Tuesday, May 12, 2009

Trade Pattern: 5 15-min setup

Cannot take credit for this one. Saw it done by Robert Hoffman (powercharting). This pattern is pretty easy to trade, probably one of the easiest.

Five 15-min bars. Lets assume its down move. 2 red 15 min bars, 1 green for distribution, 2 reds to follow. Same the other way around.

Used this pattern on Monday as you can see here. 10:00AM, got in at bottom, saw the 2 greens, got one red, doubled position size on the 4th bar start. Normally I am looking for the 4th bar to not exceed the yellow/red line (previous bar close/max) - however all the way to the blue line is still valid (second bar close). Combine it with the previous posts on the RSI levels and you have 2 ways to confirm a move higher.

While this specific example does not have the standard 2/1/2 type setup it occurs very often - so start watching it in the future and you will see how often it occurs.

Here is the same time frame on 1min so you can see RSI as per first pattern post.

Note: yes those other 2 trades were rubbish I know. Cannot win them all.

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