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
I am always open to questions, comments, or suggestions on how to improve this blog.

Thursday, January 10, 2013

Thu. 01_10 pt.1

A good example this morning of a trade sequence that doesn't necessarily rely on the 3/10macd.
With a strong momentum gap higher the 15-min 3/10macd will naturally have a bullish reading.  Determining whether the gap up will be supported or faded is more a matter of reading price than it is reading an indicator.
So, in the chart below, I would ignore the 15-minute 3/10macd and just take it at face value that bullish momentum exists and we'll either have follow-through (a break-out higher) or a fade to retrace some of the untested gap price levels.
In either case I would like to see the 5-minute 3/10macd pull back so that at least it's fast line is less than the slow line.  But, as I mentioned, it's more about reading price.  We had a gap up, a pullback, then a failure to recover half of the pullback.  The bearish 5-minute bar closing near the lows of that morning range nicely coincided with the 5-minute 3/10macd turning negative.

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