Trading Plan (Trend trading)
A popular trading expression is "the trend is your friend."
I will be using this week Nikkei 225 as an example to illustrate how you can use hourly chart to guide your intra-day trade plan.
Trade plan: If the higher time-frame is moving in an uptrend, for intra-day trading, you simply need to be looking out for buying opportunities. This does not mean that all your trades will be winners. A strategy wins most and has a minimal trade draw-downs should be consider a good strategy.
Hourly PPTA trend analysis from Monday(17 Oct) to Friday(21 Oct) is ==> Sideway to Bullish mode.
On Monday (17 Oct), hourly PPTA indicate market is still in side-way mode (pink inside purple).
What about lower time-frame where we use it to time our entries and exits?
17th Oct 2016 (Mon)
Lower time-frame is still in bullish mode.
PPTA ==> Bullish mode;
Plan ==> PPTA, COP5 as entries, PAPLines as exits.
On Tuesday, lower time-frame PPTA is trading from side-way to bullish mode, but hourly PPTA already indicate bullish mode. Plan ==> PPTA, COP5 as entries, PAPLines as exits.
On the 3rd trading, both hourly & lower time-frame PPTA are still in bullish mode. Trading plan remain unchanged. Plan ==> PPTA, COP5 as entries, PAPLines as exits.
On the 4th trading day, Nikkei turn into a super bull (an unusual day). Both hourly & lower time-frame PPTA are in bullish mode.
Plan ==> PPTA, COP5 as entries, PAPLines as exits. Price break intra-day highest resistance level and staying above to close. It has also traded to a critical Fibonacci resistance level.
On the last trading day of the week, hourly and lower time-frame PPTA are still in bullish mode.
Price traded sideway (COP5) for awhile before it plunge down to intra-day support (PAPLine-S3) and formed a supporting signal "Hammer".
Plan ==> PPTA, COP5 as entries, PAPLines as exits; Support PAPLines as entry & exit.
Beside having a entry & exit plan, risk management is also an important area that traders need to work on.
Our upcoming 2 days Index Futures Trading course (Nov 2016) is open for registration, click on the link below to register:
Essentials of Professional Futures Trading with TA