X Marks the Spot

Nice simple one today.  I went for 10 points, as I doubled my investment this time, and chose the no demand in the 5 minute chart, labelled X, below.  It was perfect because I made my money in 4 seconds, so no stress or waiting.  This is why it's important to me that I pick the right time to enter the market.  If you look at the bar at Point A you will see it has a very wide spread, and the volume is very high (meaning supply).  Also, it is approaching and fails to penetrate the resistance level above.  The bar following it is a narrow spread bar with reasonable volume (not low), and that also fails to penetrate the resistance line above.  The narrow spread and average volume means that the professional money are capping the market - selling into the buying.  There is clearly reluctance to go above that level.  The next three bars are down, confirming this, then at Point X we see what we are waiting for - no demand - up-bar, volume less than the previous two bars.  There is little demand for higher prices, hence the next bar is down, which is where I took my profit.

Easy Day

See the 5 minute chart of the Dow Jones below.  Point A signifies a test in a rising market - classic down-bar, narrow spread, closing in the middle, volume less than the previous two bars.  I went long at this point and, as the title to this blog suggests, it was not particularly stressful!  The market responded nice and quickly to this test and I took 25 points profit.  I exited the trade at this point for a few reasons - 1. 20 points is my target, 2. the bar was approaching a former level of resistance, 3. the half hour bar was about to finish, and the volume on that bar was extremely high (due to the News action at 3pm), which could have meant I would have watched my profit diminish which, as I write, is exactly what has happened - the half hour bar appears (at this moment) to be turning into a top reversal and a possible indication of weakness.

Nice Test

The chart below is a 10 minute chart of the Dow Jones.  Notice at Point A we see a classic test - a down-bar, closing near the high, and the volume is low (it is not less than the previous two bars, which is what we would ideally like to see, but the fact that it is quite low and the bar has dipped down only to close near the high is a good indicator of strength).  Also, this test appears just after we've seen weakness on the previous bar.  Point A is testing the supply on the previous bar.  It has discovered there are no sellers, so it is a successful test and the market rises.  I took my 20 points profit, thank you very much.  Off for a bath and an evening out.

Beautiful Set-up

Today we can see a beautiful set-up to go long, which I took, and made my 20 points profit.  This is the perfect set-up for a long trade, and something we see time and time again.  Below is a 30 minute chart of the Dow Jones.  The set-up was also visible in the 10 and 20 minute timeframes.  At Point A we see an ultra-high volume down-bar - possibility of buying, which is confirmed by the next bar being an up-bar.  Then at Point B the market comes back down into the area of high volume at Point A, but the volume is low (less than the previous two bars), meaning that supply has dried up.  The market has only one way to go - and that is up, which you can see!

I intend to stay in my trades longer when I see set-ups like this in the larger timeframes.  It is a matter of confidence.  I'll get there.

17 Points Profit Today

What a beautiful day for some nice clear signals, although the market has been whipsawing.  Below you will see a 30 minute chart of the Dow Jones and below that a 10 minute chart, but most timeframes were showing weakness at the time, which is ideal.  We want all (or most) of the timeframes to be telling the same story.

On the 30 minute chart at Point A we see a top reversal - our first sign of weakness, but not something that would entice me to enter the market.  We want to see confirmation of this weakness, and this we see at Point B - no demand.   I went short at this point only to watch my profits increase at first, then to be at a loss!  The market rises to Point C, but it rises on even less volume than at Point B.  Plus we have a resistance level around that area.  On a very low timeframe I watched a bar shoot through that resistance level at high speed.  I'm sure that professional money know that many people trade at these levels and often go long when they see the price penetrate upwards, or short when they see it penetrate downwards, thus tricking them, and only to then drive the price the opposite way, which we then see on the bar after Point C.

On the 10 minute chart we see some lovely clear signals.  At Point A we see our upthrust (lovely sign of weakness) and at Point B confirmation by way of a no demand.

I took 17 points profit.

Tricky Monday

Today was what I call a 'typical Monday'.  It's April fools' day, so that may have been some warning, but frequently on a Monday I see this type of action, and have often thought it's because professional money are testing the market.  But that's just my reasoning and I could be wrong.  Monday sometimes has a sideways movement, with conflicting signals, so it can be very tricky to trade, and I've often thought I'm going to keep away from the markets on Mondays because of this.  Today I kept well out of it, although I was looking for trades, but my sister-in-law was here so I probably wasn't focusing properly either.

Below is a 10 minute chart of the Dow Jones.  At Point A we see a giant shakeout (or so it looks).  At this point I'm looking for confirmation that this sign of strength is going to work out, in either a test back down into the lower area of that bar - looking for a low volume down-bar closing middle or high to tell me supply has dried up.  And you could say we see this at Point D, but the volume is a little too high, and at this point I'm feeling unsure.  After the bullish shakeout at Point A we then get what looks like an upthrust at Point B, so a little reluctant to go long, then at Point C, in hindsight it's no demand, but we have all that strength in the background - high volume on a down-bar at Point A, so I did not act on Point C to go short.  But, sod's law, it shoots down.  It reacts to the 'shakeout' at Point D and goes up but hits no demand at Point E and more or less goes sideways after that.

So, to myself, a tricky day to trade and pleased I sat on my hands and kept out of it to face another day.  I'm working away for two days this week so will be back Thursday to take a look (after my social engagements that day!)

11 Points Profit Today

Today was a classic example of where fear can paralyse.  However I did eventually go long in the market, having watched it go up a fair way already.  I took 11 points, but happy with that.  Below is a 10 minute chart of the Dow Jones.  At Point A we see a shakeout - a lovely sign of strength.  I would normally go long on a shakeout but this was at the market open so I was cautious - only to watch the market ascend.  Point B is (in hindsight) no supply, but I'm never confident with these bars that have wide spreads down, closing on the low.  I would have preferred a narrow bar, closing on the low, with low volume.  At Point C I saw a test in a rising market, and a clear sign of strength.  This was also visible in the 5 minute chart (which I have posted below the 10 minute chart) at Point A.  I went long at this point and took 11 points profit as I saw the price approaching a resistance level (marked Point D on the 10 minute chart).  At the time of writing the market has since gone sideways for a long time, and at this point (6pm) has just penetrated that resistance level.  So for my own confidence (and time!) I was right to exit at this point.