Day Trading Checklist Sample

  1. Market type – embedded oversold (3 daily closes or more in long term oversold – comfort levels 4H) – this tells you, that the direction is down, play counter trend only during exceptions, in a short window
  2. LEMA configuration – Bearish: 30 min LEMA below 1h LEMA below 2h LEMA – plenty of resistance overhead
  3. Daily fuel limits 1.0991-1.0975 remark: daily fuel limit was reached yesterday, so today may only be a no break extension – upside limits: 1.1096-1.1112
  4. Last root (RSI2 divergence / beyond 30MA / Boogie man): ~1.1086 – remark: new root may be in the making with the current no break extension thrust
  5. Is there a valid SOS (Sign Of Strength) / SOW (Sign Of Weakness) in place – meaning from the last RSI2 divergence; an SOS is only valid if it arrives on the first move (whoop), it has to stay on the same side of the 30MA, the disqualified ones, on Bam and on Boogie take on opposite meaning; if there is a valid SOS, look to cover your short below 15 on RSI2 and go long to the other side of the 30MA or to an RSI2 divergence
  6. Daily energy bands range (from the middle to the MOAT): 1.1155-1.0956
  7. Last line of defense: last support is at 1.1042, 1.1037
  8. Point out the confirmation tail if there is one (a 2-4 candle sequence)
  9. Where would you be wrong about your directional call?

Verdict: counter trend move may be almost here, cover shorts near 1.1037, go long for 2 legs up. Aim for the other side of MR. Maroon at 1.1077

Your confirmation: the red tail

As promised, the SOS / SOW code snippet

 if (Period()==30 && i>0 && RSI2[i-1]<82 && RSI2[i]<82 && RSI2[i+1]>82 && RSI2[i+4]<82 && High[i+2]<iMA(symbol,0,60,0,MODE_SMA,PRICE_CLOSE,i+2) && High[i+1]<iMA(symbol,0,60,0,MODE_SMA,PRICE_CLOSE,i+1) && High[i]<iMA(symbol,0,60,0,MODE_SMA,PRICE_CLOSE,i))      
  {  ObjectCreate("SignofStr"+IntegerToString(i), OBJ_TEXT, 2, Time[i+1], 70);  
      if ((RSI2[i+5]<15 ||  RSI2[i+4]<15 || RSI2[i+3]<15 || RSI2[i+2]<15 || RSI2[i+1]<15) && !(iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,4,i+5))>iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,4,i)) ) )   ObjectSetText("SignofStr"+IntegerToString(i), "SOS", 58, "Arial Black",  clrChartreuse);
       else  ObjectSetText("SignofStr"+IntegerToString(i), "SOW", 58, "Arial Black",  clrMagenta);

So, where were you wrong about the upside? 5 pips below the last line of defense = 1.1032 – this should had been your plan B.

Where did price go to? Daily fuel limit highlighted above.

What was wrong with the trifecta of the three pushes?

The second one did not make a higher high (it had an RSI2 divergence of its own), and whilst the RSI2 peaks went ever higher, the 3rd run up ended up falling short of the 1st.

This was a bear flag, with a Boogie Man: the sign of strength came on the 3rd push and at the border of the neutral zone and bear zone 1, where bears reload. Incidentally the E16 was in the same location, which is a starting point for a wave 5.

Purple Haze just got hit

The daily fuel limits got modified a bit as the day progressed and another consolidation weight appeared slightly lower.