1. Find out how to Treat Gap Openings
A niche up or gap down open is an emotional move, and it often will reverse course and switch in to “trap open”. Gaps which might be lower than 4 points on the SP Future are likely to get filled in the identical day, especially Tuesday through Thursday. Turns will occur inside 20 to 40 minutes after the open. A trader should be looking out for a reversal as soon as early momentum is lost.
A niche into support /resistance zone is nearly at all times “fade” – with stops not more than 1 point on other side of the support /resistance zone.
(A “fade” is solely entering a position opposite of the direction of the gap. If the market gapped down, a “fade” can be entering
an extended position (buying) in to the selloff.)
2. When the Market Moves Against You, When Do You Exit a Trade?
The way in which I trade, I exit as quickly as possible. There isn’t any sense in waiting around in your “stop-loss” to get triggered when the perceived edge is gone. I prefer to stay accountable for my trades, and if the market doesn’t do as anticipated, I do not wait for my stop to get hit.
When there isn’t a longer a high probability situation, exit and take a re-assessment.
3. When Are The Best Times of the Day to be Trading?
For me, the most effective times of the day for trading are the primary hour and the last 2 hours.
Here’s an old rule of thumb (and this used to work like clockwork within the “old days”, and even though it has diminished a bit, it still
happens):“The Minor Time of Day”-
If the Market opens higher, then there tends to be a pullback throughout the first 20 to 40 minutes. If the pullback is weak, there’ll probably be a continuation of rally into the early afternoon. But, if the pullback is sharp, then
you’ve got likely seen the high for the day and you’ll be wanting to be selling the bounces.“Major Time of Day”-
Across the 2:20pm to 2:40pm timeframe, we’ll often see moves reverse or gather steam in that timeframe.
Those who have been holding positions all day long grow to be a bit “antsy” – they should do something with them before the Market
closes for the day. When people holding losing positions into late into the day see the time until the close is near, that may
cause the market to make some sharp turns within the last 90 minutes. This system gang also likes to get lively that point of day.
4. How Can Anyone Trade a Choppy Market?
I take a variety of scalps in choppy markets. I time entries with Tick extremes, especially when price pops into previous high
areas of congestion, or other intraday support and resistance. Moving averages will not be good during choppy days.(Scalps : small profit, “hit and run” variety of trades)
5. How Do You Measure Pullbacks
In a trend move, I prefer to see shallow pullbacks to a steeply sloped moving average on one in all the three time frames I follow. (more time frames, the higher) Pullbacks to symmetry in a persistent trend are useful when present.
Example: Rally, dip 2.00 points – One other run up, then a dip of two.25 points – A one other push higher, then a dip 1.75 points. Note
continued dips of 1.75-2.25 points repeatedly hold. A pattern has developed, and you should be buying those shallow pullbacks. This works great used together with a steep slope of the 20 ema on the 5 minutes charts, or barely larger picture, the 60 ema on the 5 minute chart.