Soultrader

Your welcome

I would say I trade 90% futures, 10% stocks. I don't see why the TRIN breakout would not work for stocks. I suggest testing this out first. I use this strategy for futures only. One similar strategy you can use for equities is TICK range breakouts. I know many stock traders who use this strategy. Anytime you have the TICK stuck in a 2 hour range, watch for new TICK highs or lows. The setup is to go with the TICK breakout.

I will usually wait for a pullback when playing breakouts. Most of my breakouts are done around pivot points and value area. I do have one exception: I have found the TRIN range breakout to be one of the most powerful breakout setups. Find the range of the TRIN during the morning session. If in the afternoon session the TRIN makes a new high or low, this can act as a leading signal for price to breakout. Remember the TRIN and price have a inverse relationship. If TRIN makes new highs, look to short price. If TRN makes new lows, look for a long setup. I find this setup to work particularily well in the late afternoon session.

Thank you fivedeez. I hope you find our forum resourceful. Our members help our community grow so we make sure you have a good experience in our forums

One pattern that I pay attention for is price rejection when prices break out of value. When there is a significant support or resistance point right outside the value area, I will wait to see how prices act around these levels. Take a look at the chart attached. In this example. prices broke out of the value high pivot but hit a critical resistance point at the 11420 mark. This level is a cluster zone from the August 18th high and the R1 pivot. Price was met with heavy selling pressure and declined back into value. This pattern now indicates price rejection above value and there is a high probability that price will trade within or below value for the rest of the day. Why? Market participants view price as unfair above value and are trying to establish balance. Once there is price rejection above value, balance will be created inside or below value. Thus, my trading strategy is to short any attempt back to the value high pivot and buy any attempt to the value low pivot. If prices do break to the downside, I will then use the value low pivot as resistance for a short opportunity.

Key resistance at 11400 level. The overnight session used this as key resistance. This will act as a key pivot for the trading session.

I have read approx 150 books in trading, investing, trading psychology, NLP, etc... I have found 75% of them to be useless. However, if you are able to dig out one useful paragraph or line in a book, I find it well worth my money. Alot of tradings books can be overpriced. I suggest you visit amazon. I bought most of mine second hand. Also like Daniel said, make sure you review each book before you buy them. While some traders find what they are looking for you may not. If you need some recommendations feel free to ask me.

This is a key level that I have been discussing for the last 2 weeks. The markets have failed to maintain price acceptance above 11400. However, the daily charts look fairly bullish. We have an ascending triangle formation in play, and price is trading above all moving averages. We will need to see more volume on this breakout but the MAC alos looks firm to the upside. Any break above the August 18th high and we are likely to see a nice lift perhaps to the May high. We also had price acceptance above value on August 30th, 2006. This will be a very interesting week to see whether we can break this level. Place your votes now!

This is the end result chart post for the day. Notice the overnight support and value high pivot cluster became the dead low for the trading day. This is the reason why I watch for overnight and premarket action to determine any key levels. This is always an edge.

It really depends on your account size and risk tolerance. I am comfortable risking 10 points per trade. For a $10k account that is approx 0.5% risk when trading one contract. I would not risk 2% on a $10k acccount per contract. My rule is to trade one contract per $10,000. So the risk always stays low.

Hi specmav!

Hi everyone Feel free to introduce yourself in this forum. Tell us your favorite markets, years involved in the financial markets, trading platform, pet's name, location, etc.... If you look at my username, you will see a small pull down box called "Trader Specs". If order to have this option available, please fill in your profile under my account => edit profile. We hope you enjoy your stay with us at Traders Laboratory.

Listed below are two charts: one is a 24 hour session chart and the second one is a gap chart. This chart is from the topics mentioned in this thread. http://www.traderslaboratory.com/forums/technical-trading/227-overnight-session-looking-globex-high-low.html#post413 Overnight support in line with any key pivot point can act as high probability trading level. Notice how the overnight support at the value high pivot acted as a key support level during the trading day. Also notice the 8/28 high that acted as a key resistance point. These are what I call pivot point cluster zones in which I mark them as significant.

Posted a series of short videos on this topic over in the trading video forum. Here is the link: http://www.traderslaboratory.com/forums/trading-videos/241-observing-overnight-session-lab.html#post412 The support lined up perfectly with the pivot mentioned in my posts.

This is another example of an overnight key pivot. Notice that the overnight markets has held at the value high pivot. This will act as a key pivot for the trading session.

1. If you trade stocks, premarket action is very important. Watch the overnight low and high carefully. They can act as key support and resistance. 2. If the overnight action remains within range there is not much change in market sentiment. This means that the market is in balance.

Couple of ways to see for market shifts. 1. New TICK low/highs 2. Price and TICK divergence is a good warning signal 3. TRIN range breakout 4. Higher lows then a 61.8% fib retracement 5. Break of trendline These are just some of the things I watch for.

Try learning to read tape. It will help you better on your entries and you can use tighter stops that way. I don't base my entries or exits on candlestick patterns. I use mainly pivots and key support/resistance. This way I can use a limit order near the pivot and use a stop fairly tight stop.

