Daily Recap 10-16-2013 – An Excellent Example of a Reversal Trade

Daily Recap: Today was an excellent example for a reversal pattern, and how to trade it. As I mentioned yesterday, when a signal is triggered but not confirmed there is a good chance that we are witnessing a reversal pattern, and there is nothing to do but to close the previous position and open the opposite one, as much as it pains me to sometimes lose trades this way, it is part of the game. Using the system increases the odds of profitable trades and an overall profit but it also means that some of the trades will be losing ones. Trading the reversal as in our case promises to at least to minimize the loss and even may turn it to a gain. In this case the 60 min short position that was opened yesterday but did not confirm was closed today at the open with a loss of 1.11 points but the reversal 60 min long position was also opened and provided eventually  a profit of 0.93 so in total the system came out of this whipsaw movement with a meager loss of just 0.18 points. Interesting enough the odds that a 60 min reversal will be profitable are very very good, which lowers the risk of making such a trade.

In the meantime the negative divergence is piling up (I think it is triple by now), so unless we see some major move upwards to brake it, I think we are due for a correction.

Battle Plan for the 10/17/2013

60 min short under 170.5

120 min short under 169.86

2013-10-16-End of day

* Stop loss lines should be triggered if there is an interval close above them (i.e. 60 min or 120 min ), they are published in the daily blog and updated during trading hours on twitter.

* Take profit lines should be triggered immediately when crossed, they are usually issued during the trading day on twitter.

* Entry signals should be triggered when crossed, but take into account that until there is a confirmation (i.e. close of the interval across the entry signal) , the signal can become a reversal signal.

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Daily Recap 10-15-2013 – Will Republicans Provide Support?

Daily Recap: SPY made a new high this morning just as I speculated last night but then the weakness got the better of it and it started correcting, as usual it coincided with some bad news about the shutdown, this time republicans leaders can’t seem to get the support they need from their own members in order to finish this. Anyway, to make a long story short, if they reach a solution tonight we’ll probably see a gap up in the morning otherwise, continuation down, my money is on the latter but what do I know!

Trade wise the 60 min reversal long position I held was closed today at break even, but as I mentioned during my daily updates, I may have jumped the gun and after some system (and soul) research I arrived to the conclusion that the stop should have been issued at 170.36, will try to remember it for next time.

reversal patternThe 60 min short position was triggered today during the afternoon decline, but was not confirmed (60 min did not close below signal line), so if you did enter the trade see the battle plan below for updated stop values. Remember until a confirmation there is a chance this is a reversal and should be treated that way in case SPY turns around and goes back up. You can see on the left and example of a reversal to the down size.

Battle Plan for the 10/16/2013

60 min short stop over 170.44

60 min long reversal over 170.68

120 min short under 168.87

2013-10-15-End of day

* Stop loss lines should be triggered if there is an interval close above them (i.e. 60 min or 120 min ), they are published in the daily blog and updated during trading hours on twitter.

* Take profit lines should be triggered immediately when crossed, they are usually issued during the trading day on twitter.

* Entry signals should be triggered when crossed, but take into account that until there is a confirmation (i.e. close of the interval across the entry signal) , the signal can become a reversal signal.

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Daily Recap 10-1-2013

Daily Recap: New Quarter opened strongly green today, the bulls came to play and swept the field, stopping a reversal attempt by the bears in the afternoon and closing strong. It remains to be seen if there is indeed a follow through tomorrow, or was this the best shot the bulls had.

Trade wise, we had a triggering of the 60 min long signal in the morning with a confirmation, but the market stayed pretty much around the entry line for the rest of the day. It looks like there is room for another leg up but the 120 min trend line is still a resistance that needs to be broken.

Battle Plan for the 10/2/2013

60 min Stop under 168.7 – should be treated as a take profit stop

120 min long over 169.73

2013-10-1-End of day

* Stop loss lines should be triggered if there is an interval close above them (i.e. 60 min or 120 min ), they are published in the daily blog and updated during trading hours on twitter.

* Take profit lines should be triggered immediately when crossed, they are usually issued during the trading day on twitter.

* Entry signals should be triggered when crossed, but take into account that until there is a confirmation (i.e. close of the interval across the entry signal) , the signal can become a reversal signal.

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