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Friday, July 12, 2024

ICT Macros & Quarterly Theory | Michael J. Huddleston & Daye

Algorithmic macros are timed directives for market maker price algorithms to seek and take out liquidity levels and imbalances in the market. Hence looking at a chart the first task is always to identify imbalances/inefficiencies, buy-side and sell-side liquidity levels. Look at previous day's highs and lows, session highs and lows, highs and lows in the last three days and the previous week. 
 
 
There are 8 macros during the trading day:
 
          #1  London Pre-Open Macro      02:33 - 03:00 EST/EDT
#2 London Open Macro               04:03 - 04:30
#3 New York AM Macro                 08:50 - 09:10
#4 London Close Macro               09:50 - 10:10
#5 London Fix Macro                    10:50 - 11:10
#6 New York AM Close Macro    11:50 - 12:10
#7 New York Lunch Macro          13:10 - 13:40
#8 New York PM Close Macro    15:15 - 15:45
 
ICT Killzones and Macros in the US Dollar Index 5 minute chart.
 
ICT Killzones and Macros in the S&P 500 E-mini Futures 5 minute chart.

Macros focus mainly on the first 20, 30, or 40 minutes of a trading hour (22.5 Minute Cycle). 
 
► There are no ICT macros during the Asian Session.  
► The macro between 9:50 and 10:10 is a time window where the market maker algorithm starts running for liquidity (look for ICT Silver Bullet setup).
► The period between 10:50 and 11:10 marks the end of the 3rd hour of the New York AM Session, and the first 90 minutes of floor trading (90 Minute Cycle). 
► The transition from the AM session to the lunch period leads either to consolidation, reversal or continuation (6 Hour AMDX/XAMD Cycle).
 
Divison of the trading day according to the Quarterly Theory:
6 Hour Sessions, 90 Minute Quarters & 22.5 Minute Micro Cycles/Quarters (EST/EDT).
 
6 Hour Sessions & 90 Minute Quarters in the S&P 500 E-mini Futures 15 minute chart.
 
90 minute Cycles & 22.5 Minute Micro Quarters in the S&P 500 E-mini Futures 1 minute chart.
 
Based on market structure and price action prior and during a macro, three categories can be classified:
 
(1.) Manipulation Macros sweep both buy-side and sell-side liquidity levels.
(2.) Expansion Macros sweep liquidity only on the buy-side OR the sell-side (trending price).
(3.) Accumulation Macros are characterized by ranging prices. 
 
Swing highs and lows of macro intervals can act as support and resistance.
 
Reference:
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Thursday, July 11, 2024

Common Intra-Day Stock Market Patterns & Setups | Cory Mitchell

The US stock market has certain patterns, based on the time of day. These patterns, or tendencies, happen often enough for professional day traders to base their trading around them. One tendency is that the stock market can become less volatile, flatten out, and see less volume in and around the New York Lunch Hour. Many day traders stop trading about half an hour to an hour before this slowdown kicks in and don't trade again until well after the lunch hour, when volatility and volume pick up again.  

9:30 (EST/EDT) : The stock market opens, and there is an initial push in one direction.
 

9:45 : The initial push often sees a significant reversal or pullback. This is often just a short-term shift, and then the original trending direction re-asserts itself.

 Six Intraday Templates and Trading Setups for the S&P, Nasdaq and Dow Jones.

10:00 : If the trend that began at 9:30 is still in play, it will often be challenged around this time. This tends to be another time where there is a significant reversal or pullback

True Open, 6 Hour Cycle, 90 Minute Cycle, and 22.5 Minute Cycle.

11:15 – 11:30 : The market is heading into the lunch hour, and London is getting ready to close. This is when volatility will typically die out for a couple hours, but often the daily high or low will be tested around this time. European traders usually close out positions or accumulate a position before they finish for the day. Whether the highs or lows are tested or not, the market tends to "drift" for the next hour or more. 
 
11:45 – 13:30 : This is lunch time in New York, plus a bit of a time buffer. Usually, this is the quietest time of the day, and often, day traders like to avoid it.


13:30 – 14:00 : If the lunch hour was calm, then expect a breakout of the range established during lunch hour. Often, the market will try to move in the direction it was trading in before the lunch hour doldrums set in. 
 
