I wanted to show you how I’ve been selecting trades the last few weeks. It’s a multi-step process. The paintbars alert me to possible entries on my lowest level charts. Then, if I like what I see, I go from the top down and make sure all my higher-level charts agree. Then, I go to the L1 bid/ask and watch the tape to get into the trade.
Here’s a screenshot of my entire charts screen, with notes on all the various types of charts I use…. it helps put the video below into context (it’s showing the same trade that the video describes).
There’s a 6-month daily PnF chart, which is mainly for the trend. There’s two intraday PnF charts… a high-level one and a low-level one. The high-level one always shows two days of action. The low level one just shows whatever is comfortable to view (about 30 bars looks good to me at that size). The lowest-level chart is the 3-minute candlestick chart. It has a ton of indicators loaded, but most are hidden because they are only there to support paintbars. I like to make the paintbars do all the work, if I can, and stare at this chart as little as possible. I only show 2 hours of action on that 3-minute chart, because I don’t want to fall into the habit of trading entirely off the time candles. I want to force myself to use the higher-level PnF charts for higher-level information.
As you can see… I can only look at one stock at a time with this setup, so I try to keep my watchlist pretty small. I cycle through them and try to remember which ones look ripe to set up soon. I visit those more often, and do a full cycle through the charts maybe only once an hour or so. There is a little room over on the right side of the screen to put charts of stocks I want to track closely, but I rarely do that.
Here’s a video where I talk about how I use the lowest level, time-based chart to spot a trade. Refer to the screenshot above for how all the charts fit together. It takes a long time to explain in my ridiculous rambling style, but doing the actual checking takes only a split second. That’s a good thing, because you have to be FAST in these markets!
