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By The Art of the Chart

If the trend is up and momentum in the range is positive, the second bounce in a range is often a better entry then to wait for the breakout because it can improve r/rw by a factor 2 to 4

5 min chart of a 2 wave correction into the rising sma 20, click to see 1 min momentum change!

I used to buy when a stock moves up and sell when it goes down. It did take me a long time to realise that this might feel nice, but really does hurt profit potential.  Toni Hansen showed me the importance of momentum.  IPG was a strong mover in the morning but came off the highs.  On the 15 min timeframe I saw three bars up, and three bars down, downside momentum slower then upside. Timing is everything and if there is a three bar move I only start looking to buy after it has reacted for at least the same amount of time.  When price is near support, I start looking for a change in momentum (or pace as Toni calls it) on a smaller timeframe, often the 1 min chart. I try to enter as close to support as possible. It really improves r/rw. You might think by entering early that a flush move is more likely, but often the opposite it true. Click on the chart to see the complete marketview I look at.

Many traders would call today a trend day since it started at one end of the range and closed in the other. From the sound of it you would think that you can make a lot of money on these days, yet usually I do worse on those days. Probably because I keep feeling I don’t want to buy the top. 

While today might be considered a trend day, it was hard to trade because it was very choppy. 

I was late becuase of other business then had a hard time finding something I liked until I spottend HUN, right before it started its final move. 

My entry was at 11.90, with a stop at 11.65 and I closed all at 12.50, a nice reward, but more importantly the number resistance area (12.5) and dialy sma 50 resistance. Not much but it was the best I could do today and it was a nice setup.

Please have a look at Online Income too.

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