14:00 – 14:45 : The close is getting closer, and many traders are trading with the trend, thinking it will continue into the close. That may happen, but expect some sharp reversals around this time, because on the flip side, many traders are quicker to take profits or move their trailing stops closer to the current price.


15:00 and 15:30 : These are big "shakeout" points, in that they will force many traders out of their positions. If a reversal of the prior trend occurs around this time, then the price is likely to move very strongly in the opposite direction. Even if the prior trend does sustain itself through these periods, expect some quick and sizable counter-trend moves. 
 
 Time must be divided into quarters for a proper interpretation of market cycles.

As a day trader, it is best to be nimble and not get tied to one position or one direction. It can be very hard to hold a trade for very long between 3 p.m. and the close. The last hour of trading is the second most volatile hour of the trading day. Many day traders only trade the first hour and last hour of the trading day.

15:58 – 16:00 : The market closes at 16:00. After that, liquidity dries up in nearly all stocks and ETFs, except for the very active ones. It's common to close all positions a minute or more before the closing bell, unless you have orders placed to close your position on a closing auction or "cross."


Big News Events can throw a wrench in these tendencies, resulting in big trends, reversals, or movement through the lunch hour or other times that would be uncommon without some sort of external catalyst. 

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Monday, June 17, 2024

The Market Makers Method | Jones Zondo

Price is a reflection of the number of transactions and the price paid for these transactions. A large number of transactions are required in order to shift price. The Forex market is said to trade about $4,000,000,000,000 [four trillion dollars] on average daily. The bulk of transactions are executed by large “Warren Buffet” institutions, and not by laptop traders such as ourselves.

 » A typical pattern of behavior particularly when analyzing the Three-Day Cycle is to be able
to identify a peak high followed by three moves down and a reversal which will form a peak low. «

Market Maker ability to dominate the market is overwhelming. It costs roughly 10,000 Lots to move the market by 1 pip, with this in mind Market Makers have the ability to move the price at will and retail traders can’t. For a retail trader to truly succeed in Forex, you need to at least have a concept of this Mammoth process so that you will understand what is happening and why. Rather you adapt to trade with them instead of against them once we are done with the secrets. Once you realize that price is moved as a result of intention, logic decision and the idea that price is a product of emotional feeling (sentiments) of various traders is misguiding “BS”. Failure to realize this, your trade career will be emotion driven leaving you to react to every trade.

 
See also:
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Sunday, June 16, 2024

The Complete 3 Day Cycle Short-Term Trading System | Cameron Benson

 
[...] Back in the 1950s George Douglass Taylor was a pit trader and he is the original author of the 3-Day Cycle. He watched the people trading larger capital and started to notice a rhythmic 1, 2, 3 to the markets. He used these rhythmic studies to develop the 3-Day Cycle Short-Term Trading System.
  1. A Buy Day (Day 1) occurs after 1-5 Days of decline, when a market that has opened, made its low in the morning, and closed in the upper third of the days range.
  2. Then follows the Sell Day (Day 2) which in fact (contrary to what its name suggests) rallies higher above Day 1 and one could already cover long positions on that day. However, if the 'Sell Day' has a strong close, a directional follow through could occur the next day (Day 3/1).
  3. The Sell Short Day (Day 3) could come immediately following the Buy Day (Day 1), if price action presents in the opposite direction. However, after Day 1 the market could also move higher for 2-3 days before printing new highs in the morning, and close in the lower third of the days range. If you ever notice a market breaking out for 4, 5, 6, 7, 8 days in one direction, it's probably because it is breaking out of a larger structural pattern. [...] 
 » Once you see it, you can't unsee it. «

 
» The largest Aha moment I ever had when I started trading the 3 Day Cycle strategy was that the above three things can be traded completely different. It is massively important to your understanding of this style of trading:

(1.) 3 Day Setups using signal days (previous day's high and low, inside day, first green/red day).
(2.) Weekly Template.
(3.) 3 Day Cycle.
 
All three can also be mashed together into one big trading strategy that will present setups for parabolic trend trades, short squeeze, long squeeze, and some other setups that can help you get into the trade. « - Cameron Benson, 2023 

 
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