Price Action Trading

Topics: Technical analysis, Short Pages: 3 (985 words) Published: September 21, 2011
1)   This was a 2nd entry short coming off a larger double top soon after the regular market open this morning.  Notice that you could have taken the first entry off the DT, but because it was so close to the open, it was probably better to wait a few minutes and not get trapped on the wrong side of the early morning move that usually happens right after the 8:30 AM CST opening.  If you took the first entry which was one tick below the arrow, then it was a good trade all the same and it was not wrong to go short there.  By waiting on the 2nd entry we got a 2nd entry short off a double top with a lower higher indicating that buyers were getting weaker and sellers were getting stronger.  This was an easy short and any runners were safe as well and worth as many as 7 points depending on where you exited.  

2)   This was a 2nd entry short following a two-legged pullback to the EMA.  This is our favorite entry and it rarely fails to give us at least a scalper’s profit.  In this case, it was a quick and easy scalp, but any runners were quickly stopped out.  Two-legged pullbacks to the EMA are one of our favorite patterns and they make us more money than any other pattern we trade.  

Notice that there was an immediate reversal off a double bottom, so if you went long again here, this was a great set up.  The entry would be one tick above the bullish bar noted by the red arrow.  This was the entry of the day so far as well, as any runners were easily safe and worth as many as 15 points.  Remember, most double tops and double bottoms will yield a minimum of a scalper’s profit, but often times, they give us much more as this double bottom did.  

3)   This was a breakout pullback long with a great reversal type bar to go long above.  After a bullish leg up that was as strong as the one that just came off the double bottom back near trade #2, you would expect another leg up of similar length.  If you measure the first leg up, you will see that this second leg up, although...
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