A New Day Trading Setup that Works in TODAY’S Markets

A New Day Trading Setup that Works in TODAY’S Markets


hey welcome to this video on a
day trading setup that used to work in fact this was one of the first day trading
setups that I was taught it’s a traditional setup and I see that
it’s still taught a lot and I planned that it doesn’t work anymore
and basically here’s what it is so this represents YH s yesterday’s high and Y L
is yesterday’s low so the teaching was all right when we’re looking for the
market to decide on whether it’s going to be bullish or bearish for the day you
look forward to break out of the range of either above yesterday’s high or of
course conversely below yesterday is flow and it makes sense because if it
doesn’t break above yesterday’s high or below yesterday’s low well then when you
look at it on a daily chart where each bar represents one day of price activity
it’s going to be an inside bar and that’s fine and that happens sometimes
and we just get very neutral days so the thinking is well if we’re going to
really get a market moving on an intraday basis where we can really day
trade something that’s just not going to move sideways all day we want this thing
to really move up and break yesterday’s high or break yesterday’s low
unfortunately this is a type of breakout trading and I don’t personally find that
breakout of a support resistance levels work very well
in and of themselves now you will get breakouts and but I treat them very
differently because we get so many false breakouts is the point so so many false
breakouts now so everything’s looking great markets cranking right along okay
and if you said I’m going to trade the breakout of yesterday’s high I’ve toned
too bad right you’re making some money and if you use some good money
management you’d probably have a profitable trade there and but then
let’s see it starts coming back down comes back down goes back down comes
right back under yesterday is high so as you can see the green bar
yesterday’s high the Green Line I should say
so it did get above it it did stay above it could have been made a little bit of
money but did it create a bullish day in that is the thing no lasted for a couple
of hours and a lot of times they don’t even last that long so if you’re looking
for oh this can be a bullish day you’re going to not be a very happy puppy in
fact it goes all the way back down before the market closes it actually
goes all the way back down and breaks yesterday’s low to the downside so it
reeked it completely reverses goes all the way through yesterday’s price
activity and goes down below yesterday’s low and so then you get a break get down
here and then again you could say the same thing well great okay that didn’t
work out too good worked out short-term not long-term it didn’t turn into a
bullish day in other words well maybe it’s going to be a bearish
day after all so when we break yesterday’s low now rainy comes down and
then comes right back on up at the slide okay getting kind of frustrated now and
then as you can see it it just continues to go it goes back above yesterday is
low and goes right back into the middle of the range and guess where we closed
we closed in between yesterday’s high and low so it did not turn into after
all was said and done it didn’t turn into a bull estate or a bearish day we
had a little breakouts to the top we got to the bottom both essentially failed
and could have made a little scalped on them I suppose but it’s not a good
technique for determining whether the day is going to be a bullish or bearish
day now here’s another example and in this one it’s a little worse the last
one wasn’t too bad this one’s not too good so we get above yesterday’s high
and then we come right back down so this one didn’t last long at all so that was
just pretty disastrous in other words when we take a trade we want to get as
much reward out of it we want to get as much movement out of it as possible we
don’t want just little breakouts and then it retraces back down and so the
point is it’s really goes back to the basic premise
of professional trading keeping your lots of small letting runners run so
these breakouts are not creating situations where we are allowed to
letter winners run because they’re not following through very much so here’s
another option and the option is that instead of looking for breakouts of
yesterday’s high and low looking for the breakout of a different range and so
here’s yesterday’s close and here’s your pivot point or your central pivot based
on floor trader pivot formula and what I do is now see if you look at it for
breakout of previous day’s high or low you’re already in at extreme right so
the markets already made a move and you’re looking forward to really make a
big move and sure sometimes that happens and if it keeps going in your way which
sometimes it will then that’s great it’s just I don’t see it happening as much as
it used to so I want to get in early professional traders we want to get in
earlier so the yesterday’s close is essentially let the previous day is
market after all was said was done all the participants decided okay this is
what the market was worth you know today and so that’s considered the fair value
if you will from that day if you want to look at be super precise then go ahead
look at the settlement and the pivot point is kind of the same concept that’s
your mid mid zone kind of the balance of power if you will and so I look at these
two and I take them as a zone as a neutral zone actually let me draw that a
little differently here so drive on the lines instead of the data there okay so
between those two lines I’m considering that we’re really a neutral market we’re
in a balanced market neither the Bulls nor the Bears have taken over as opposed
to waiting to break above the high yesterday’s high to decide it’s a very
bullish market or to break below yesterday’s lotus-eyed it’s a bearish
market so I’m going to make that decision earlier so now that can improve
my reward tremendously because and even if the market doesn’t move as much so
well let’s just look what happens here and so once we take a break had trade
below in this case we’re going we started above yesterday is close and
that’s right at the beginning of the market ok so I wouldn’t really trade any
of this yet I’d wait for it to get down below outside of that balance of power
if you like to wait for if you do like breakout trade I guess you could take it
right there if you want a week for throwbacks which is a little safer I
think then you can wait for it to retrace back here to the pivot point or
the central pivot and that could be an entry point and then so great now it
goes down down down well see we’ve already made some decent money now
because there the red line is you can see that that’s yesterday’s low down
there and as it continues to go let’s see if it breaks yesterday’s low it
actually does alright but see if we waited that’s at the point now we’ve
already made some good money because we got in based off of the the mid value or
the the ending value of yesterday’s market instead of waiting for to reach
extremes so even if it doesn’t break yesterday’s low we’re still making money
if it does though we’re just making more money and in this day again well there
you go breaks yesterday’s low it does comes
back there’s a throw back goes down stays down there a little bit comes back
up but by the time we close it comes back up above yesterday’s low again so
this is pretty much a perfect example and that is what happens more days than
not so just real quick review again just to explain it I like to especially for
intraday trading which really that’s what this is all about is to use this
zone here between yesterday’s closed and the central pivot or the pivot point as
kind of a balance of power so to say and look for bull markets above it bear
markets below it to look for that directionally now no one’s saying it’s
going to last all day or day traders we don’t expect every day to be
uni-directional in fact that’s very rare like it’s looking too
have a good reward to risk ratio and this gets you in earlier and so it gives
you a better reward to risk ratio and then on those days when the market does
go above the previous stays high hey you’re golden you’re in way before
the breakout traders and when it does go below the previous stays low again
you’re golden you’re in way before the breakout traders there too so I found
this works very well and invites you to check it out with these levels on your
charts and check it out for yourself if you like this video please understand
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24 Comments

