Can someone please give me an example of what Linda Raschke means by a power buy/sell setup? I've scowered the internet and her website looking for a definition/example and have come up blank. It looks like a simple a.b.c. correction after an impulse high, but my intuition is telling me its someting a little more advanced than that. Any info would be appreciated...thanks.
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linda raschke's power buy/sell setup
- Thread starter krupkinm
- Start date
This is a bull or bear flag on a higher time with the lower time frame forming a so-called ABC correction. You would want to see a good impluse before the bull or bear flag. These set ups obviously aren't as common as plain ole' regular bull/bear flags.
So, if you see a bull/bear flag on a daily chart, drop down to a 60 minute or 30 min chart and see if that flag is really an ABC formation. If it is, then you've got a power buy/sell set up.
The reason this pattern can sometimes lead to a bigger win is because the a-b-c formation tricks people into thinking it's a trend reversal but it's really a trend continuation pattern on the higher timeframe. So, people get trapped and have to bail which obviously just adds fuel to the fire.
-eLindy
So, if you see a bull/bear flag on a daily chart, drop down to a 60 minute or 30 min chart and see if that flag is really an ABC formation. If it is, then you've got a power buy/sell set up.
The reason this pattern can sometimes lead to a bigger win is because the a-b-c formation tricks people into thinking it's a trend reversal but it's really a trend continuation pattern on the higher timeframe. So, people get trapped and have to bail which obviously just adds fuel to the fire.
-eLindy
I'm not sure I understand the first part of the question but if you're asking about a trigger for entry I would have to say it's the same trigger as you would use for a regular bull/bear flag - you just need to wait until you see the 2nd leg of the ABC formation starting to build.
I personally am not that good at timing retracement trades so I tend to scale in and get an average price. I also look for reversal patterns on an even lower timeframe combined with a bit of "tape reading" to see where price is stalling out to try to time the entry. A divergence of some kind on a lower time frame or other chart formation that gives you a risk point is all you really need (once that 2nd leg of the ABC formation starts to build and flesh out the flag on the higher timeframe).
As for pictures - I'll see what I can do about those....good power buy/sell patterns don't happen that often - especially these days where early breakouts seem to be the name of the game.
-eLindy
I personally am not that good at timing retracement trades so I tend to scale in and get an average price. I also look for reversal patterns on an even lower timeframe combined with a bit of "tape reading" to see where price is stalling out to try to time the entry. A divergence of some kind on a lower time frame or other chart formation that gives you a risk point is all you really need (once that 2nd leg of the ABC formation starts to build and flesh out the flag on the higher timeframe).
As for pictures - I'll see what I can do about those....good power buy/sell patterns don't happen that often - especially these days where early breakouts seem to be the name of the game.
-eLindy
Not posted In that chart example is the 60 min chart. On June 28th, there was a quasi-buy divergence forming on the oscillator I use that could have been used as an entry (in theory - I did not make the trade). If you're playing a weekly bull flag, the risk on a 60 min divergence pattern relative to the reward on the weekly pattern would have been a good one.
I hope this helps a bit more.
-eLindy
I hope this helps a bit more.
-eLindy