Trading Price 5: When/Where to Sell/Short

Question 1

Price Patterns for when to Sell/Short

Answer 1

1. Rally Base Drop (RBD) 2. Drop Base Drop (DBD) 3. Prior Demand becomes Supply

Question 2

Rally Base Drop (Downtrend)

Answer 2

Creates the Supply Zone to Short

Question 3

What to think ahead in RBR, DBD, DBR, RBD

Answer 3

When See a Rally or a Drop, expect a base When see base, expect Rally or drop

Question 4

What are you looking for in Base?

Answer 4

A momentum slow down. smaller range than rally/drop, but size really doesn’t matter. smaller the better though.

Question 5

what time frame do you look for Supply/Demand zones

Answer 5

Intermediate time frame

Question 6

how to find RBD supply zone

Question 7

questions to ask self before short

Answer 7

1. what is the higher timeframe trend 2. in intermediate timeframe, you only want to ID origin of strong drop in price, or strong rally in price.

Question 8

what is main reason why people get stopped out?

Answer 8

They are trading against the dominant trend

Question 9

Line placement of Rally Base Drop

Answer 9

Proximal Line - low of BODY of base, not Low of wick.

Question 10

what is pattern

Answer 10

RBD

Question 11

what is DBD

Question 12

how to find DBD

Question 13

What do you want to see in the 2nd drop of DBD pattern?

Answer 13

• want to see the second Drop’s candles CLOSE around 20% of it’s range especially on first candle of 2nd Drop -shows strength in selling pressure

Question 14

how to draw line in DBD

Question 15

What pattern is this?

Answer 15

DBD

Question 16

What 2 patterns are in this?

Answer 16

RBD followed by a DBD

Question 17

why not short in the middle supply zones?

Answer 17

Because they are not in high 70% zones. low probability

Question 18

what is Prior demand becomes Supply

Answer 18

Will see in nice downtrends -see the DBD in pattern

Question 19

level on top of a level

Answer 19

is when there are multiple zones on top of each other. ex: RBD on DBD creating a 2 zones on top of each other move stop to top of highest level or make zone wider. when wider zones, can use #2 entry using smaller timeframe to maximize profits

Question 20

how to find Prior Demand becomes supply zones

Answer 20

use DBD at end to draw lines

Question 21

Line placement of Prior Demand becoming supply

Question 22

what pattern is this?

Answer 22

Prior demand to Supply

Question 23

Why not want to get in when it first reaches Supply zone after break in zone?

Answer 23

Because it didn’t have a strong sell pressure once it broke through. want to see strong sell pressure to show us evidence of supply zone.