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Trading the Tape - Reading the TELL *PIC*
Posted By: Asher
Date: Thursday, 8 May 2008, at 8:04 a.m.
BS"D
Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
******************************PIVOT MAGIC JOURNAL - EXCERPT
Good morning,
Nice long ride on Wednesday, with a second chance entry for those missing the first opportunity.
Thursday proposes to be a day full of swings and frustration, so be just a bit strict about following
the letter of the law, PMT rules.Be well,
=] ;-)>
******************************BS"D
Pivot Magic Trading
First rule:
"Any time you don't know what is happening, get out!"
******************************E-mini
Wednesday May 07, 2008[SNIP]
4 = Volume has resumed (pink arrow), as the tape displays a reversal off the Pivot. This signal proves nicely, pulling us in.
A = Slight breakaway gap, and DVS Volume drives a large red candle through the Mid. Per our PMT stop rules, move profit locking stop above the Mid.
And the position is promptly profitable. Nice!Seems that this dip was an early/pre-emptive breakout. Someone gave away the plan. PMT Tape Readers call that a TELL. After a brief flurry, the
BBs seem to lose interest and return to drink another martini.B = Failed test of MA, for an opportunity to move our stop just a bit tighter, above the MA.
C = Another failed test of MA. Again, move the stop above the MA, securing just a little more profit.
D = Small breakaway gap and a large red candle to the S1. Rules say to move the profit-locking stop above the high of the candle, but my personal
habit is to move it into the gap.E = Giant DVS (pink arrow) drives a giant red candle for a 2-candle 123 of the S1. This is a second chance entry for those on the sidelines, and a most
inviting opportunity for the rest of us to add contracts.The position is, of course, now in violation of the Pivot Magic Trading Maximum Profit Giveback rules, so place a mental stop at Giveback level.
F = Twin Towers (pink arrow) warns of an imminent stall/sag. The long lower wick likewise is a "skidding to a stop" symptom. Per our stop rules, move
profit-locking stop above the high of the candle, and prepare to exit.Another skidding, red, inverted (Bull) Dragonfly. Although it feels small, the candle is in fact overall more than 2 points in size. PMT stop rules permit
us to move the profit-locking stop securely above the high of the candle.G = Another skidding bottom wick on this large red candle. Move the profit-locking stop above the high of the candle. Momentum is surely gone now!
H = DVS (pink arrow) and a large red candle crosses the Low, misleading us into thinking the stall is now resolved. This further entices us to move the
profit-locking stop above the Low.At least we weren't suckered into a trap, as the BBs reverse to retest Support-turned-Resistance at the Low. We were, however, taken out at our stop
before the plunge resumed. +/- 13 points[SNIP]
PERSPECTIVE
(Daily, bottom chart)
Wednesday's Price Action recouped all of Tuesday's gains, falling just short of a retest of the Historical S/R (green line).
Surely, even should the Bulls rally and once again assault the next higher S/R level (dashed green line), on Thursday we
will get at least a tap on that level. More likely a tap and a breather, setting up a wild ride, full of traps, for Friday.So, what's new?!?
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>Wednesday's PMT Chart:
If you want to print this message, you might have better results, and waste less paper if you print this printer friendly page.
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