How to find Bullish Anticipation setup
I have been publishing list of anticipation candidates for last couple of months. What I post is same list you can generate yourself once you know how to do it step by step.
Anticipation requires more pre planning and effort than buying a breakout. You need a process flow to do that. The process should be efficient and done daily after the market close.
The suggested process flow is a template you can develop your own process.Only 3 to 5 quality ideas should be tracked for best results.
Finding "A" grade pre Momentum Burst setup should be your first priority
Once you have list of anticipation setups narrow them down to 1 to 5 for next day action.
Quality is more important than quantity
Double Trouble Scan using Telechart
US common stocks
c/minl252>=1.8 and minv3.1>=100000
Price % change Today between 1 to -1%
US Common stocks
avgc7/avgc65>1.05 and minv3.1>100000
Price % change Today between 1 to -1%
After running these two scan merge them together as some stocks will be common.
Go through the list to find setups that are setting up for possible b/o .
What to look for in good anticipation setup
series of narrow range days in pullback/consolidation
orderly pullback with no 4% b/d during the pullback or consolidation
low volume pullback
low volatility during pullback
linear first leg if looking as continuation setup
Stock should go up smoothly and not in volatile manner
3 to 10 days consolidation/pullback
not up 3 days in a row
To anticipate a breakout look at stocks currently not undergoing momentum burst.Stock should be in extremely low momentum phase for anticipation .It can be a shallow pullback or consolidation in established momentum phase.
To anticipate look for stock with extremely low volatility. A stock with low volatility in last 5 to 10 days is ideal candidate as part of a continuation setup.Look for series of low range bars in last 5 to 10 days.Look for stocks with bollinger band squeeze.
Avoid Anticipation setups on extended stocks. First or second anticipation setup in established trend is best.Extended trends needs to be avoided for anticipation as failure is high on them.
Look for early entry on anticipation candidates.Anticipating a breakout helps you get an early entry and can improve your per trade profits. It also can lower your risk as your stop is closer. It can help you profit from even smaller moves. For that entry without waiting for breakout is best.
2 comments:
I just came across your blog. Thanks for teaching traders the setups that have helped you. Could you tell me the terminology in your indicators like c, c1, minl252, minv3.1, etc?
c= close price
c1 = close 1 day ago
minl252= lowest price in last 252 days
minv3.1= minimum volume in last 3 days as of 1 day ago
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