A Good Day Trade Method

I've always liked the counter trade where the stock opens and then begins dropping and then reverses. For years I played this based on tweezer bottoms, 15-minute BOB's and other indicators - many of which were good, some not so good. But the best way that I have found to play the counter trade is with pivot points.

Here is BGG as an example


At 11 A.M. BGG dropped through the S1 point (green on my display) after bouncing off of it twice before (15-minute charts). As far as I'm concerned it is a high probability point to buy off the 11 A.M. candle just as it transitions to the 11:15 candle and set your stop just below the 11 A.M. candle's low. At 12 A.M. it met resistance at the day's pivot point but based on the thrusting action ahead of this I I decided to keep it and see what happened next. This could also be considered a Return to 4 move which it turned out to be. Once more it went back through the pivot point and finally hit R1. At R1 you got a decisive move down at 14:00 and that would have been a great time to exit this trade. Actually there is no fault in exiting when the stock breaches R1 at 13:15 because the move would be exhausted by that time.

One thing that you might want to do is to examine this chart in the context of the candle's body and the EMA 4. One of the reasons that I use EMA 4 is that it seems to act as an immediate attractor for the stock price. And when the candle's body leaves contact with the EMA 4 either high or low there is almost an immediate attempt by the price to reestablish contact. Now I'm not suggesting that all of the trader's in the stock follow the EMA 4 - they don't but what I am suggesting is that stocks become locally oversold or overbought and the EMA 4 seems to monitor that condition.

The end of the day saw the stock go into an interesting situation - a pivot retest, a crossover, and a tweezer bottom coming off an RSI(2) < 2 all at once. Had this occurred earlier in the day it might have been actionable but I never carry over 15-minute charts from one day to the next.

AV - A Trading Lesson

Some readers wanted to know how I use QuoteTracker in my daily activities so given that a picture is worth a thousand words I present AV on the 15-minute charts.

I filtered AV out the other day on a new, simple minded filter called 12 to 18 and rising which is looking for stocks that fall in the 12 to 18 price range and are rising over time. It was a good trade and when I find a good trade I tend to watch them for several days afterward. As a result AV was in my queue this morning.

It opened gap down and then dropped for another 15 minutes or so. I have QuoteTracker (QT) set up to show the bar in purple when the RSI(2) is less than 2. This is a critical point and generally is followed by a rebound.

Instead of rebounding the stock price fell through Pivot Support Point 1 (green line on QT). At this point I switched to the 4-minute charts in order to catch the turn.


This shows the 2 hours that surrounded the turn - as you can see the price bounced off the S1 several times and at 10:14 printed a green stick.

The green stick signaled the time to buy the stock which I did. It then climbed up to the pivot point. If I were day trading this stock I would have sold it here - instead I wanted to swing trade it so I set my stop at 13.70 (S1) and held the trade through the close.

Going back to the first chart you can see that it rebound off of the pivot point and went back down. Then at 12:15 it printed yet another RSI(2) < 2 signal - and a cross over (light blue bar) on the next candle.

And that is how I use QT - the pivot points are extremely crucial to my trading and the ability to flag the candles when they meet certain conditions enables me to make informed trades.

RATE - Watch It

Notable Calls is out this morning with an article on RATE and as is my custom I always look at a stock's chart on several time frames whenever I read about it on Notable. So I pulled up RATE and what I saw was yet another illustration of my many points and I wanted to share it with you.


In the previous post I spoke about dull days and two moves and RATE proves th epoint with a move down and a move up. Interesting enough the move up was off a BOB (red circle) that included a tweezer bottom (arrow) - I like these kinds no matter where they appear on the chart but the fact that it was a bounce off the pivot point just adds to the excitement.

Watch for BOB, watch for the tweezer and keep an eye on the pivot points.

Needless to say I was out playing golf when all of this activity was taking place - but, who knows - today is another day.

Read Notable Calls every day - if you don't you are just pretending.

Keep An Eye On The General Market

I found DEI on the BOB set-up filter Sunday Night and had I been around on Monday I could have played it.



First there is the BOB at 10:30 and even though the previous two candles don't appear to fit the software is set-up to output a BOB when one is found and that's what it did here.

If that wasn't enough then the candle at 10:15 being the second bounce on S1 would have informed your trade. In other words you could have taken this as an S1 trade because two candles had already tried to pierce S1 and had failed. As it turned out 4 candles attempted and failed - so the candle at 11:00 would have said to you "I'm going up - buy me."

If that failed then the crossover at 11:30 might have given one a clue that this was a good buy.

For an exit - we have the DOJI just before R1 followed by a spinner that touched R1 - that's your clue to take the profit and run.

If that wasn't enough then you could have blindly bought DEI based on QQQQ action. In other words seeing it bouncing along S1 at 10:15 you can be fairly confident that it is going up. Then, a quick glance at your QQQQ chart would convince you that the market is turning.



When you trade - keep your eye on the general market for excellent signals of what to do next. And try not to trade against the market - it seldom works. Of course - sometimes the market continues and your trade collapses - also be ready to read the topping signals.

Pivot Point Crazy

Quote Tracker has 4 different methods of generating pivot points and if you ever want to go absolutely bonkers - select them all.

The 4 methods are "Floor" so called because they were the first. "Woodies" and I haven't a clue who Woody was. Camarilla and this was invented by a bond trader, Nick Stott, back in the '89 and apparently a couple of sites have made a small fortune selling access to a calculator - hopefully a really small fortune ($189 a month - bet me). The last is the Demark pivots and I know of Tom Demark and have read several of his books and he is OK.

If you don't want to spend the 60 bucks a year for Quote Tracker there is an absolutely free calculator here that calculates all of the pivot points plus the fibbi lines.

I'm going to try the Camarilla method for a couple of days - I'll let you know what I think.