This is how I scalp intraday. These
little "stabby" bars that poke out from a downtrend are
good reactionary levels in an uptrend,
and are good for anywhere from usually +15 to +
hundreds if they mean the continuation
of a bigger trend. Always watch out for these,
especially if they coincide with more
historical significance. This is a 1 hr chart.
This is the JPY trade long. At this
point price has the potential to go either way, because the
bigger trend is down. My intraday
target was hit for about +71 pips on the long side. I took
most of it off and in my other account
have a short which is good for about +23 pips so far,
trying to get the most out of the
downside on bigger size. This is how I trade typically in a case like this.
So that's about +90 pips on one pair in
a couple hours. Just to give you an idea of what is
possible. On both of these I got in
with a total of 1 pip drawdown + 1.6 spread on each.
Dont feel like you need a lot of guts
to pull the trigger on a short like this. Take a look at any
chart and you'll see it happen almost
every time. The more you see it the more you'll get
comfortable with it.
Between these and bigger moves you'll
find yourself very busy. No indicators required. Just your eyes.
The Importance of Hourly Closes
Hourly closes hold the most
significance. I stated in an earlier post about AUD that I was
looking for a close below this
resistance turned support to prove continuation. This is another
one you'll see happen over and over
again. I trade them when I feel strongly about them but
generally have uneasiness due to the
lack of proximity on the entry.
Shorting at that close whould have
provided about +20-something pips right now. You can see
the same thing happening but in reverse
on the earlier move into the 0.9650 resistance.
I commonly refer to price in trending
environments as stacking bricks, because you will notice
over and over again that price forms
“blocks” and stacks diagonally, one on top of the other.
Below we have a chart of USD/CAD.
You’ll see that on 3 different occasions during this
uptrend, a level of resistance turned
into a level of support, a bullish sign indicating further
price movement upwards.
In regards to intraday trading, using
this technique and using these levels will provide high
probability setups over and over again
on heavily trending days. When an area finally becomes broken, it is typically a sign that the
uptrend is over and either reversal or consolidation is on the way.
Additionally, you will notice from the
chart that the diagonal trendline was forfeited for the
horizontal support and resistance.
Playing a bounce off of a diagonal trendline would not have
given you nearly as good of an entry as
the horizontal lines, or you would have missed entry
altogether, depending on how you were
to draw the line. It is why we always require horizontal support and resistance be present
before entering any trades.
Intraday Scalping - Example
Overview: This level, 1.4737 holds
historical significance. Please refer to a 1hr chart previous
to the time period below for more
clarity.
Step by step:
Point 1: 15 min chart/1hr bounces off
of the level. Buying opportunity.
Pont 2: Hourly close below the level.
Price pulls back, allowing sellers to get on in. Price drops.
Point 3: Approach to the line again.
Selling opportunity.
Point 4: After an hourly close above
the line, price bounces off of it again. Oil inventories come out, price takes out the level pretty
easily.
Point 5: Level fails, getting weaker;
been used many times in the last 24 hr period.
If you take a look at the chart below
and study these types of movements you'll be quick to
start recognizing these patterns
happening all of the time. I've posted a few of these now,
simply for the reason that this type of
activity is very frequent and reocurring.
The Bottom of the Bucket
Here's a pattern
that happens all the time and is very important for taking advantage
of a lot
of buying and
selling opportunities. You'll notice that when price makes a "U"
formation at a
turning point
there will commonly be a base built within it. Think of it as a cup,
where the
bottom inside the
cup acts as a potential turning point for price. To make the most out
of these
you would want to
scale down to smaller timeframes in order to pinpoint the exact
bottom of
the cup formation.
If the base of
this cup lines up with historical support or resistance all the
better. Many times
you will see the
"stabby" bars in trends get nulled and price will turn at
these bases. It
happened today on
EUR, for instance.
If you take a look
at your charts you're going to find them everywhere. They happen over
and
over again; I look
at them very frequently.
Below are some
recent examples on EUR and GBP.
The levels we look
to play bounces off of are usually very heavily-concentrated upon
areas for
market movers and
they command a lot of attention. When people see that these levels
have
been hit, they
seek to continue the price reaction in the form of a reversal, which
could last for
several hundred
pips if overall market conditions are in alignment.
We turn to chart
below. Here we have the last few days of activity for USD/JPY. On
this chart
alone, we have
several different scenarios which are presented to us, almost all of
which we
have the ability
to make money from. Let’s walk through these motions step-by-step.
Point A: We have a
new level that gets formed. We’re looking for a price reaction the
next time it gets seen.
Point B: Price
exceeds the level by more than a comfortable amount (we’re looking
for it to hit it exactly and
reverse). Additionally, we have an up close on the 1hr bar that is
almost right on top of the level.
We close our new short position with only a couple pips of profit.
Price exceeds the level, and
then uses it as support. We open a long right on the level when we
see this.
Point C: Price
reaches major resistance, so we go short, expecting a sizable move
Point D: Price
uses the high of point B as support and retraces about 25 pips, where
we could
have made some
profits on a long; we know that major resistance is just above us, so
our
expectations are
low for continuation.
Point E: Price
uses the previous support level at point D now as resistance. We go
short.
Point F: We
attempt to go long at the support level created at point B. The level
is taken out,
and we get an
hourly close below it. Price retraces back up to the level, and uses
it as
resistance. We go
short.
Point G: We go
long when price hits a previous support level on the last wave up,
which ends
up coming off of
it hard.
Point H: Our
support level created at point B is hit yet again, but because it
failed the last
time, it is now
weaker. Additionally, the hourly close is very strong, and in the
upper portion of the bar. We take
partial profits on our trade and hold off on any new action.
Point I: News
comes out, and other levels are taken out. Before the news was
released, we
closed the rest of
our long.
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