PATIENCE WITH SLOW PA 12/13/12

BOT TRADING SYSTEM

RULES or not, slow moving PA will try your patience.  Today, we saw a day market that acted like after hours.  It took an hour to hit the pre open high (which was also Y-SB), another hour to run the range where PA traded in a narrow range around the SB for another hour. Finally, PA moved to the BO 5 (you guessed it) which took another hour.  You get the picture.

Trade holding for an hour is uncomfortable and not what most traders are in a habit of doing.  To improve our entries, in any market actually, what do we look for in PA to gain an additional advantage beyond the ranges and rules?  Today it was the trend, reversals, and consolidating break outs.

The bigger picture:  selling in a bear channel running the range and hitting the BO 5

THE WHAT: ATTRACTIVE PA for entries

Group 1, these bars are at a key level.   Some hit, then next bars break but stall at the same level and we have a doji followed by a bear bar.  This is a lower risk short.  This is not necessarily a bar entry but is a valid price entry with a tight stop loss.

Group 2 is PA consolidation.  We have a gap (the area from bars to the EMA) which illustrates the strength of the bull or bear.  Again note where bars are stopping at resistance below the EMA.  Sell any price near the tops with a small stop or use the EMA.

here we have price support at a prior key level and price is rising on a TL (visual or draw).  We had mentioned in the chat that a long at the support was desirable, or at the area just above the EMA .  News hit and B37 provided a +3 move  then reversed to remove all stops.  Great:  allowed both of our entry points  for the run higher.

GAPS:  gaps, the area between a level and a  bar, will often reveal micro resistance/support.  Support and resistance (like the trend) is your friend.  Five plays, again playing a price area.