Trading in Range & Beyond ๐
Here's Some More Understanding on How I Trade within the Yellow Zone & Beyond It.
SPX YELLOW ZONE
I have set a yellow zone where I find price to be most responsive. I have read a lot of your feedback from the last email and lots of you want to know how I've charted this zone and levels. So, I will break that down this weekend for you guys in the next email.
However, for now lets get into what is important; which is the breakdown of how I have reacted to and traded this zone and will continue to this week.
ABOVE AND BELOW
As long as we are around this zone, I am sticking to a trading mentality of scalping. I am not expecting any huge moves until we get out of this zone. So, what I have been doing this week is trading the moves above or below the yellow zone.
Meaning, when price gets above the yellow zone, I will look for quick scalps to the upside. When price gets below I will look for quick scalps to the downside.ย
This is done for me with confirmation of a candle closing above or below the yellow zone on atleast the 15min time frame.
Now when price is INSIDE the yellow zone, comes rejection/bounce scalps. I will watch price action to see how price reacts to the top of the yellow or the bottom. These are also scalp-able for me. If the candles continue to close and reject the top, I will look for a quick in and out rejection scalp. If the candles continue to bounce and hold the bottom of the yellow zone as support, I will look for a quick in and out bounce scalp.
BREAKOUT
The mentality of quick scalps changes for me and returns back to normal scaling when price breaks out of this zone.
For me, I am watching price above 4526 hold for bulls to take over and give us a stronger move up to the following price targets.ย ย
Or when price gets below a 4466 hold, I expect the bears to take over and begin to give us our gap fill below and the rest of the price targets below.
This is when my mentality changes. So instead of scalping in and out quickly, I will deviate and focus more on scaling off size as price targets hit. Using price targets to lock profits gradually and stop losses as reasons for exit.ย
AKA: the bigger move.