High Probability Trading Strategies

Last Thursday, March 24, the S&P made a daily close above the potential W.1 or A closing low of 1296 (June ES). As my early in the day March 24 blog post described, this is an overlap and indicates the March 16 low is a Wave-C low, potentially the end of an ABC correction although the S&P may continue in a more complex correction.

The short lookbackk OS weekly momentum at the March 16 low suggested the March 16 low would not just be temporary. The weekly momentum has since made a bullish reversal which suggests the net trend will be sideways to up for at least 2-3 weeks.

With price at the 78.6% retracement for the past few days and the daily momentum OB, we should have at least a 3-5 day corrective decline very soon but the S&P is likely to eventually continue to a new high above the Feb. high.

This blog is not meant to be a trade advisory, but to help you to learn how to use the technnical and trading strategies taught in High Probability Trade Strategies.

Markets can and do anything but the idea is to identify conditions with a high probability outcome and acceptable capital exposure.

Comments (0) | Leave a comment or question

One of the best lessons to be learned from High Probability Trade Strategies is how to identify if a market is at a high probability juncture. The S&P has reached such a juncture.

The Feb. 18 high to March 16 low can clearly be counted as either an ABC or 1-2-3. The three day rally to the March 21 high reached the 61.8% retracement and which is very near the low of the potential Wave 2 or B which is typically the maximum a Wave-4 should reach. Daily DTosc (8,5,3,3,) momentum is OB.

What is an important pattern signal taught in the book that would signal the March 17 low is a W.C and the S&P should eventually continue the bull trend to above the Feb. 18 high?

The daily closing low of the potential W.1 or A low is March 1 at 1296. A daily close above 1296 is an “overlap” as described in the book and signals March 17 should be a corrective low. With the S&P near critical price resistance and daily momentum OB, any daily reversal signal or decline below a minor swing low is a sell-setup with minimum capital exposure.

Which ever direction the S&P takes from here, the strategies taught in High Probability Trading Strategies will allow the trader to take advantage.

Comments (0) | Leave a comment or question

In High Probability Trading Strategies, I stress how important it is to have a written trading plan and describe the elements that should be included in any trading plan. A trading plan may include objective “rules” and/or guidelines that must be met before a trade is considered. My suggestion is the first filter to consider a market for a trade should be completely objective.
Read More

Comments (9) | Leave a comment or question

The theme of High Probability Trade Strategies is to learn to identify conditions with a high probability outcome with acceptable capital exposure. It should be the theme of any trading plan whether or not you use the specific strategies taught in my book.

To win in the business of trading just like in any other business, you must have an edge. That edge is specific trade strategies to recognize when a market is in a position to complete a correction or a trend so you can enter a trade in the very early stages of the new trend and sell in the very late stages.

Read More

Comments (4) | Leave a comment or question