POSITION TRADING - COIL
Duration with price retracing to 38.2%. Duration in this set-up usually lasts 4-6 weeks with prior ADX >30, indicating momentum. Set-up works best on assets with accelerating growth of higher than 10-15%. Position Trading requires a longer holding period (weeks to months) which risks exposure to Black Swan events which are more common in speculative companies.
Set-up:
Price is preferably within 52-week highs
MACD has converged to zero or is very close and a cross-up is imminent
Prior rally has ADX > 30
Consolidation lasts between 4-6 weeks on average
Once the time parameter is complete, volatility should decrease and prices ranges should contract
Volume significantly dry up compared to the start of the correction
Price finds support at the 20 or 50-day EMA
Coils form either a falling wedge, descending or symmetrical triangles, or establish horizontal support and re-sistance which could either result to a trend continuation or reversal. So it’s important to determine the longer term trend and its strength.
Trigger :
RSI Divergence on 15-min chart
Break of counter-trend line
Execution:
Price filter on break of previous day's high with increased volume participation preferably on an impulsive breakout candle (Marubozu).
Management:
Price targets established ATH and Fibonacci Extensions
Duration with price retracing to 38.2%. Duration in this set-up usually lasts 4-6 weeks with prior ADX >30, indicating momentum. Set-up works best on assets with accelerating growth of higher than 10-15%. Position Trading requires a longer holding period (weeks to months) which risks exposure to Black Swan events which are more common in speculative companies.
Set-up:
Price is preferably within 52-week highs
MACD has converged to zero or is very close and a cross-up is imminent
Prior rally has ADX > 30
Consolidation lasts between 4-6 weeks on average
Once the time parameter is complete, volatility should decrease and prices ranges should contract
Volume significantly dry up compared to the start of the correction
Price finds support at the 20 or 50-day EMA
Coils form either a falling wedge, descending or symmetrical triangles, or establish horizontal support and re-sistance which could either result to a trend continuation or reversal. So it’s important to determine the longer term trend and its strength.
Trigger :
RSI Divergence on 15-min chart
Break of counter-trend line
Execution:
Price filter on break of previous day's high with increased volume participation preferably on an impulsive breakout candle (Marubozu).
Management:
Price targets established ATH and Fibonacci Extensions