Finding ABCD's on a reversal scanner

February 11, 2020

I'm running a standard reversal scanner to alert me of a new 5 minute high or low.

If 20 SMA is above 200 SMA, alert me of a new low.

If 4 consecutive 5 minute candles, alert me of a new low.

If 2 consecutive 15 minute candles, alert me of a new low.

If 1 consecutive 30 minute candle, alert me of a new low.

The opposite is true for bottom reversals and reverse ABCDs.

Here are my rules right now -

Top Reversals/ABCD - I was just alerted of a new 5 minute low

- Long at the next 5 minute high that is above the 8 SMA on the 2 & 5 minute charts

- OR

- Short at the 15 minute low if price is below the 8 SMA on the 2 & 5 minute charts

Bottom Reversals/Reverse ABCD - I was just alerted of a new 5 minute high

- Short at the next 5 minute low that is below the 8 SMA on the 2 & 5 minute charts

- OR

- Long at the 15 minute high if price is above the 8 SMA on the 2 & 5 minute charts

Once I start watching the stock, I start looking at bigger time frames for levels of support or resistance. If there is a resistance level very close I will probably wait to take the trade until it crosses it.

Sometime's the trend seems to continue, but this is a reversal scanner so be ready for a reversal. Maybe I should look for two consecutive 5 minute candles and a new 2 minute hi/low, but I think that would be too many alerts.

I'm pretty new. I feel like this is a fairly simple strategy and I have been successful with it in the few days that I have used it. I would like to hear if you have any suggestions to improve on this. I don't have my stop loss and profit taking indicators nailed down yet.

Here are several examples from today.