Congratulations on your discipline. You are either trying to pick a top in the face of a fairly strong one-sided market or are trying to scalp using a reversion to mean strategy. At best. I will go over two potentially viable strategies to trade counter-trend. However, the very best strategy is to simply trade with a trend when one is identified, perhaps by waiting for a small correction for entry. Strong markets do not make it easy, or possible, for you to get great entries. Remember, this is this internet, on a social media website no less, so take the following strategy guide written by a snaggle toothed truck driver who collects refundable cans and bottles for extra cash, with the help of his assistant(Possibly a make believe assistant, but I’m working on it) with a truckload of salt. First up is a scalping reversion to mean strategy. It is based on one minute charts and looks for price spikes once other conditions are met. This setup, when correctly applied, has a 80% win rate with a 1:1 reward to risk ratio. “When correctly applied”. Remember these words. There are maybe 3 or so setups per day with this strategy. During regular US trading hours, there are 390 one minute bars, so the odds of a random bar meeting the criteria for this setup are about 1%. Let’s see if we can improve our odds. We are looking for a in-trend expansion bar, thus we can eliminate the opposite bars from consideration. Further, because of the tendency for strong price moves in the first two hours and the last hour, those time periods are best removed from consideration for most attempting to try this strategy. This leaves 3 1/2 hours of “Prime time” for this strategy, or 210, 1 minute bars. About half of these bars with be opposite from what we are looking for, so they are eliminated from consideration outright, leaving 105 or so bars. We are not interested in narrow or medium range bars, so that eliminates at least 2/3rds of those bars, Now we are left with 35 candidate bars. Still too many. What to do? Let’s tighten the criteria of the wider range bars. Sure, we can and should look for even wider one minute,in-trend bars, but there is another variable. It is a subjective variable that considers activity in the DOM and tape reading. So a particularly wide one minute bar combined with a flurry of activity puts this setup on the radar. What is the trigger? Ideally, you want to be able to identify evidence there are large, refreshing orders on the bid or offer opposite of the current trend, combined with a slight slow down from earlier frenzied tick action. Can you make a series of subjective interpretations in 1/10th of a second or less increments? Anyway, once tick action just begins to subside at near the extreme of the bar, enter a order, perhaps providing liquidity, counter to the day’s trend. Your target is the full retracement of the bar, your price stop is the length of the wide range bar, and your time stop is two minutes, win lose, or draw. If you are experienced with this trading strategy, have consistently achieved a 80% or so win rate, and there are specifically compelling reasons that holding on one more minute might be profitable, it might be ok to allow one extra minute on that time stop in that particular case. As a reminder, success with this trading strategy requires absolute and perfectly consistent discipline to avoid getting run-over badly when the trade setup fails. Next up is a longer term reversion to mean strategy. While there are proprietary elements to this strategy and contextual considerations, I’m happy to suggest several of its largest elements. These major elements are deviation from the mean and time of deviation from the mean. The mean can be a long term moving average, say a moving average that represents a weekly average of prices, and a deviation measured, perhaps, in ATRs of a shorter time frame. As prices rarely immediately reverse, as in a “V” reversal, a appropriate time delay before this setup becomes active is recommended. Perhaps using a shorter term moving average in relation to a given number of ATRs could provide a useful visual timing reference. The target is the mean (Long term moving average), the stops are momentum and time based, with the trade closed, win, lose, or draw within two, maybe three days. Since this trade is usually held overnight, I use defined risk strategies involving options. Being able to read level II helps with more precise timing, of course. Hopefully, I have provided you some food for thought, Buy1Sell2, and encourage you to go back and analyze, in depth, yesterday’s price action while comparing your entries and the scalping strategy above. Now stop frittering away ETs inheritance, as we have great expectations!
Senate Adopts Blueprint for Stimulus as Harris Breaks Tie February 5, 2021, 9:05 PM GMT+10:30 Updated on February 5, 2021, 9:26 PM GMT+10:30 Vice President Harris casts tie-breaking vote with GOP opposed Democrats face down amendments on taxes, immigration, abortion The Senate voted 51-50, after Vice President Kamala Harris broke her first tie, to adopt a budget blueprint for President Joe Biden’s $1.9 trillion virus relief package -- following nearly 15 hours of wading through amendments from both parties. The House had already adopted its budget resolution but will likely have to vote again Friday to agree on the Senate’s language. Once that’s done, Democrats will be able to craft a relief bill in the coming weeks that can pass without any Republican votes under special budget rules — though the White House, moderates like Democratic Senator Joe Manchin of West Virginia and others still say they want a bipartisan final product.
After last week's unfortunate accident of stock markets dropping while M1 money supply contracted, we are pleased to report M1 money supply has again expanded by $150B in the last week to a new record high. In other news: Stock markets have rallied strongly to a new record high. https://t.co/Wk0wjvKkmi
Head and Shoulders pattern occurring on swing time frame. I look for lower pricings soon. So far, we haven't lost much with these "probe" shorts. I will continue and expect to have an extended gain soon.