If you are looking to join the Discord (now separate from the newsletter) please see here: JOIN THE DISCORD Please email help@pharmdcapital.com if there are any technical issues. Plans/levels will be posted in the Discord so the Discord option includes Substack content but a new Substack subscription does not include Discord access.
Be sure you have read the Starter Kit, including the free section even if you’re a paid subscriber. Trading Doggy Style Starter Kit
The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Market Analysis for the Week of 9/7
There is a 7-day free trial available for the newsletter so feel free to use that to review the starter kit, weekly plan, and plan for tomorrow. I cannot do trials for the Discord at this time.
Friday was a great example of application of some of the starter kit concepts, so I’ll do a bit of an extensive recap here.
We opened on a large true gap up so true gap rules applied. We monitor for interest above the open. At the open, NQ trading higher for about 20 seconds to put in the 5-minute OR high which was JUST above the overnight high. It then traded below its 5-minute OR low. For the first 30 minutes the market traded in a tight range but barely traded above the open and did not trade above its 5-minute OR high. This is objectively a bearish open on a true gap up.
LAAF the overnight high
No trade above the 5-min OR high
Limited trade above the open at all
Break the 30-minute OR to the downside with continuation. This last piece is not in the starter kit but we’ve covered in the Discord in terms of trading true gaps (time to update the starter kit).
Given the above, for me there is effectively no buying the dip until at least the prior day high is seen. Fortunately, by then the market was straight down without a single green candle on the 5-minute so there was no reason to buy a falling knife. These are very simple “hacks” that, once evaluated day in and day out become automatic and can at the very least keep one out of trouble. Missing the short is completely fine. A missed opportunity is not an account drawdown. Buying the dip all the way down, however, can destroy an account in a day given that move. If this happened to you, then accept it, learn from it, resolve to get better and move on. The '“BTFD” impulse has almost been forced on traders since April as these days have been few and far between. Once
Paid Content Below or in the Discord
Keep reading with a 7-day free trial
Subscribe to PharmD Capital Trading with PharmD_KS to keep reading this post and get 7 days of free access to the full post archives.