My Basic Relaxation Play

Here’s an example of the type of play I have been making while on semi-vacation. I made two trades today, same setup, same management:

… both in the first hour, and then I spent the rest of the day doing other things.

The charts are sort-of my interpretation of the delicious Patty B. setup. I saw an eotpro.com webinar with her last week or so, and while she was showing her charts, I put this crude facsimile together. I don’t normally imitate people, but Patty is a great trader… she’s buying houses for her servants. Not kidding.

I did make the chart my own… for instance, instead of her 2 MACDs I use one blau MDI histogram. Instead of her two stochastics I use 2 blau SMIs. I put two vRamBar Confirm lines at the bottom of my screen, and did not use the two MA lines she had. Maybe there were some other differences, I don’t remember. I looked over a few weeks of data, and identified a simple setup that seemed to be reliable. They aren’t big-money plays… just smaller in-and-out plays.

So, here’s what I want to see (for longs… reverse everything for shorts):

• 13 MA above 34 MA above 89 MA
• A pullback that doesn’t penetrate the 34 MA, and preferably just brushes the 13 MA
• During the pullback, the GVolume Oscillator isn’t too weak, and preferably doesn’t even go below 20 at all.
• During the pullback, the positive blau TVI doesn’t hardly dip at all, preferably not even crossing the signal line.
• During the pullback, the fast (blue) SMI dips and turns back up, and the slow (purple) SMI does not fall below 50. Preferably, it barely dips at all.
• The slow (bottom) vram bars are green with a confirm dot. Preferably the fast (top) vram bars are also green with a confirm dot.
• A fresh (within the box) patty B signal fires off.

I do look at that MDI histogram, but I don’t have any real rules about it… I like it to be sloping in my favor, and I do prefer if the pullback doesn’t push the MDI into too much negative territory for long plays.

As for money management, I put an inital stop below the nearest plot cycle. Once the low of a candle is 2 ticks above my entry, I trail a stop 1 tick behind the low of each candle. In other words, once I can claim 1 tick, I do, and then I capture 1 push in my direction.

The idea is to find shallow pullbacks on a new trend, and hopping on for the second push. On choppy days, this setup did not appear at all. Today, I got two quick trades off and was done. Check the charts I posted to see that the setup is there. Today’s trades were for 1 pt short and 2 pts long.