Old material, but maybe someone will have new thoughts, I do not remember who author. Found in the archives. a couple more to post later.
I think, most of the money, I've done day trading, comes from trade consolidation. This is one of the few professions, where you can accurately predict your growth potential. It basically works in all markets, but it is extremely effective in a strong market. This is most common in stock, which are very strong in the morning.
1. The stock exchange will have a strong rise on morning trading session
2. Stock will be back in the middle of the day
3. After rollback, it will trade sideways in a fairly narrow range over a long period of time
4. Look at the volume from earlier up in comparison with setbacks.
5. The uptrend starts again
6. Determine the middle of the daily range. If the stock moves along the upper edge reveals, it should challenge the high of the day
7. Where to set the position? Once the consolidation range will be installed, you may want to get a small position near the bottom. To the extent that, as it begins to evolve, add its position.
8. Make sales close to the resistance levels since the beginning of the day
9. If acciai easy to move through resistance, it, most likely, this will cause a high level.
10. Install warning to session high and at the top of the consolidation range
11. After the morning trading session take a look at the leading winners for the day. They, most likely, are candidates for consolidation game
How to trade consolidation
The first scenario:
The script includes an action, which departed on 1 the dollar from its high at lunch time. Trading in a ten cent range.
1) Install allert for 1 dollar over the top of the range and 1 the dollar under the bottom of the range
2) If the stock drops below the range of, watch, if he makes a move down. If he quickly moves above the bottom of the consolidation range, you need a lot of time. Attempt to break. Now, when she failed, the action should start moving up.
3) Place the application for entrance as close as possible to the bottom of the range
- If support falls again, then sell your share.
- If prices begin to rise, watch
- If after, the position will be obtained, it is followed by another application at the same price or higher, then the shares will be transferred to the top of the consolidation range
- When the upper part of the range is broken, you have to use a market order to buy
4) If the stock does not grow at all, sell 1 of your 2 lots
5) If the action is back under the upper part of the range, sell the lot, you bought at the bottom of the consolidation range. If it falls slowly, than try to sell it or close offer.
If the alert is triggered, when the stock violates the upper part of the consolidation:
1) If the price moved to the top of the consolidation range, then I put the limit to one dollar above
2) If your order does not fall, see the prints. If the stock prints offer, then you should enter a market order
3. If prices are increasing rapidly and the offers start to rise, promotions, probably, are in the early stages of an uptrend. Now shares can be sold as an uptrend
Where is the profit?
- You trade them as a game of the uptrend (previously taught)
- You are looking for resistance levels from the beginning of the day as extra points for sale
The second scenario:
Scenario two includes stocks, which soared the previous day, but the morning is not a serious uptrend
and. Consolidation in this action, probably, happens early in the day
b. Stock, which gebaut and move sideways in the morning, have a tendency to move higher. Because if the break up has not attracted enough sellers for major failure, then, when a large buyer or purchaser step in the stock will move higher.
with. The best way to find these shares – to watch premarket winners
This is the most difficult method to start your trading career. It's like trading with one hand behind. The study of, how to read the flow of orders, it is important for most, to be profitable traders. Charts are best to use, to complement the reading of the tape for new traders.
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