How do you Enter a Run Away Market ?

[gurucandidate]

While runaway markets do not seem to have meaningful retracements in price, because the incessant buying(or selling) keeps corrections shallow, they do have fluctuations in momentum.
Depending on the time scale one choses there are opportunities to get in with manageable risk in the corrections defined by the price and volume oscillator tools.

The more intense the market is the better the short term tools work. One could observe this on Friday in four markets on the macro level. Crude plunging, indices plunging, TY plunging and E7 soaring at various times and the 16 second bar charts with oscillators, OBV and volume showed the ebb and flow of orders perfectly.

Getting onto a runaway after it started is counter intuitive but the trader after making a less then perfect entry is often rewarded by the strong trend.

GC

 

[JSSPMK]

I thought of posting this 60 minute chart of November light crude contract, ImO here is a good point to re-enter.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1627409>

 

[Anekdoten]

Quote from JSSPMK:

I thought of posting this 60 minute chart of November light crude contract, ImO here is a good point to re-enter.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1627409>

J,

Beautiful W formation at the bottom .....

Anek

 

[JSSPMK]

Quote from Anekdoten:

J,

Beautiful W formation at the bottom .....

Anek

Indeed, more evident perhaps on shorter term charts, unless you refer to daily chart's W well earlier on marking a reversal point. I actually have another chart where it also coincided with histogram divergence, pure beauty.

The real Holy Grail is a V shape reversal, just like in a shape of the actual grail, as ImO second V in W serves as a confirmation for us mortals that lack belief

 

[Anekdoten]

Quote from JSSPMK:

Indeed, more evident perhaps on shorter term charts, unless you refer to daily chart's W well earlier on marking a reversal point. I actually have another chart where it also coincided with histogram divergence, pure beauty.

The real Holy Grail is a V shape reversal, just like in a shape of the actual grail, as ImO second V in W serves as a confirmation for us mortals that lack belief

Definitely one of the better patterns.

I usually play it by waiting for a closing bar to take the mid swing point.

Anek

 

[trader07]

Sorry but I don't trade off chart patterns. Are you saying this is a "go long" formation or "go short" formation?

Quote from Anekdoten:

J,

Beautiful W formation at the bottom .....

Anek

 

[thesecrettrader]

Quote from kevinqc:

After Fed's decision many markets are running away without any meaningful Retracements.

Even going to lowest time frames like 1 min & 3 min do not offer the shallow Retracement.

So how do you enter such markets where there is constant threat of a sharp correction. Verticle markets also drop vertically.

Any ideas ?

I enter strong trends with what is called "Hidden Divergence" signals on higher time frame charts...15 minute, 30 minute, or even a 60 minute chart. I use a lower time frame chart to enter the position with better precision when I am seeing the same signal on the higher time frame chart....or what you would call "dual confirmation" entry.

Here is some examples of how to get on board a good trend....

http://www.elitetrader.com/vb/showthread.php?threadid=105408

 

[JSSPMK]

Quote from trader07:

Sorry but I don't trade off chart patterns. Are you saying this is a "go long" formation or "go short" formation?

W=long M=short

 

[Anekdoten]

Quote from JSSPMK:

W=long M=short

To add to what J said....

Both are good patterns but the W at the bottom has a higher probability rate than the M a the top.

Anek

 

[JSSPMK]

And a V marks a strong bounce, where price wasn't even aloud to retrace, which potentially can lead to a reversal, which on longer term chart might be considered continuation.