This month I'm paper trading a couple of simple setups designed to work better in a choppy market. One is fading an extended move to a major support or resistance point and the other is a speculative double top at an important level. It is not the most comfortable way of trading as it feels like you're stepping in front of a bus sometimes, but it seems to have a high win rate. I'm using tape reading to filter out stocks with very high momentum.
Here is an example of the double top setup:
40 is a significant level and the 200 DMA was at 40 on the daily chart. I look for a bearish candlestick in the morning and expect price to get rejected at the same level as long as I don't see too much momentum on the tape. I like to see the tape slow and a mix of red and green (trades being executed at bid and ask).
40 is a significant level and the 200 DMA was at 40 on the daily chart. I look for a bearish candlestick in the morning and expect price to get rejected at the same level as long as I don't see too much momentum on the tape. I like to see the tape slow and a mix of red and green (trades being executed at bid and ask).
No comments:
Post a Comment