Today was a good example of a nice trending market that gave you some low risk, high probability entries. Here are two charts of basically the same market. The first being QLD, ProShares Ultra QQQ ETF, and the second being it's inverse, QID.
Using a 5-min chart we had two entries after the market calmed down. First we had a descending triangle (ascending triangle on QID) that failed right at the opening range low. An orderly throw-back provided a low risk short entry at the 50-EMA. Of course, if you couldn't get the shares to short, QID long would have provided a mirror set-up. The second retracement back to the 50-EMA was deep and choppy, but buying at the moving average with a tight stop loss order just below would have given you a comfortable trade. p.s. WOW....it's only Tuesday and so far we have sold off 2000 points on the DOW in the past two and a half weeks (17%). Over 500 on the Nasdaq (22.5%), and over 250 on the S&P (20%)...in only 12 trading sessions!
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 firstname.lastname@example.org
I am always open to questions, comments, or suggestions on how to improve this blog.