Another Emini day trading example today – combining volume patterns and cycles on tick charts. This was a Long trade that setup at 10:20am around the 776 level.
Emini Day Trading: 233 Tick Chart
On the 233 tick chart (lowest time frame) there was an "End of Trend" warning signal using the Better Sine Wave. This showed a possible reversal of the down trend.
The cycle signal coincided with first a Low Volume bar (yellow) and then a couple of High Volume Churn bars (blue). The Low Volume bar on a tick chart showed the average trade size was small and the Amateurs were hoping for a break to new lows.
The second High Volume Churn bar was also above the average (red line) – showing the trade size was large and Professionals were buying. The combination of "End of Trend" signal, Amateurs selling and Pro's buying made this a high probability Long entry.
Emini Day Trading: 2,097 Tick Chart
On the 2,097 tick chart (highest time frame) there was a cyclical low turning point. I like the combination of an "End of Trend" signal in the lowest time frame and a cyclical turning point in the highest time frame – increasing the odds that this would be a successful low turning point.
The Long trade entered at 776 was only good for 3 points or so, before the down trend resumed. However, it illustrates how you can use cycles with volume patterns on tick charts. In case you missed Wednesday's post on tick charts, you can check it out here: Tick Charts: 5 Great Reasons to Use Tick Charts.
