Technicals & Time Frame - PDF Free Download

Advanced Charting

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Technicals & Time Frame Technical analysis is transferable & scalable. This means that the patterns we teach you may be applied to all markets and all time frames. What you see today on a daily chart may be applied to a 15-minute, a 10-minute, a 5-minute, a 3-minute and a 1- minute chart, but the timing will be faster. What you see today on an intraday chart may be applied to a daily, but the timing will be slower.

Entries & Exits Obviously better entries and exits can help your profitability But, trades that go on for days are more forgiving than those that go on for minutes Thus, the shorter the trading time frame the more critical good entries and exits become

Seasonality Generally the markets are more bullish early in the year. There is almost always a period of bearishness and/or choppiness as things slow down in the spring or summer. If the bearishness is enough it may attract buyers and create another uptrend in the fall or toward the end of the year.

Summer Is Here! And we don t just see this with the weather but also in the charts. Have you noticed, the markets have slowed down and things are getting choppier? This is when you can t rely on a trend to make up for sloppy entries and or exits. Better timing is more critical than ever!

Early Entries & Exits Failed trend Candles Size of candles Engulfing candles Bollinger Bands Bollinger top Bollinger bottom Candles outside the bands

An Uptrend Is When: The stock makes higher highs and higher lows. The failure of a stock to do so signals weakness. How do we use this information? Look for an exit! Evaluate trading in the opposite direction.

Lower High BIIB sold off $10 from bearish engulfing candle.

A Downtrend Is When: The stock makes lower lows and lower highs. The failure of a stock to do so signals strength. How do we use this information? Look for an exit! Evaluate trading in the opposite direction.

SDS retraced $3. Higher Low

Candles In addition to continuation and reversal candle patterns, watch the size of the candle body The bigger the candle the stronger the momentum The smaller the candle the weaker the momentum (that may lead to tradable reversals or retracements)

Slowing Tighten stops as candles begin getting smaller. Use either previous close or previous candle body (engulfing).

Tighten stops as candles begin getting smaller. Use either previous close or previous candle body (engulfing).

Engulfing B.B. Tops & Bottoms Bollinger Band tops & bottoms can provide great reversal signals. Combine that pattern with engulfing candles and you have even more consistency with it. The combination may be used as an early exit and an entry into a quick swing or scalp trade.

BB Bottom Engulfing Candle Bullish & Bearish Reversals Doesn t engulf, but trades below last bullish candle. BB Bottom Engulfing Candle

Bullish trades may be considered if stock is far enough away from m.a. for potential profit. Bollinger Band Bottom Stock trades above last bearish candle.

Bollinger Band Bottom Stock trades above last bearish candle.

BB Top & Engulfing Resistance on daily chart Re-entry on bounce off 10 ema Put entry, if stocks breaks below m.a. and trends lower may use m.a. as stop.

Resistance on daily chart @ 10 ema

Different Time Frames How do you combine different time frames? Do you ever get mixed signals? How do you handle it?

Focus most on the time frame that reflects your current strategy Day Trades Most emphasis on intraday charts (5 min) Use daily charts for major support / resistance Swing Trades (1-5 days) Most emphasis on Magic & 5 min charts Trending Trades ( 5 days or more) Most emphasis on daily charts Use intraday charts to help with exits if daily chart & indicators show weakness (ADX, BB s, MACD, RSI)

Trading Outside Bands Bollinger Bands encompass most of the trading action A stock trading outside the bands sets up a rare early exit opportunity

Long wick at top Price Moves Back Inside Bands

Smaller Candles Bearish Engulfing Price Moves Back Inside Bands

Price moves back inside bands but doesn t trade below previous candle close

Add a 5 ema and use a break of average as exit.

Failed: Bollinger Band Squeeze Play You may know about the Bollinger Band Squeeze Play, but do you know how to profit from a failed one?

Failed BB Breakout No bullish entry if using 5 min. rule. Enter bearish trade on break below BB or on second down candle.

Failed BB breakout How do you know if this is a retracement or a reversal?

What If You Miss A Trade? If you missed the last entry on a trending stock: Move in with a stop pennies below the entry Higher risk of stock retracing quickly But will help with an entry on stocks that aren t pulling back Or, be patient and wait for the next retracement pattern Usually near a moving average Set stops near average

Exiting Losers 1. Place market order to exit when justified by the chart 2. Bracket the exit with an OCO order: 1. Set market stop below current price 2. Set limit price on other side to exit at higher price

Exiting Winners Set stops below moving average that is holding as support or resistance This may be done on an intraday and daily chart, depending on time frame Use trailing stops This may be helpful on an intraday basis if you are not around to watch the stock Raise stops if stock gaps in your favor

Always Use Gaps to Take Profits Exit calls on break below first five min candle.

PART 2

This is not Basic We are going to look beyond basic chart patterns. Look at what some of the institutions use. Will take you to new level of awareness.

The Chart A picture of the market psychology. Tells us what the market is thinking. Pure supply and demand in picture form.

The Chart Charts should be evaluated in multiple time frames. Pure price activity is foremost. Advanced Indicators can potentially enhance probabilities.

The Intraday Pivot

Intraday Pivots Can be used to identify potential intraday support and resistance. Should be used in conjunction with chart patterns. Must take intraday trends into consideration. Must take multiple time frames into consideration.

Pivot Point Formula The basic pivot point formula is: Pivot Point = (High + Low + Close) / 3 High, low and close are the previous day

Support Formulae Support Level Formulae are: S1 = (2*PP) - H S2 = PP - (H - L) S3 = L - 2*(H - PP)

Resistance Formulae Resistance Level Formulae are: R1 = (2*PP) - L R2 = PP + (H - L) R3 = H + 2*(PP -L)

Intro to Elliot Wave

History Developed by Ralph Nelson Elliot during the Great Depression He used his process to call the market low on Wednesday March 13, 1935 Tied human behavior to Fibonacci ratios

Waves Impulse wave In direction of the larger wave Five wave pattern Corrective wave Counter trend move Three wave pattern

Impulse Wave 5 3 4 1 2

Corrective Wave a b c

Rules Rule 1 Wave 2 cannot retrace more than 100% of Wave 1 Rule 2 Wave three cannot be the shortest impulse wave Rule 3 Wave 4 cannot overlap Wave 4

Rules 5 Wave 3 cannot be the shortest 3 4 Wave 4 cannot overlap wave 1 1 2 Wave 2 cannot retrace below wave 1

Intro to the Ichimoku Cloud

Ichimoku Cloud Often used by Forex and Futures Traders Can be used in multiple time frames Consists of: Tenkansen line (faster line) Kijunsen line (slower line) Chikou span line (we will remove this one for now) Support/resistance zone or cloud

Ichimoku Cloud Long Signals Watch for bullish cross of fast and slow line. If the cross is below the cloud it is considered a weak signal. If the cross of the lines is in the cloud it is considered of medium strength. A cross above the cloud it is considered stronger. Watch for price action to break above the cloud.

Ichimoku Cloud Long Signals The price activity must break above the cloud to confirm the entry. The stock remains technically bullish above the cloud.

Ichimoku Cloud Long Exit Signals An early exit occurs when the price activity closes below fast line. A secondary exit occurs on the cross of the fast and slow lines. The final exit occurs if the price activity closes in or below the cloud.

Ichimoku Cloud Short Signals Watch for bearish cross of fast and slow line. If the cross is above the cloud it is considered a weak signal. If the cross of the lines is in the cloud it is considered of medium strength. A cross below the cloud is considered stronger. Watch for price action to break below the cloud to confirm.

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