Emini day trading example today. This was a Long trade that setup at 9:30am around the 750 level. I look for cycle and volume patterns to converge in 3 time frames: 2,097 tick, 699 tick and 233 tick. Here's what the 2,097 and 699 tick charts were showing.
Emini Day Trading: 2,097 tick Chart
At 9:30am we had a cyclical low turning point on the Hilbert Sine Wave. This was the second cyclical turning point after the "End of Trend" warning signal earlier in the day.
I like watching these because they often set up reversal entry points. The logic goes like this. The "End of Trend" signal shows a likely stopping point for the down trend (in this case). The market will then revert to a cyclical pattern – effectively entering congestion. The next up trend, and possible reversal entry point, is often signaled by the next cyclical low turning point – unless the down trend is strong and continues.
Emini Day Trading: 699 tick Chart
In the lower time frame, the 699 tick chart, we had one of my favorite Volume patterns – the "Red, White & Blue" signal. This also coincided with a cyclical low turning point in the Hilbert Sine Wave.
The "Red, White & Blue" name comes from the paintbar coloring I use on the Better Volume indicator. The volume pattern sequence goes like this:
- Volume Climax down bar (white) shows extreme selling
- High Volume Churn bar (blue) shows new buyers entering the market
- Volume Climax up bar (red) shows aggressive buying and the start of an up move
So we had a high probability Emini day trading setup to go long around 750. Although the Emini eventually reached 777, I was out after taking my 4 points of profit (and off to bed as I live in Sydney, Australia).
Notice of Price Increase: The price of the Better Sine Wave indicator is going up at the end of the month. The indicator package has recently been upgraded and now includes built-in alerts, 9 high definition video tutorials lasting 54 minutes and a 55-page trading tutorial to accompany the videos.