Chart Folder - June 10, 2003:


30-Minute Breakout…

On a 5-minute chart using candles and the simple moving average line…we wait till exactly 10:00 (not 9:59, not 10:01…but 10 o’clock sharp.). We look backwards in time between the Open, 9:30am EST and 10:00am EST, and we draw a line at the high and low of the first 30-minutes.

Strategy:

  • Set-up – After 10 o’clock we would keep our eye on a breakout of these lines. Perfect scenario would be to let it breakout the first time and then pullback and pull the trigger after the second time through.
  • Aggressive set-up…put 1-1/4, (plus or minus ¼ points.) points above, or below in the case of a short… (Caution when near resistance or support) when this target is hit you would look for a confluence of the Dow, and NASDAQ, TICK, TRIN, and pull the trigger.
  • Trading with the Trend Overall and immediate trend would of course be preferable.
  • The high and low of the first 30-minutes are used for the whole day.
  • Moving Average Use the simple moving average line (Strategy) to your benefit, especially after the first hour.
  • Caution when near a Reversal time zone.

Notes: They say the high and low of the day are attained in the first hour…so any breakout of the high and low of the first 30-minutes after the first hour you would have to use extreme caution. You would look for momentum and move your target higher to pull the trigger…1-1/2 to 2 points. Risk may be more than 2 points to stay in the game.

This strategy is about as mechanical as they come…but you still must remain focused.

First Hour Breakout…

Take the same approach as the 30-Minute breakout.

  • Look to buy the breakout of the first hours high…if mega bullish.
  • Sell the breakout of the first hours low…if mega bearish.
  • Look at a 10-minute chart after the first hour to see if you can use the simple moving average strategy in conjunction with the breakout. See if the line gives you more room regarding support and resistance in comparison to the 5-minute chart. Remember that when above the line its support, and if it’s below, the line its resistance.
  • If it moves fast and far enough use a tight trailing stop after a breakout of the high or low of the day.

Notes: Look at pivots if they are in range…Use them as support and resistance.

Chart from Tuesday June 10th 2003

This chart shows more than just a breakout of the first 30-minute and hours high. You can see the 10 o’clock and 10:30 reverse…Two major breakouts, and the anticipation of turn around Tuesday.

30 minute breakout chart

 

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