My reply to palefrost: "Hi palefrost I'm glad you found my post useful. I'll tell you a secret. Most new traders will usually discard what I just posted and will continue to look for magical indicators. You are on the right track! First let me begin with answering your questions. Do not buy just because its low. You need to understand where key levels of support is. You also need to understand price acceptance vs price rejection. Picture the financial market as ebay. If there is alot of supply for one product, the sellers will not receive high bids. If there is only 1 or 2 of the same item posted, bidders will race to bid up the price. Simple law of supply and demand. The market is an auction. Price moves in brackets. This bracket can be as narrow as a few points (few cents) or as wide as a 20 - 40 points ($1-3 for example). Once this level is broken, it will travel into a new zone. Picture boxes on top of each other. Once price breaks the ceiling of the first box, it will enter the second box. Once it breaks the ceiling of the second box, it will enter the third box. And so on... You may find price going up and down inside one single box. This is also called consolidation. When prices go from one box to the next.. this is called a trend. Now let me explain price rejection vs price acceptance. Let's say price enters box #4. However price is rejected and pushed back into box #3. This is a good sign that prices will not trade above box #3. This is because sellers believed prices to be too high in box #4 and returned it back to value. In this case value is equivalent to box #3. This is where price is accepted and perceived to be fair between both the buyers and sellers. When either the buyer or seller decides to show more confidence, they will then move price into a box where value or market balance is found. This is the basic concept of the markets. 95% of all traders do not understand this concept. 95% of all traders fail. By understanding market acceptance vs market rejection, there is absolutely no need to use any technical indicators. Take a look at my thread. I posted a good picture of today's action. "Do you mean, watch who else is buying the stock more?" Footprints are always left in the markets by the big boys. This can be seen by simply watching the tape or analyzing volume. Tape reading or time of sales is the hardest skill to learn in trading. It will be beyond the scope of this thread to explain tape reading.... perhaps I will post a trading video on this topic. One important note though: Floor traders and day traders do not move price. Other time frame buyers and sellers move price. This is who you need to be watching for.Other time frame participants can also be referred to as: hedge funds, institutional orders, Soros, Buffet, etc... Basically the big players of the game. They will either come into the market during the morning session or the afternoon session. You hardly find them stepping in during lunch hours. Try studying market profile. This will give you a better idea on what I am talking about. If you have any questions feel free to ask me. Hope this helps."

Reply to my first post made by palefrost from www.thespeculatingmaverick.com. "I'm a newbie to trading so i'm sorry if this is a stupid question but on most sites i do see people referring to the technical indicators and you are the first person to discount them. How exactly should a newbie go about charting the price? Do you mean if its low buy? As simple as that? Do you mean, watch who else is buying the stock more? Do you follow the news in regards to stocks? Wow im so glad your writing here! I realize how much i have to learn. "

This thread was discussed at http://www.thespeculatingmaverick.com. I found it relevant so I decided to post it here. My post: "Ever since the outbreak of electronic trading, technical indicators such as stochastics, RSI, MACD, ADX, etc... have gained popularity among the trading public. There is obviously good money selling indicators and mechanical trading systems and the so called "hype" will never disappear. Books will continue to write about magical indicators and promoters wil continue to sell new indicators. However, relying on indicators is the worst way to trade. As the name states, indicators indicate. In my opinion they are completely useless. Many successful traders do not rely on indicators. Floor traders do not rely on indicators. They do not have the luxury to sit in front of a monitor and base their decision because the RSI has crossed above 20. They rely on order flow. Amatuers love indicators and they will continue to find new indicators that can show them the holy grail in trading. Unfortunately, this is all hype. The number one indicator is PRICE. Price is king. The day I took all my indicators off my charts and traded on price alone was the day I transformed into a profitable trader. Understanding price behavior takes time and work. But the numerous amount of hours trying to find a reliable indicator and tweaking it is equivalent to learning price action. Trading is simple. There is no need to make it more complicated by plotting a hundred indicators on your charts. Trading Wizard, Linda Bradford Raschke, said it best. “I've known hundreds of professional traders throughout my career. I don't want to disappoint you, but I know of only two who were able to make a steady living for themselves with a mechanical system.†Learn to trade price. Indicators will lie to you always. Price will never let you down. Best of trading"

Posted below is an interesting candlestick chart showing a singe print tail below value. The other time frame buyers stepped in as they percieved price to be too low. After a weak morning session, the afternoon rallly was fairly signiciant pushing prices back into value and above the openng price. The bulls have gained a temporary victory. The market excess created by the single print tail around 11310 will be a key support in the future. Also notice the 11400 mark. This has been a key resistance point for the last 2 weeks and looks like it will continue to do so.

Prices use the VAL as resistance and decline for 30 pts.

After breaking the value low pivot, prices fall to the next line of support at the weekly pivot. Also notice the attempt back to the value low pivot. This offers another good short opportunity.

One of my favorite day trading setups involves pivot points using the value low and value high pivot. If prices break the value low pivot, I will short using a stop a few ticks above the VAL. Take a look at the attachment. We had prices break the VAL and retest it as resistance.