This is NOT an exhaustive list and how I’ll use it is situational, but here are some ideas. Breaking a trendline. Holding a new side of VWAP. Break of prior bars. Break of a moving average. Capitulatory exhaustive price move OR exhaustive volume exchange.

Higher highs and higher lows (bullish trend). Change in the tape and level 2 box. Break of resistance level. Stock doesn’t go down on bad news. Relative strength vs market and comparables. And sure many more out there…

ADVANCED APPLICATION: Now, keep in mind, that these aren’t mutually exclusive. Exact opposite. More of these together, the better. That is why it’s so important to be thorough and well-defined in this challenge. If one indicator is good, wouldn’t five of these together be better?

If these occur in conjunction, doesn’t that mean everyone using each of those five variables is on your team? I want to align as many traders as possible on my side of things. I want all timeframes, all tape readers, and indicators to ideally be screaming in favor of my position.

The more timeframes, indicators, and types of traders with you, the greater the imbalance of supply and demand. It is by combining these variables that win rate can be greatly amplified. I only play the best setups when many factors align. You should never need to squint to be able to see the trade.

Post Tags: trading

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