How to put momentum strategies in context to achieve high percentage winning trades. Suzanne Bodlovic

Transcription

1 How to put momentum strategies in context to achieve high percentage winning trades Suzanne Bodlovic

2 Tonight I will show you how this workspace will change the way you approach the markets and give you an incredible edge when trading momentum

3 Momentum Indicator Page Confirmation/Non Confirmation Relative Strength

4 Put your momentum strategy in context to add a new dimension to your trading and increase your bottom line!

5 Principles of price behavior A trend has a higher probability of continuation than reversal Momentum precedes price- momentum is the only leading indicator Short term momentum precedes long term momentum Impulse refers to increase in market s momentum and indicates imbalance in supply/demand Trends end in climax Market alternates between range expansion and range contraction

6 Trends begin out of a market equilibrium point (sideways line) and you can never predict how far they will go

7 Breakout of converging trend lines (must have 5 data points)

8 Corrective ABC (power buy) in uptrend leads to strong upside momentum

9 Momentum divergences can end swing and can shift momentum in the opposite direction

10 3 pushes exhaustion pattern- look for 3 pushes in the oscillator

11 Combining continuation patterns with 2 time frames gives you confirmation and minimizes your risk. A power buy into a bull flag

12 See the market in a three dimensional plane for high percentage winning trades

13 New momentum lows on multiple time frames. Put your momentum strategies in context of the overall market structure. Know when you can hold your trades longer

14 Daily structure- breakout of sideways line confirmed across multiple time frames and across the sector. Don t get out too soon! Markets test previous swing highs and lows

15 Relative strength Theory- the strongest get stronger Relative strength is one of the most powerful tools for making money in the markets. The theory is that the stronger the market is, the greater the supply demand imbalance, and the greater the likelihood it will continue to outperform other markets Relative strength should never be considered a primary timing tool, but works best when used in a consistent framework using other market indicators Like all indicators, it is a powerful tool in certain market environments but does not work well in other market conditions Filters- market environment and volume Confirmation/non confirmation and leadership

16 Which is the stronger market?

17 Relative strength

18 Putting relative strength to use when scalping Which market would you buy?

19 Buy the market that pulls back the least.the strongest get stronger. The power of relative strength

20 Consolidation day- Be aware of your time zones and time of day functions If it has been a trend day in the Asian and European sessions, look for consolidation in the U.S. session

21 Trade your continuation patterns Is there confirmation or non confirmation?

22 Confirmation/non confirmation gives you an edge and helps put your pattern in the context of the overall market. You can trade with added confidence when you see your pattern confirmed across multiple markets

23 Is this a range day or a trend day? Is there confirmation/non confirmation? Is this a good day to trade continuation patterns? Where are the markets relative to their 700 am reading?

24 Trend off 700 am reading across the board in multiple markets A momentum lovers dream!

25 Downside momentum confirmed in multiple markets (trend off 700 am reading) Great day for scalping flags in the direction of the trend

26 Strong trend off 700 am reading confirmed across several markets. You are trading your continuation patterns in direction of the trend. Do you see anything in this grid that would indicate caution?

27 Shift in momentum confirmed across all markets. Which market do you want to buy?

28 When momentum shifts you want to buy the RS leader. Which markets had the best reaction off lows?

29 Which market had least bounce?

30 Crude had least bounce and also did not have a HTF momentum play. Do your homework and know which market will give you more play!

31 Putting it all together! Trading daily momentum setups using relative strength, confirmation/non confirmation and trend off 700 am reading across multiple markets to achieve high percentage winning trades Which market has nice daily pattern that can lead to strong momentum? Is there trend of 700 am reading confirmed across ALL markets? (signaling good volume for the day and higher odds of continuation) Which market are you going to trade? Which market is the RS leader? Is there confirmation/non confirmation across all markets? Are you looking for momentum trend day to support your HTF pattern? Or are you on the lookout for a shift in momentum to end swing? (buying a pullback in an uptrend)

32 Buying pullback in strong upside momentum after breakout of converging trend lines. You are looking for high to low day (flush). When you see the momentum shift you must jump on board. How can you be sure the momentum has shifted?

