Based on your experience, what is the best pattern, indicator, etc. to identify tops on 5 min chart intraday? I like moving ave. crossovers but my exits usually far from the top. What did you guys find that works good?
The "best" indicator is a thorough study of historical intrady charts. For your target market, you take several years of intraday data and mark the daily high and low. Enter the data to Excel and do your analysis. As you do this, you MAY find something that will tell you how to anticipate a daily high and/or low If you want to use a traditional indicator, you may want to characterize the market by its average true range. To do this divide the day into parts and (again) look to see what your target market has done over an extended time frame. If for instance by mid-day your market has already moved to its full average range, there is a chance that it is done for the day. Good luck. Steve
(1) From a timing perspective, you should want daily tops to occur during the first or last hour of the trading session. A lunchtime-top is usually a very good intra-day short-sale. (2) From a volatility perspective, when a market extends its range to its "sigma", that's usually a good intra-day "fade trade". If the market keeps trending, expect a reversal at the next "sigma". Do what you can with that.
Don't try to pick tops and bottoms! The odds are against you. Wait for a confirmed trend and trade with it, or stay out. There is the alternative of being always in the market, and to reverse every time when the market gives a direction change signal, but even in this case the purpose is to be well positioned to catch the bigger trends and make money from them.
Only thing that works consistently are cycle ID and timing methods. Everything you have mentioned is a coin toss like. But you already know that.
So what if the odds are against you... the reward:risk ratio is with you... If played well, expectancy can be high... Read Trader Vic's stuff...