Dow Collapse

[Steve Griffiths]

Hi Everybody,

Folowing up on the posts by Durgesh and myself on the beautiful ABC sell on the 15min Dow...........

As you can see below, this ABC sell put you into a short position to take advantage as the Dow collapsed yesterday. On the close the profit on this tarde would have been 16x the initial risk (ignoring slippage and commission). This is a massive profit. But the point is that the ABC sell set-up nailed the prior corrective high perfectlly, therefore allowing you to enter a new short trade with a small controlled risk to take advantage of this sharp decline :)

This is why I like this ABC pattern so much and why I designed and created the MTPredictor software program, to find such great trade set-ups......

Steve

[stevej]

Not on the cash index though (unfortunately):mad:

And the setup did occur on the day before.

SJ

[Steve Griffiths]

Agreed, a pity the same set-up did not unfold on the 15min $INDU, like it did on the 15min YM.

But there was this great TS3 sell on the 3min $INDU on the way down that would have banked a return of approx 6x the initial risk (ignoring slippage and commission), and this was at just the first profit target :)

Steve

[ericd2281]

Steve,

In the previous post, it shows the position being exited with a risk/reward of 6:1, could you provide some 'expert analysis' of some techniques that could be used to stay in the trade longer to potentiall increase this risk/reward ratio?

I had a couple specific questions...

1) Wouldn't the TRIN value of significantly greater than 1 suggest that the drop in the YM will continue and therefore the trade not be exited?

2) Wouldn't the Moving Average help to keep the trader in the position as well?

Thanks,
Eric

[Steve Griffiths]

Hi Eric,

You must have read my mind.......... I am just recording some additional help videos on this very topic :)

Advanced trading startergies like this are also covered Part 2 of the Trading Course.

But, yes, you have it eaxctly, days like Friday, when the $TRIN was indicating a continued move would be the perfect day to look to "run" trades with the 20-peroid moving average (for example).

I was just showing the "minimum" profit using the standard trade management guidilnes. Advanced traders could amend these to increase thier profits.....

Steve

[Steve Griffiths]

Hi Everybody.

As you all know, the 15min Chart got us short to take advantage as the Dow declined sharply on Friday, so the next obvious question is - where should support be anticipated ?

The Chart below shows how the 60min Chart would have helped. See how the decline off the Jan 11 high has unfolded in 3-swings (ABC), but see where the low came in - right at the Typical Wave C WPT:) As such this gave you the best place to look for Friday's decline to end.

As such a minor rally today should have come as no surprise..........

Again, just using the simple 3-swing ABC pattern as found in MTPredictor

Steve

[Steve Griffiths]

Hi Everybody,

As a PS for those of you who like to see "just" the automatic set-ups in either eSignal or TradeSatation. Here you can see how the 15min chart of NQH06.d (Nasdaq day session only) nailled this high perfectly as well :)

Thanks

Steve