33 Here is your flush your chance to buy in strong trend confirmed across all markets. Do you homework and be on the lookout!

34 In a strong momentum environment such as breakout of converging trend lines- you do not get many chances to hop on board. Know the structure on the higher time frame and be ready!

35 EC breakout of converging trend lines watch for trigger to hop on board

36 Sell divergence (120) lower high drop down to your 5/15 and trade in direction of trend

37 EC breakout of converging trend lines watch for trigger to hop on board

38 Daily buy divergence pattern. How can I capture this potential momentum move with the least amount of risk using relative strength and confirmation/non confirmation?

39 What is the daily structure in other metals? Are they confirming this pattern? Daily buy divergence in gold and silver. Copper has had 2 high to low days in overall upswing. Now all we need is some upside momentum to get this party started

40 Look for confirmation/non confirmation on multiple time frames in multiple markets and wait for your spot. 120 buy divergence in gold and silver- copper higher low

41 Momentum in the markets confirmed. 120 bull flags across board. Drop down to your 5 min grid and watch for a day where there is trend off the 700 am reading and then trade continuation patterns in the direction of the daily buy divergence

42 Importance of confirmation Daily bear flags in all indexes know when the deck is stacked!

43 Drop down to a lower time frame and watch for confirmation and trigger across indexes Lower high across all indexes

44 Daily buy divergence across the board look for your trigger confirmation of shift in momentum

45 Higher low on all 120 time frames be on the lookout for the HTF plays

46 Bunds 3 pushes up. How can we take advantage of this pattern? How can we use relative strength, confirmation/non confirmation and know when there is momentum to kick this pattern?

47 First we must ask ourselves which market is the RS leader. Yield curve - which markets are the relative strength leaders? Bunds 3 pushes will not kick until you see the RS leaders put in lower high

48 Relative strength is an important tool to understanding market relationships. When put into context it will maximize your profits

49 Relative strength when used with confirmation/non confirmation puts your play in context of the overall market and increases your trading profits

50 Using confirmation/non confirmation to identify end of swingbonds higher high, tens and bunds lower high.

51 Once you begin to see the non confirmation across sector be on guard for your HTF pattern to kick. Drop down to your 5 min grid and wait for a day when there trend of 700 am reading across markets and trade your continuation patterns

52 Bunds 3 pushes pattern kicks for big win!

53 Equities which index has been the RS leader?

54 RS leader puts in lower highnon confirmation at top of swing be on the lookout for shift in momentum

55 H & S pattern across all indexes (120) start of new leg down drop down to your LTF (lower time frame) grid and wait for day there is momentum confirmed and trade your continuation patterns in direction of overall trend

56 Start of new leg down Shift in momentum

57 ABC corrective wave in an overall uptrend. Do you notice anything particularly special about this power buy? Also note the momentum off the daily buy divergence

58 IDNR7 at the end of downswing. Be on alert! This setup can lead to good upside momentum. Monitor your 5 min grid of all futures markets to know when you have the green light!

59 New momentum highs confirmed across multiple time frames. Short term momentum precedes long term momentum. Drop down to LTF and trade your 5-15 setups. Go with the flow, this breakout is working and kicking into HTF pattern!

60 Putting momentum strategies in context to achieve high percentage winning trades Put your play in context of the overall market environment using multiple time frames and multiple markets for confirmation/non confirmation. Do your homework and understand the overall market structure. Is there is a strong momentum pattern setting up on the daily chart? Know the RS leaders and laggards Look for confirmation/non confirmation Monitor your 5 min grid to identify if it is high volume momentum day or low volume consolidation day Are you looking for a high to low day? Or a low to high day? Wait for your spot and know when you have the tiger by the tail! Press your bet for maximum profits!

61 How to put momentum strategies in context to achieve high percentage winning trades Thanks for attending! Suzanne Bodlovic