Cycle Trading

[Duma]

As I said in my last post, I always lose more more money at the end of a cycle that I like and I am some times a little late getting into a trade. This trade is a perfect example of the latter. I did not get a daily M3 signal until after the market had made a big gap up. What a waste.

So I thought about this a lot and while I wanted to keep my system a pure daily system that needed only be checked on after hours, I couldn't resist to add a 60min element. If I am in my chair at the right time, then I can take advantage of it. If I am traveling or in the desert, then I just have to go by my daily rules.

So on Nov 2nd, TQQQ had had a long run down and had now tagged the lower KC twice. That can be a pretty good sign that the market might be thinking about turning. So if I feel a daily signal is coming if the market goes up soon, I switch to a 60min chart and take the same signal there.

Look at the 60min chart below. It is beautiful. Note that M65 MU peaked out back in the middle of Oct and had been in a 15 day or so run to the bottom. It first passed through DS and into MD (mark down). Don't ever be long in MD. Then on Nov 3rd market started to go up. M65 flattened and M5 xoz. Bingo go long.

Note that the day ended with a wave 2 pb and then did the next day what wave 3's always do, gap up. Note that it gapped again the next day.

One could still trade the 60min chart if you wanted but it really is a waste of time. Note how quickly M65 went from AC to MU and then rolled over. It bottomed on Nov 16 and then start up again. If you look on the daily chart you will see that was w1 and w2 forming. And then the very famous w3 started. Don't ever miss a wave 3, that is so key.

A similar process can be used to exit.