It’s been awhile since I went over a losing trade so I thought that my play in MSFT today might help out a few fellow traders. This setup in MSFT today is my bread and butter, I look for the 3-5, or 8 bar swing on the hourly chart to form, then I look for a PBS or PSS to trigger.
Next, I zoom down to the 5 minute chart and look to take the next pull back that triggers into a PBS. I usually SOH (set on Hands) until the next Pristine Buy Setup because this will allow you to tell if there is “really” going to be some follow through on the 60 minute buy that triggers. My problem is that at times I have a hard time waiting for the pull back and I found myself taking a false breakout in MSFT this afternoon after the hourly buy had triggered. There is nothing wrong with taking these but I prefer to wait for the pull back but for some reason I found myself hung out to dry as I entered the failed breakout after a 25 minute consolidation. I got out of the trade promptly because I knew they were going to sell it off hard as they did. The real eye opener on the play that I found at the end of the day was how price dropped down all the way into Major Support even giving another false trigger long and rolling over but then Volume came in. I’m writing this because I need to pay more attention to Volume, If I would have just stayed away until the volume came in I would have stayed out of trouble. I’m not sure if I would have taken the play this late in the day if I were watching, but this is a good lesson on how timing your plays with volume can make your trades much more potent.
