One of the aspects we discuss in the tank each time the classic MATD sequence (Morning After Trend Day ... or in this morning's case, After Trend Night) plays out, is not falling into the trap of what I refer to as "sucker pullbacks" on the smaller timeframes as the "air" (see Monday's post) between price and true support begins to disappear.Today's open as noted in the attached 1-minute charts (click to enlarge) provided a textbook example where such pullbacks and brief pauses should typically be waited out in terms of covering final short positions or establishing fresh long trades. Note the three-line break insert (lower left) provided continuing confirmation of the immediate short trend despite the pauses, as the larger timeframes caught their breath.
Such visuals provide for a powerful combination which provides the continuing confidence to effectively trade MATDs and their brothers.
In today's case, the attached trade execution chart -- which I share daily with the Jellies in the tank -- shows how I took advantage of the ideal setup. Note the chart reflects auto-plotting of my actual trades directly from Trading Technologies' order platform. Triangles pointing right open the sequences, dashes reflect interim transactions (both position adds and covers; most of the higher dashes are adds), and triangles pointing left close the sequences. Red colors reflect short sequences, while blue (not pictured) reflect long sequences.As for the Random Walk Theory??
I'll provide you with a few million reasons why it's as bogus as a 3-Dollar Bill.
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