Whenever I talk about the Amateurs getting wrong footed, I upset people. They email me saying “don’t pick on us poor Amateurs”. What can I say. Looking at average trade size and identifying when the Amateurs are active helps me to trade.
Today we had a great little setup. First the Amateurs had gone Long looking for a trend continuation. They were too late and the Emini broke sharply down. The Amateurs got taken out on their stops and went Short. But the sharp break down didn’t last and the Emini reversed, broke to new Highs and took out Amateur stops again.
This created a RAMBO to RAMBO channel, that was followed by another RAMBO to RAMBO channel. Remember RAMBO stands for potential ‘Reversal of AMateur BreakOut’. The pattern just shows when the move is being led by Amateurs with low average trade size and so is suspect and might be short lived. It’s not a sure thing – what is in trading – but stay sharp when you see the RAMBO pattern.
Enjoy your weekend and watch out for a video on Crude Oil soon.