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Leigh Jeffery

Oct 27 - Jarad - Pierce And Fail: Why Lack Of Conviction Leads To Reversals

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Please use this thread to post your questions before and after the Success Webinar!

Pierce And Fail: Why Lack Of Conviction Leads To Reversals

Ever notice how strong reversals tend to happen in a similar pattern? Have you ever wanted to be first in line for a big move off the lows and highs? Some of the best reversals tend to happen in a predictable way: a break of a level that fails and returns back to the starting price. These form our criteria for the most aggressive setups: The Pierce and Fail. I’ll explain how to find these setups, how to enter a position, and how to manage once you’re in the trade for maximizing the potential.

Date :   Tues, Oct 27, 2020
Time :  8:00 PM ET
Location :  Webinar Room (Lifetime Members only)

Edited by JaradBBT
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Hi - Jarad mentioned in his webinar that he'll post a video about L2 and T&S. Will that be posted here when it's ready? Thanks.

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Pierce and Fail - Trade Book (Work In Progress)

Description:

Pierce and Fail is a Trend Reversal Setup characterized by a Breakout through a Major Level of Support/Resistance with High Relative Volume, followed by a change in Sentiment and Momentum back through the Level as the Trend Inventory is Exhausted and must return to Value Areas to gain new inventory.

Purpose:

  • Reversal Strategy to use both as a Aggressive Scalp Trade with strong Risk/Reward (R/R) along with potential to Trend against initial entry.
  • Using Volume Signals to help justify Entry and Stop Loss Area compared to arbitrary concepts that are not definite.
  • Clear Risk/Reward; Quick Trade with Potential for Large Reversal.

Observation:

  • Kept observing stocks start by forming a Morning Range; once Range was broken (and retested), stocks tend to go in search of value.
  • Stocks that have Higher Time Frame Trends and/or Ranges may have Intraday Transitions to Levels that provide signals for Reversal Strategies with a high R/R Probability.

Concepts:

  • Levels - Support and Resistance, Areas of High Interest based on prior Price Action
    • Ex. Daily Levels (HOD/LOD), Inflection Pivots, Premarket High/Low, Whole Numbers, etc
  • Ranges
    • Support and Resistance Zones defined by Price Action moving between each Zone
  • Transitions
    • Moving from one Range to another, defined by a Low Volume Zone between Ranges

Time Frame:

30 Minutes after Market Open until One Hour Before Market Close

Indicators:

  • Extended from 9 EMA on 5 Minute Chart
  • High Volume Event(s) at Major Level
  • Breakout is not sustained, Level 2 and Time and Sales shows Opposite Sentiment

Confirmations:

Reversal Candles on Smaller Time Frames

  • Engulfing
  • Pin Bar
  • Wide Range/Resting/Pierce and Fail (Name Pending)

Entry Signal:

  • Price moves through Level on High Volume
  • Sets a High/Low of that Breakout
  • Returns through the Level (Level 2 and Time and Sales are showing Opposite Momentum to Trend)
  • Entry at Level

Stop Loss:

Slightly beyond Breakout Price to avoid getting 'tagged'

Target:

Depends on Trade Management

  • Moving Averages
  • R Targets
  • Pivots

Avoid:

  • High Volume Events that occur through Intraday Levels on Larger Time Frames
    • Leads to Trend Continuation against the Reversal Setup
  • Averaging Down if Price Breaks Below Stop Loss on Volume
    • Sizing into a larger position once a second shakeout candle forms is acceptable, but be wary that if Price goes through the initial Stop Loss without returning to above the prior, the trend can continue against you quickly

 

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