Monday, January 30, 2012
1.Market gaps down to LOPD, If LOPD holds market may try to close the gap. Fails to go above the first doji bar and drifts down.Forms a minor DB goes up and tests the HOD.
2.This can also be considered as a bear flag formation after a gap down.The second attempt to go up also fails. Here one can safely short with a very small risk.
3.Market breaks down and pull backs to test the breakout point. A two legged pull back gets rejected rapidly.A shorting area. But very difficult to enter as rejection was very fast.
4.Market breaks down and forms a bottom. Second attempt of the low gives a counter trend BOF trade.This move goes above the range resistance and fails. A scratch trade long.
5.A very good opportunity to short with the trend reversing the earlier long trade.
Note: Trades are on 3 minute charts. I trade the naked charts. I find even the grid lines as distraction .
Lesson: Trade with the trend. When the bias is down sell the highs. TST and BOF of range highs and retracement highs