How To Use The Five-Minute Chart As A Filter
Today’s piece, while brief, will be a valuable
refresher course for all. There is little doubt that the market is
trading in a very deliberate, almost quiet manner. For us
HVT’ers, the opening hour is where we can
really shine. However, we do not always want to be coming out with guns blazing
just because it is the first hour. The charts below will illustrate how you can
use the 5-minute S&P chart to help you filter out marginal HVT setups.
The 1-minute charts gives you the “All Clear” for a
long entry.Â
1. Trend is up.
2. Price action pulls back to support
3. Stochastic looks as though it is about to cross
back up.
But…. a quick look at the 5-minute chart and I arrive
at a different conclusion.Â
The 5-minute chart is getting “toppy” as evidenced by
the overbought stochastic. At this stage you have to wonder how much more
upside is in the market at this time? History tells me that more times than
not, not much. You are better waiting for the market to reset itself.
And sure enough, that quick look and analysis of the
5-minute chart saved me valuable capital. I cannot bear to make marginal trades
like that in any market. This trade, if you took it, was so avoidable.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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My new trading service, “Dave Floyd’s Trading Room,”
through which I offer live real-time audio commentary, analysis and alerts is
now available. I encourage you to check it out.
Click here for more information.
As always, feel free to send me your comments and
questions.
P.S. I also have a new trading module available which teaches how to trade my HVT
style through bar-by-bar chart simulations.
Click here for information about the module.