  • Harshal Sharma

    June 21, 2017

    what works better….fibonacci or standard pivot points?

    Reply
  • Neet Easy Tutorials.

    June 21, 2017

    thanks

    Reply
  • Pawel Michalowski

    June 21, 2017

    Barry ever since you mentioned pivot points in one of your older videos I never trade w/o them and you're right they seem to lead the way in terms of support/resistance bc they're the most objective lines … once again thank you for everything that you do to help us become better traders!

    Reply
  • bore very

    June 21, 2017

    what is pivot points?

    Reply
  • Dinesh Singh

    June 21, 2017

    Sir, thanks for the video, I learnt a lot from your videos. just wanted to know where to put stop loss in this strategy and whats the success ratio?

    Reply
  • Al Mallette

    June 21, 2017

    nice I like the info! Thanks Barry

    Reply
  • vanscoyoc

    June 21, 2017

    Breakouts only work for me if there is a strong trend in place. Other than that…forget about it, you're right.

    Reply
  • vanscoyoc

    June 21, 2017

    You should do a video on Heikin Ashi candles. That's what I use along with 33sma and bollinger bands on 33sma and 66sma drawn as a cloud as a warning, 30 minute charts mostly but look to make sure of the direction of the daily HA candle color and 2 hour. I also draw a line showing the exact price where the HA candle color will flip colors.

    Reply
  • Antny CA

    June 21, 2017

    Barry, what size chart are you working with TY

    Reply
  • Erona Z

    June 22, 2017

    Another great video!!!!

    Reply
  • เกี๊ยว อย่างเดียว

    June 22, 2017

    I have a question, not about this video but time frame. Can you make a video about the time frame? like what is the different between 1 min and 5 min or daily or weekly time frame for reading and interpreting, what is the time frame for day trader or for non day trader.

    Reply
  • Daniel Tan

    June 22, 2017

    Nice video. How do we decide what is the closing timing for forex market?

    Reply
  • George Harrison

    June 22, 2017

    I and my wife are new to trading and find your videos VERY helpfully! Thank you. Please keep up the good work.

    Reply
  • GANESH PATHAK

    June 22, 2017

    Good video but unable to poor knowledge of English but learn about range, thanks

    Reply
  • Kitara Frei

    June 23, 2017

    Hi Dr. Barry, thanks for another great video! Have been missing your videos! I have a question, how do you trade the pivots if the stock gaps up above the high/central pivot, let's say it opens in between R1 and R2, would you treat the same way? R1 being the high of previous day pivot and R2 being the central pivot? Thanks!

    Reply
  • Chris Ford

    June 24, 2017

    Learning a lot from your videos. You are one of the better sources to learn from. Thanks again!

    Reply
  • John McLoughlin

    June 25, 2017

    Nice video How do you determine direction. Is it simply go high above range or low below. What if pivot is above previous close. Thanks

    Reply
  • Boniface Nyachula

    June 26, 2017

    Hey Barry perhaps you can do another video for the floor traders in Chicago on , "How to restore maket volatility."

    Reply
  • MrCosmos110

    June 30, 2017

    Great Videos Barry, I learn something from every one of them.

    If you find time someday, could you make a video on "Lagging Indicators"? I've heard you mention them several times but I've never absorbed the concept of how to use them.

    Thanks
    …………..

    Reply
  • Alex Foo

    July 6, 2017

    thank you for the video. Somehow i couldn't find 'pivot point' indicator in my technical analysis tool. Is there any other name for that?

    Reply
  • Sopyan Zain

    July 20, 2017

    Hello Barry. I have follow you channel for past few week. But I still didn't know where to get 'Floor Pivot Point' indicator. Btw im using mt4 as my platform.

    Reply
  • Adrianna De Santos

    August 20, 2017

    How do we find the pivot point? Is this a 5 min chart?

    Reply
  • Matt Feeney

    December 21, 2017

    How to find Pivot Points… Here's a link to Barry's formulas: http://www.dummies.com/personal-finance/investing/floor-trader-pivots-and-trend-trading/

    Reply
  • ran shabi

    December 21, 2017

    very interesting and informative insight on current markets

    Reply

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