Over time I learned this...

When the market opens down or up so much it is safe to sit on the sidelines beause you will generally get an E signal on your charts. OR test this...This morning when the makret opened up 161 points down there was little doubt for us that the trade this morning would be up. So I looked for a stock that was in the green because it would go higher. Today that stock was GPRO. (+600.00 on the trade)

OR TEST THIS

Trade TSLA UP based ONLY on the fact that the market was pulling up even though it opened way down and that generally on shorter charts they close their gaps more quickly UNLESS the stock is news specific!

TSLA had the E signals BUT TSLA also had a gap. When you trade for a shorter time frame AND when the market opens up so high or low (anything beyond 60 points) you simply must wait if you are trying to trade something with a gap on shorter charts in the direction of the market.

Your E signal will be there telling you it is a trade but it is what I call a head fake because the market had moved so much right at the open.

Remember the 5 and 20 moving averages are fast moving averages thus they will show a move up or down more quickly. At times like this with the market moves down so much you have to take into consideration the overall market movement. It only stands to reason that you would have an E signal on almost all your charts.

This is similar to GWs SLAM trade but the candle is generally not outside the Bollinger band.



Edited 1 time(s). Last edit at 10/08/2014 09:52AM by Darcy2.

Quote
Darcy2
When the market opens down or up so much it is safe to sit on the sidelines beause you will generally get an E signal on your charts. OR test this...This morning when the makret opened up 161 points down there was little doubt for us that the trade this morning would be up. So I looked for a stock that was in the green because it would go higher. Today that stock was GPRO.

GMCR did the same thing this morning.