SPY/QQQ Plan Your Trade: Learning A or B Trading Styles

3 בינו׳

Yesterday, after the GDP Now data hit, I received a number of messages related to my SPY Cycle Patterns and how they work in comparison to big news data (like GDP, JOBS, PMI, & Others).

Let me try to explain one simple thing to all of you.

The SPY Cycle Patterns are based on GANN/Fibonacci Time/Price cycles. They DO NOT correlate or predict price movement based on NEWS EVENTS or other extraneous data.

The SPY Cycle Patterns are, in essence, the core price expectations related to time/price cycles WITHOUT EXTERNAL NEWS EVENTS.

They represent what price is likely to do without any big news, economic data, or critical major event taking place to disrupt the Cycle Pattern.

So, it is important for traders to understand what I call the "A or B" type of trade setup.

Price is always attempting to reach new highs or new lows - ALWAYS.

Failure to reach new highs means price must roll downward and attempt to reach new lows. Failure to reach new lows means price must roll upward and attempt to reach new highs.

It is that simple.

Price is always attempting to break above previous critical highs or lows - ALWAYS.

Thus, once you understand this as a basis of price structure/movement, then you can begin to apply more advanced patterns (Fibonacci Price Theory, Excess Phase Peak Pattern, Others) as an additional layer to price structure in an attempt to understand how price dictates all trending/movement.

Now, one must also understand when price attempts to break levels (high or low), it can REJECT at those level (after breaking to new highs or lows). This is what I call a "Washout" pattern.

Rejection happens when a new low or high is reached, but the price FAILS to continue to trend in that direction. For example, if price were to reach a new higher high, then reject, this would be an example that strong resistance exists at/near the previous high level - causing price to FAIL to maintain that new high price level. Thus, I would expect price to move downward after REJECTING at the new high levels (see above).

The reason I'm trying to teach you these price concepts is because I want you to learn to make better decisions - not learn to just "follow along". You have to learn to understand price and understand how price moves related to opportunities.

That is what trading is all about - anticipating price moves because of what you are able to discover on a price chart.

Get some. Happy Friday.

#trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold