Todd Keeps on Teaching

Todd’s video updates are always worth watching; there’s a ton of valuable information in the course materials, but observing while he puts the techniques into practice helps to build the confidence and patience that are necessary to turn knowledge into profits. The video for September 26 went beyond the 3-minute charts that are TradingConcepts’ bread and butter, as Todd took a look at the daily time frame, and even mentioned some leveraged ETFs that he uses to take advantage of these bigger market moves.

In that spirit, I thought that it might make sense to take a look at the daily SPX chart, which shows a pretty well defined (and, alas, sideways) range of roughly 1100 to 1230. Now, 130 S&P points are worth capturing, but at present, it appears to me that the market is reasonably close to the middle, suggesting that shorter time frames are probably optimal now.

Given my sense of the fundamentals, I’m more comfortable being short than long at present, so I’m not inclined to buy now for a pop to the top of the range. I’d rather wait until the move higher fails, or closes in on the 1230 area. A short there provides a stop that’s well defined and close; risk management is a big part of the game.

Todd mentions in the video that the vertical bar patterns that he teaches in the course work just as well on the daily charts as on the 3-minute variety; in particular, the inside vertical bar on Sep 23, when broken to the upside during the following session, clearly indicated that a nice move to the upside was probable. In this case, a buy stop at 1142 on Sep 26 would have created a winning trade to (potentially) almost 1196 on the 27th; a 4.7% return for two days’ work amounts to to 800+% annualized, which isn’t too shabby.