RED TO GREENS

       RED TO GREENS ARE ONE OF MY FAV SET UPS. PRIOR TO LEARNING AS MUCH AS I COULD ABOUT THEM I USED TO VIEW THEM AS ONLY TAKING PLACE ON IN PLAY STOCKS AND STOCKS THAT HAD ALREADY HAD THEIR DAY 1, SO IN OTHER WORDS, DAY 2 WOULD COME ALONG AND THE STOCK WOULD HAVE A WEAKER OPEN AND THE MOVE TO GREEN WOULD TAKE PLACE.

       I ALSO BELIEVED THAT THE STOCK WOULD SHOOT GREEN AND THEN FAIL AND IF YOU WERE STILL IN IT YOU WERE DOOMED TO CURSE THAT STOCK FOR THE REST OF YOUR LIFE. NOW I KNOW BETTER. R/G AS WE SHORTHANDERS WRITE IT IS SIMPLY A SET UP. IT DOESN’T HAVE TO OCCUR ON ANY PARTICULAR LOOK BUT IT DOES HELP IF THE STOCK IS IN AN UPREND AS THE PROBABILITY IS MORE IN YOUR FAVOR. WHEN PLANNING FOR A R/G SUPPORT AND RESISTANCE LEVELS ARE KEY AND EVEN MORE IMPORTANT THAN THE SET UP ITSELF. WHAT DO I MEAN BY THAT. IF A STOCK HAS STRONG DAY AND CLOSES NICELY. THE NEXT DAY YOU WOULD WANT CERTAIN LEVELS TO HOLD INTRADAY TO BE ABLE TO HAVE A VALID R/G TRADE. IF THOSE LEVELS BREAK AND YOUR STOCK OPENS UNDER THIS LEVEL NOW THE R/G PROBAILITY IS NOT QUITE AS HIGH. HOWEVER IF THIS AREA YOU DREW HOLDS YOU CAN ALMOST TAKE THE R/G TRADE ON THE FIRST CANDLE. I HOPE I MADE MYSELF CLEAR.

      IF YOU ARE NOT A QUICK EARLY MORNING RISK TAKER THAT IS OK TOO. ANOTHER WAY A R./G MOVE CAN BE TAKEN IS AS FOLLOWS: FIRST OFF THE DAILY LOOKS HOT, THAT IS ALWAYS KEY. SECOND , WHAT YOU WANT IS A STRONG OPEN AND HOLD OF LEVELS. YOU SEE A STRONG EARLY MORNING MOVE BUT THEN THE STOCK PULLS BACK A BIT AT RESISTANCE. YOU KNOW FROM YOUR STUDIES OF PRICE ACTION THAT THE PULLBACK IS WEAK SO YOU ARE WAITING FOR A HIGHER LOW PERHAPS EVEN A SLIGHTLY LOWER LOW BUT AFTER THIS YOU SEE ANOTHER PUSH UP WITH STRENGTH . THIS IS WHERE YOU GET IN. HERE ARE SOME EXAMPLES OF R/G MOVES THAT HAPPENED YESTERDAY. FOR THE PURPOSE OF THIS POST I WILL ONLY SHOW YOU THE INTRADAY CHART. 

       YOU CAN SEE HERE THAT IN ALL THESE CASES YOU HAD THE INITIAL PUSH BUT IF YOU WERENT QUICK ENOUGH OR WERE NOT AROUND AS LONG AS THE DAILY CHART HAD ROOM YOU COULD FEEL CONFIDENT IN TAKING THAT SECOND ENTRY. REMEMBER NOW,IF THIS WAS DAY 3 OR DAY 4 OR ON A SUPER EXTENDED DAILY YOUR BIAS FOR A R/G OR AT LEAST FOR AN ALL DAY TYPE OF MOVE WOULD BE OF LESSER STRENGTH. IN THAT CASE YOU WOULD BE QUICK WITH YOUR R/G MOVE OR YOU WOULD NOT TAKE IT AT ALL AND WAIT FOR THE SHORT AT SOME POINT IF IT WERE GIVEN. SO WHEN WOULD I LOOK FOR A R/G SET UP

1)      DAY TWO OF A MOVE THAT STILL HAS ROOM TO GO ON THE DAILY, RESISTANCE IS NOT TOO NEAR AND INTRADAY LOOK IS NOT TOO EXTENDED

2)      DAILY IN AN UPTREND BUT PULLED BACK, NEARING AREA OF SUPPORT , YOU NOW HAVE A CLEAR AREA OF SUPPORT AND ARE JUST WAITING FOR MAYBE A GAP DOWN TRICKING MANY SHORTS INTO THINKING ITS GOING DOWN BUT THE REALITY OF IT IS THE DAILY BIAS IS FOR A LONG, BUY THE PULLBACK. AND THE SET UP COULD BE A R/G

3)      A STOCK IN A DOWNTREND THAT HAD A STRONG BOUNCE AND INTRDAY IS SET UP FOR A R/G LOOK. DOESN’T MEAN THAT THE TREND HAS REVERSED BUT AT LEAST FOR THAT OPEN YOU MAY SEE A NICE R/G MOVE