Tuesday, June 12, 2007
Day trading the Woodies CCI
The market do have order, oh yes, it's also random at times....but for the most part it has a rhythm to it. Part of that rhythm can be defined as symmetry, where we have equal measured pullbacks in a trending market. These are the cyan line that show this symmetry. Now, most trader use some array of indicators, pivot points, support/resistance levels, moonbeams, volume and you name it. But for me, after years of doing this noise....that is putting the cart before the horse. When I see symmetry and the price is below the 34ema in this case.....THEN IS WHEN I GO TO MY SECRET SAUCE INDICATORS TO FIND A SETUP!!!!!!
The red line at 833.00 is where symmetry is hiding, so I now go to my secret sauce and look for a setup...SETUP not TRIGGER. Sure enough we have a CCI(50) ZLR with the turbo (9) being above the 100 level. When it broke the 100 line, the bar that was right before that is what I like to call the setup bar. My stoch is also in the overbought zone and would be part of the setup..... The CCI does lead the stoch but only because the stoch is double smoothed and by it's math would be running a little slower. Not that the CCI is a leading indicator, that is pure BSski. So now, I go to the rule book for a trigger......just like the first bar trade, in order to enter this trade the price must take out the low of the setup bar without taking out the high of the setup bar.
WHY!!!!!!!!!...well think about it this way, I have a short setup and therefore would be going short...RIGHT??? So what would price HAVE TO DO in order for me to make money.....GO DOWN!!!!! So the price confirms symmetry....indicators and everything else......if it doesn't go down then what is the other outcome.....PRICE will rise and I don't like that.....do you????
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1 comment:
Dennis,
Nice Setup. I missed that one. I though you used a turbo of (6)?
MarioM
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