Ken
Calhoun President and Head Trader
of Daytrading University
Focus: Trading education, especially day trading Nasdaq
tech stocks
My Breakout/Breakdown Trading
Strategy for Using eSignal
Strategy:
2-Day High/Low Breakout Strategy
Using eSignal on 6 monitors, I combine this breakout
strategy with several of eSignal's advanced chart indicators
to identify breakout-long and breakdown-short trading
entry opportunities.
Advanced
Chart Indicators Used: 1-minute candlestick chart,
Fibonacci retracements, stochastics and volume bars
with time and sales (expanded view).
Market
Charts Used: 1-minute line TRINQ chart, 1-minute
line COMPQ chart, 1-minute line $SOX $GSO $NBI sector
chart indicators. I use a quote box with ranked sector
percentages (change from open) and a 2-day, 2-minute
candlestick chart to identify when a stock is moving
outside of the previous day's trading range on higher
volume.
Timing:
Trades of 1- to 15-minute round-trips executed primarily
during the 9:40 a.m. to 10:30 a.m. (Eastern Time) time
frame on days on which the Nasdaq composite (COMPQ)
is trading outside the previous day's high/low range.
Trade
Entry Using eSignal: Starting at 9:35 a.m. (ET),
scan for stocks that are making the strongest percentage
change (from the open) in a quotebox. Pull these up
on a linked chart to identify those that are moving
outside their previous day's trading ranges (screenshot
1). The goal is to identify stocks for long/short opportunities
once they have moved above the previous day's high or
below the previous day's low.
KEN'S EDUCATOR
CREDENTIALS
Ken Calhoun, President
and Head Trader of Daytrading University, is DTU's founder
and is the live trader training coach at Daytrading
University's Live Trading Room. Having provided online
training to active traders from more than 24 countries,
he is dedicated to helping traders learn successful
trading skills, including how to identify support and
resistance areas, trends, entries and exits for their
stocks. Ken trains members of DTU to trade using 2-minute
charts, stochastics, $TRINQ, sector trading and market
indexes, and advanced level 2/t&s trading techniques.
He took his profits from a successful 12-year consulting
career and discovered the world of active stock trading.
Ken applies a wealth of disciplined charting and applied
technical analysis chart pattern knowledge to his active
trading methods.
KEN
CALHOUN'S WRITINGS
As
an internationally published business management consultant,
Ken previously trained more than 22,000 people in 144+
companies worldwide. He is featured on the video "Advanced
Day Trading: Using Chart Patterns and Nasdaq Level 2."
Filters:
To avoid false breakouts/breakdowns, use the following
indicators: (a) The stock must be in one of the strongest
2 sectors for the day (as measured by percent change from
open), (b) The stock's volume bars on the advanced chart must
be increasing during the 3 minutes prior to the trade entry,
(c) Time and sales must be speeding up (faster transaction
rate) at the time of entry, in the direction of the trade,
(d) Entry should be no sooner than .3 points higher than the
previous day's high for a long or no sooner than .3 points
lower than the previous day's low for a short (screenshot
2).
Trade Exit
Using eSignal: One of eSignal's many strengths is the
ability to use an expanded time and sales chart in combination
with the Advanced Chart indicators. Use a trailing stop of
no greater than .2 points for all daytrades, and look for
an exit when the expanded time and sales chart starts to show
a slower rate of transactions and/or a "green and red"
pattern, where transactions are beginning to reflect equilibrium
between buyers and sellers; this provides an exit signal.
eSignal's
Advanced Charting: Using Fibonacci retracement lines
and stochastics on a closeup 1-minute candlestick chart is
an excellent indicator for spotting reversals and trade exits.
Use the market charts (sector charts, TRINQ, COMPQ) and time
and sales to help spot entries, use the closeup 1-minute Advanced
Chart with time and sales to help spot trade exits.
Tip:
Keeping several dozen small 1-minute line charts open (thumbnail
sized) on several monitors helps the astute daytrader spot
momentum entries, which can then be examined more closely
using the 2-day, 2-minute and 1-minute candlestick closeup
advanced chart.
If you have any questions, or for more information, please call: 1.866.367.9296.
From outside the U.S., call 1.510.723.1737. Or,email us. In Europe, call +44 (0)20 7825 8770. In Australia, please call: 1800
089 275. In Asia, please call: +61 2 8668 1600.
