Intraday Exhaustion
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After a run in trend of 30 minutes, the five-minute bars will tend to
exhibit a smaller high-low range and begin to stall trend. This is represented
by the letter A in Figure 5.19. Watch this area very closely
because it may signal an intraday shorting opportunity The last
three or four price bars should have the appearance of shrinking.
This is a result of reduction in the high-low range as seen at the top of
Figure 5.19. Another key to this pattern is that the first three or four
bars should have higher highs and higher lows. This is represented
by the price bars between the dotted lines indicated by letter B.
We have examined the information on overbought conditions
that relate to microtrends and intraday shorting. You have learned
screening procedures useful for the day trader and microtrend
trader. Now let us turn our analysis to the long term by defining
bearish long-term trends and discussing how we short them.
After a run in trend of 30 minutes, the five-minute bars will tend to
exhibit a smaller high-low range and begin to stall trend. This is represented
by the letter A in Figure 5.19. Watch this area very closely
because it may signal an intraday shorting opportunity The last
three or four price bars should have the appearance of shrinking.
This is a result of reduction in the high-low range as seen at the top of
Figure 5.19. Another key to this pattern is that the first three or four
bars should have higher highs and higher lows. This is represented
by the price bars between the dotted lines indicated by letter B.
We have examined the information on overbought conditions
that relate to microtrends and intraday shorting. You have learned
screening procedures useful for the day trader and microtrend
trader. Now let us turn our analysis to the long term by defining
bearish long-term trends and discussing how we short them.