Tuesday night's potential was a textbook example of Trending Momentum, and what we discussed at the meeting this evening. Before I left home, I placed a stop entry order just above the previous day high, which was a ceiling that had been tested several times (1hr, 4hr charts). Reason for not liking the setup: At the time I felt this was a risky trade because there wasn't 100+ pips from that interim ceiling to the R1 pivot. R1 was also located just above the Bollinger Band Top (1 hr chart). When my stop entry was triggered I would already be deep into a move that started off the CPP (actually earlier at S1), and I wouldn't be at home if price reversed again and headed back down. Reasons for liking the setup: (1) Price had been in consolidation for the better part of two sessions. There was going to be a breakout into a intra day trend at some point, likely a significant one considering the length of the consolidation: That pent up energy sitting on the sidelines was busting at the seams, waiting to explode. (2) I felt the eventual breakout would be to the upside. Reason: Candles on the 4 hr chart had been climbing up the 55ema for a day and half. (3) 55ema and the candles were currently above the CPP. From the 55ema (i.e., trendline floor), I traced up to the most recent high, which was approx. 138.68, for my entry point trigger. I figured that if the current 4 hr candle were to engulf the last several short candles with a full body (momentum), and also given the pent up energy, price would head to at least the R1 ceiling. Not enough, I still needed a 100+pips target ceiling from entry, which was R2. Just to be safe in the event R2 wasn't reached, I placed a stop limit order at the March 2nd high, 139.41. I also placed a 30 pips stop loss order. Trade result: textbook. One clean trade to 139.41 stop limit target propelled by Trending Momentum. Charts and trade summary follow.
Daily price is at top of channel, which is also a double top area. Non-farm payrolls upcoming Friday a.m. Things are getting a bit edgy. Enough. Short session. Charts. Trade summary follows.
The three chart time frames highlight that the market was trendless, range-bound for the Monday overnight session. Moving averages are trend indicators. Notice the essentially flat moving averages on hourly and daily charts. There was a 100+ pips intra day "trend" between the CPP and S1 on Sunday. Lack of "red flag) economic news kept me from trading, and I missed that opportunity.
I prefer trends because the trades are much less stressful. I could have just as easily skipped last night's scalping session. See the daily chart: Overall, we still don't have trend direction. It's catch as catch can, i.e., nipping at scalp trades.
P.S. The classes you asked about are held in Portland, Oregon.
Gentlemen, start your engines. We have a trend! Month of March and trending momentum arrives in the nick of time. Slept through cell phone alerts and later move down overnight. Captured good pips on unexpected momentum this afternoon and evening, alerted by price alerts sent to cell phone.
