What Are The Differences? Reversal Timing - But what Type?
I find myself looking for reversals most of the time. This means I need to be patient. I'm often not very patient, at least not enough which is why I will throw out feeler trades which mostly get punished, but besides that. I'm looking at my trades and I feel like I'm looking for the backside of trades but which ones? And how can I differentiate between what kind of backside I'm going to get? I feel like there are kind of three that I'm thinking about here lets call them the Pop and Drop (all day-this can be long too), the Give and Go (all day), and the MoMo Reversal (for the rest of the day). Obviously there are lots of pull backs and such that can be scalped and such but I'm looking at bigger moves that can bring in a bit more. So they're shortest to longest. The pop and drop is maybe less than 5 minutes where it shoots up maybe hits pre market highs/lows or some level and then hard reverses and drifts up or down for the rest of the day. Then there's the give and go where the stock makes a pretty strong drive in one direction for 15-45 minutes and then it reverses and heads in the opposite direction for the rest of the day. And then the MoMo Reversal is much like the Give and Go, but later and probably more extended and will probably create a V or A shape vs a check mark. Why am I categorizing them, because I see that many times I try for a pop and drop but it's really a give and go, so I'm "early"/wrong in the trade. Or I'm thing its a give and go, but there's much more Momentum and the turn happens hours later - again "early." So basically I need to figure out the criteria that differentiates the 3 for me so that I can better trade them. Things I'm thinking about is if it has moved the daily ATR or two? Maybe whole number/level rejection from higher time frame? Maybe the inconclusivity/conviction of the catalyst? Short Interest? Institutional Ownership? Anyway, I'd like to see some more specific patterns/criteria that will clue me in on the reversal timing of a trade besides just watching price action/tape (though it's probably the best way and I need to get better at it). What are ways/things you look at for timing reversals or creating ideas on likely scenarios for reversals? I understand we want to be on the right side of the V, but what criteria can I use to help me catch the right side of the V for different stocks at different times? I think this conversation will be continued with myself in the near future. Cheers!
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