Intraday Trading Charts
August 25, 2011
Intraday Chart 1: Strategy #5
This first intraday strategy example started out as a Strategy #8 (Inside Bar Strategy), but price ended up gapping above the inside bar canceling the trade.
However, later in the afternoon after having made a test of it's prior day low, Noble Corp (NE) advanced straight up to its high, backed off resistance and formed sort of a cup and handle pattern. As soon as price approached the break out area, this would be a Strategy #5 set-up, for which a Buy-Stop order could be placed.
That's of course making the assumption that NE was still on your watchlist that day for a Long trade. And it might of been since, NE was relatively strong compared to the rest of the market. It was certainly not the best day to be trading on the long side considering the weakness in the overall market. But NE did make a nice breakout move before retracing it's advance.
Intraday Chart 2: MACD Histogram Strategy
The MACD Histogram Strategy utilizes a default setting MACD histogram and 50 sma. Some are going to feel that the default setting is way too slow for them and that's OK. Just know that you'll get more trade signals (and generate more commissions for your broker) by making the indicator faster. There's always a trade-off. But, that's something you can certainly backtest. A faster setting might get better results on a particular equity or ETF....or it might not. And even if it did, that wouldn't be any guarantee of future results.
Pulte Homes (PHM) was already in an up trend as defined by the 50 sma. So, entries are simply taken off a rising histogram bar. Except for the 1st signal for a long trade, this strategy did pretty well. Depending upon how a trader exits, the 2nd trade could've lasted the rest of the day or a 3rd trade makes a nice add-on or a re-entry trade. Some traders like to add to their position once price advances in their favor, rather than going 'all in' from the start. That has never been my entry strategy, as I prefer to keep things simple.
Intraday Chart 3: Triple Moving Average Crossover Strategy
The Triple Moving Average Crossover Strategysets up trades using a 50 sma to determine trend and the trades are triggered by a cross of the faster, 4 and 10 period simple moving averages.
Soon after Salesforce.com's (CRM) 50 sma turns down, it's 4 sma and 10 sma make a cross triggering a short trade. If the trade was exited, another short was offered by a second cross of the averages just before 2:00 by a second crossing of the averages. What are some exit strategies that can be used to create a whole intraday trading system in combination with this type of entry?
Here's several methods to consider for exiting a short position:
- MA cross
- Bar close above 10 sma
- Price target (multiple of stop?)
- Fibonacci extension level
- Trendline break
- Resistance level breakout
- Bar close above volatility indicator