60min Trading Strategy
August 1st, 2010
The charts below outline a method for taking long or short positions triggered by set ups in the 60min time frame. This is nothing new but has probably been around since the first 60min charts. There are ‘buy’ criteria and ‘sell’ criteria. Once the criteria is met, appropriate action can be taken. The number of days for each of the charts varies as do the notations, but the strategy, which centers around the RSI, the 20 period MA, and trend lines, is the same. Hopefully the notation on the charts is enough to clarify the strategy. The 20 period MA, whether that is a SMA or an EMA, is the most important of the MA’s on the charts, IMHO, of course.
The charts are of IWM or the $RUT but can be used as a template for trading other indexes, but it’s important to point out that this strategy did not work for the $SOX index for Friday, July 30th because what appeared to be a breakout of a Bull Flag pattern actually turned out to be the formation of a Bear Flag with a subsequent break down from that pattern. This strategy may or may not be suitable for trading individual stocks.
The following charts are intended for educational purposes only and this is not in anyway a recommendation to buy or sell any stock, ETF, or other investment vehicle. You must do your own due diligence.
The charts are not necessarily posted in order of importance.
Chart courtesy of FreeStockCharts.com
This next chart is a shorter term chart with emphasis placed on the current and/or potential Bull Flag pattern that has formed. The green arrows mark the potential buy signals from the various indicators and the red arrows mark the potential sell signals.
Unfortunately there is an error on this chart. Where it says “Sell when RSI dips back below 80,” it should read instead, “Sell when RSI dips back below 70.”
This next chart is a 20 day chart with each of the various stages of buy and/or sell signals marked with vertical lines.
This next chart is a 40 day chart of the $RUT.
Charts courtesy of StockCharts.com
Once you have determined that a ‘buy’ or ‘sell’ signal is about to manifest, you switch to a shorter term chart and watch for either an entry point or an exit point.
Feel free to copy any and all of the above charts.
