Technical Analysis

Technical analysis is a trading methodology that identifies opportunities by analyzing statistical trends gathered from live trading activity. Technical analysis focuses purely on the market's price action and trading patterns.

Historical price movements tend to repeat themselves. This can be partially explained by the consistent and shared psychological behaviors in the face of similar scenarios over time. By analyzing the past, a system can be created that drives higher probability outcomes.

Key elements of technical analysis include:

Chart patterns and formations
Price trends and momentum
Trading volume analysis
Technical indicators (moving averages, oscillators, etc.)
Support and resistance levels

Every moment in the market is completely unique though, so no approach will work 100% of the time. Performance is based on the ability to exclusively adhere to the edge, and letting the probabilities play out in the long term.

The System

My approach combines precise technical analysis with multi-timeframe context to identify high-probability trading opportunities:

Price Action & Volume Analysis

I carefully examine the relationship between price movements and trading volume, focusing on:

Candlestick patterns with corresponding volume confirmation
10-minute chart analysis for day trading execution

Contextual Level Analysis

I establish a comprehensive framework of key levels to understand price action within its proper context:

ATR Fibonacci Levels for volatility-based targets
Significant swing highs and lows
Psychological price thresholds
Historical support/resistance zones and supply/demand areas
Liquidity levels across multiple timeframes (Monthly/Weekly/Daily/Hourly)
Dynamic trendlines
Exponential Moving Averages (utilized during trending conditions)

Multi-Timeframe Perspective

I analyze five distinct timeframes to establish complete market context:

Weekly: Long-term trend direction
Daily: Intermediate structure
4-Hour: Medium-term patterns
Hourly: Short-term context
10-Minute: Trade execution timing

This integrated approach provides a comprehensive understanding of market dynamics and enhances trade selection accuracy.

Trade Setups

By Market Phase

Trading the Trend

EMA Ribbon Strategy: Focus on pullbacks to the 10-minute 8/21 EMA zone
ATR Level Analysis: Prioritize breaks and retests, especially when coinciding with the 8/21 EMA zone
Pattern Recognition: Identify Golden Gate, Brooklyn Bridge patterns and 70%+ level extensions
Gap Analysis:
- Gaps opening above/below 23.6% level have 90% probability of reaching 38.2%, 76% probability of reaching 61.8%
- Thursday opening gaps fill 82% of the time
Continuation Patterns: Flag formations and failed Vommy patterns

Trend Transitions & Reversals

My default bias always favors trend continuation. I require clear, justifiable patterns before considering counter-trend positions. Key principles:

Reversals develop gradually and typically involve stop runs, especially in strong trends
Price action often creates fear, uncertainty, and doubt to shake out positions before the actual move

Reversal Signals

Vommy/Inverse Vommy Patterns: The 48e break signals higher probability of explosive counter-trend movement
Vommy Confirmation Factors:
- Surge in trend direction with notably low volume (the "fins")
- Extended stochastic readings
- ATR level rejection
- Extended conditions on higher timeframes
- Failed Vommys confirm trend continuation
Technical Reversal Patterns:
- Wedges with divergence (requiring break and retest)
- Head and Shoulders / Inverse Head and Shoulders (wait for neckline break and retest)
- W and M formations (wait for neckline break and retest)

Consolidation Strategies

Box Trading: Enter at support/resistance or await break and retest
Squeeze Analysis: Focus on price action rather than momentum direction, anticipate significant moves
Strategic Patience: Consider taking the day off during unclear consolidation
Trigger Box Probability: If price opens in the trigger box, 62% probability it closes within the trigger box

When Price is Extended

Mean Reversion Principle: Price moves beyond 1 ATR occur only 12% of the time
Reversion Setup Requirements:
- Price already moved 1+ ATR
- Extended conditions on multiple timeframes
- Lower high or higher low formed on lower timeframe
Implementation Strategy:
- Approach as scalp opportunity due to counter-trend nature
- Consider out-of-the-money options as they maintain low delta if price moves against position