Supply and Demand Trading 071608

Forget about any type of financial crisis. Forget about what the price of oil is. Forget what inflation is at or doing. The only thing that matters is what’s portrayed in the charts. For this environment, I’m using the 60-minute chart. The price action on the QLD 60-minute chart has enough volatility, with the least noisy whipsaws , to make it tradeable for me.

Buying higher high candlesticks, allows me to enter into upward momentum, and also after a pullback. I’ve also got a rule, that if the trade isn’t profitable by day’s end, and not stopped out, I sell. I decided to break the rule when I took the QLD stock pick written about. That left me with a gap down. I sold 1/2 at the 5-minute low, and the second 1/2 at the higher of the 5 or 30-minute low. You gotta have a plan.

I then bought the next higher high candlestick, only because of how oversold the market was. Partial sales occur on the way up. I then bought the next higher high candlestick. Most was sold too early, even though I thought 5 bars up were possible.

Don’t pay attention to how far an equity has run in points. Count the candlesticks. Support, resistance, supply, and demand are all you need to know.