I trade lower highs as reversal signals and in a down trend, higher lows as a reversal signal and in an uptrend. I often trade off hammers and inverted hammers (shooting stars) at the top or bottom of a strong move; it's a high probability trade. I sometimes trade breakouts, buying a new high or selling a new low. I use a 5-min chart and 20-bar EMA with Keltner bands to assist in targeting profit-taking zones and to gauge momentum moves, and finally I use previous S/R levels as initial profit target zones as well.
So how I trade is based on simple price action setups and I trade very little, usually 1-5 trades a day.
My post late yesterday provided a lot of backdrop leading in to what I suddenly perceived as the prelude to a late day surprise move. It suddenly clicked for me as to why these late day moves often take us by surprise. I've seen it happen a lot and yesterday I thought had an insight into why.
So, I'm not sure which part of my previous post constitutes do I "trade like this". Do I trade based on the complex and abstract set of conditions leading into my theory that price would make a violent move up into the close yesterday? Absolutely not. That's why I was afraid to trade it live. I didn't trust it the way I trust a simple lower high in a downtrend.
My post was to see if any long time traders see this kind of setup lead into strong surprise breakout moves late in the day.
There are quite a lot of different trading styles on this thread and it's interesting to see everyone making a profit in very different ways.
