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Robert H

15-Minute Chart Reversal Strategy

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Robert,

I have been working on the 15 minute reversal and seem to be getting better at the entry, but am not very good at when to exit. Below is an example of an entry into NFLX. I saw the 15 minute candle reversing. 5 minute candles looked good. 1 minute chart showed the 9 crossing the 20. Things were going good, but then there was the dip around 14:28. The previous 1 minute candle was red and the next one (the one i exited) started out red and was dropping. I got out. Hindsight shows, I got out much too early. What are the indicators to get out of the reversal? The price eventually went to VWAP, which was my target, but with the current Bear market and getting stopped out in situations like this in the recent past and being short biased, I didn't want to lose my gains.

NFLX Reversal 2018-12-27.png

Edited by mmohr63

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I’m not Robert and I’m still learning myself, but isn’t there much more to go until your stop loss? If you can’t take partials due to share size, isn’t accepting a small gain the only reasonable and safest way to go?

From what I’ve been observing in the community, I think the ideology is to be consistently green instead of maximizing gains every bit of the way.

Or maybe there is something that we are not seeing in your charts.

Pardon my intrusion.

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Tommy, my experience with this community so far has been an emphasis for new traders to focus more at the beginning on trading properly and the gains would follow.

I did make a small gain on this trade, but I left a lot more on the table because I didn’t know what exit indicators to look for and I panicked somewhat because I have lost everything holding too long in similar situations. So, I think I entered the trade correctly, but if I knew and had more experience in exit indicators, I would be better at this strategy.

Thus the crux of my question. What are the typical exit indicators when trading this type of reversal strategy.  

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@mmohr63 It really depends. Sometimes I will bail on a new 5-minute low. Other times I will wait for a new 15-minute low. I will most definitely take partials if it fails to make a new 5-min high. When the price stalls like that it is either consolidation (good) or signs that the trend is weakening (bad). When the trend collapses, it becomes a reverse ABCD.

Keep in mind that the Reversal Strategy is no different than other strategies in terms of having potential targets and resistance in your path. Look for MA's to take partial with the final target at VWAP.

It also depends on your trading style. Do you keep a small number of shares until your break-even? If so, you could have rode this 15-min chart trend until $256 (higher highs and higher lows). If I recall correctly, this was a market-wide reversal and extremely strong in terms of momentum and speed. Under these circumstances, there should be no rush to exit the trade completely.

image.png.3348d6260cff2d70756dc71592f4dff9.png

image.png.5a1016b99f242a901bf45df1c7aa9abd.png

image.png.bf2ca35fe715f4657475fd409463926c.png

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Robert, how do I find candidates for this reversal? Is there some sort of scanner that notifies of stocks X% away from VWAP? i.e. How do you find potential stocks that are ripe/setup for this type of reversal?

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@Robert H I've been trying the 15 minute reversals for the last few days, it worked well in $AAPL today. For the $JD and $MU reversals, it came within a few cents of my target and bounced. I also took $ETSY yesterday but ended up getting out early. Looking back at them, maybe I should have taken profit a few cents above my target since the stock already dropped around 50 cents from the HOD. Do you find that since some of the move has happened by traders using lower time frames that by the time there's a fifteen minute low, some of the move has already happened? 

MU 02.06.19.jpg

JD 02.05.2019.jpg

AAPL 02.06.2019.jpg

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42 minutes ago, JD said:

I've been trying the 15 minute reversals for the last few days, it worked well in $AAPL today. For the $JD and $MU reversals, it came within a few cents of my target and bounced. I also took $ETSY yesterday but ended up getting out early. Looking back at them, maybe I should have taken profit a few cents above my target since the stock already dropped around 50 cents from the HOD. Do you find that since some of the move has happened by traders using lower time frames that by the time there's a fifteen minute low, some of the move has already happened? 

Yes, waiting for the new 15-min low means a later entry. However, I've found that the 15-min low confirmation increases the probability that the reversal occurs. If you go in too early on a new 5-min low, often it can squeeze you (ETSY did this yesterday and almost hit HOD before dropping). With experience, you will get better at gauging when it is ok to jump the gun.

Your MU trade was great. It bounced off the MA and then hit the VWAP at noon. Really strong stocks will often find support off the MA's during their descent.

JD basically bounced off the VWAP. As with any chart, MA's and levels are areas +/-0.05-0.10 and not exact points. I use limit orders a few cents away from targets to increase the likelihood of getting filled.

AAPL made a nasty pullback and new 15-min high before losing VWAP. This kind of move is typical; it's like a giant, slow-moving reverse ABCD.

For the reversal strategy, you need to use loose enough stops and give the play time to work out. This may not suit a lot of trader's styles or personalities. It took me awhile to improve my patience and learn to trust the charts. Cheers.

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Thanks Robert, your Youtube recaps have been really helpful. So far this strategy has been working out really well, I just have to keep working on my execution.

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