Monday, April 25, 2011

The importance of getting into the AM trend

The price action on low volume days will not produce many clear signals. Even so, the first hour or two will produce a few trading signals and you should try to get in on them. For example, today gave a first reversal on b5 followed by a 1PB on bar 7. This led to the biggest move of the day. Unfortunately, it stopped out the breakeven stops of any entries below b7, but that is perhaps to be expected for a gapless doji open.

Anyone who hesitated to short b7 could short the b10 BT bar if they wished to. The move quickly trend terminated (TT) into a TTR from b12.

The trend breakout and failure the second time was worth taking at b22 but the price action quickly turned into successive 3t bars. This is a good reason to exit and stop trading since a low volume day is unlikely to produce large moves.

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