Pivots, Patterns, and Intraday Swing Trades, + Website

An original approach to trend discovery and trade entry

Initial forays into day trading stock index futures reveal a starkly different decision environment. There is no time to dwell on technical conditions. Intraday volatility in the stock indices is far more exaggerated than the daily bar charts of other markets, partly due to the extreme leverage, partly due to the intense attention. And positioning techniques that prove reliable in the action of the long-term trends in other instruments tend to fail in the countertrend reactions of the highly leveraged S&P futures contract within the short-term. For the informed trader, tremendous opportunities in these intraday trend swings can be captured. This book will show you how.

Filled with detailed technical models, this reliable resource skillfully utilizes innovative methodologies for trend discovery and trade entry in mini-stock index futures markets. It offers a fresh approach to understanding and capitalizing on market volatility, allowing you to sort out the apparent chaos of the day trading environment through codified and recognizable trade entry setups.

• Highlights trading techniques that are anything but mechanical scalping
• Explores conceptual event models and their accompanying rules
• Contains tools by which major intraday swing trends can be identified quickly and often at the very turning points where they begin
• Explains the underlying order and structure to the markets based on the repetitive nature of human behavior

Engaging and informative, this reliable resource will put you in a better position to excel in today's dynamic markets.

Preface xi

Part One Time Frame Concepts

Chapter 1 A Three-Frame Day 3

The 1st Frame 6

The Midday Frame 8

The Last Hour Time Frame 9

Summary 11

Notes 11

Chapter 2 Opening Range Bar 13

ORB Defined 13

3-Bar ORB 15

ORB Pennant 17

ORB Matched Highs/Lows 20

Summary 21

Notes 22

Chapter 3 Pivot/Exhaustion Grid 23

ORB Kilroy 24

Break-Away Pivots: The Pivot Ledge 27

The Break-Away Lap 28

Previous Highs and Lows 31

Previous Closing Prices: The Gap 34

Tick Bar Laps 35

Dynamic Exhaustion Levels: The EMAs 37

Floor Trader’s Pivot Points 40

Fibonacci Targets 41

Measured Move Targets 43

Market Profile 43

Trend Lines 44

Summary 46

Notes 46

Chapter 4 Dough Bar to Die Bar 49

Summary 54

Chapter 5 Leadership Divergence 55

Summary 62

Chapter 6 The Work-Done Concept 63

Summary 67

Chapter 7 Trading the News 69

Summary 76

Notes 77

Part Two Day Model Patterns

Chapter 8 Persistent Trend Day 81

Persistence in Trend: It’s a Thing 82

ORB Entries 85

Telltale Leadership 85

Leadership Shift 87

Flubber Bounce/Monkey Bars 89

Last Chance Texaco: The 200EMA Entry 91

Summary 93

Notes 93

Chapter 9 Test-and-Reject Day 95

Summary 101

Notes 101

Chapter 10 The Split-Open Day 103

Summary 104

Notes 104

Chapter 11 Day Model Sequence Cycle 105

Summary 111

Notes 112

Part Three Repetitive Chart Patterns

Chapter 12 The Momentum Grid 115

Summary 119

Notes 120

Chapter 13 Pre-Breakout Pause Pattern 121

Summary 124

Chapter 14 The Classics Revisited 125

M-Tops, W-Bottoms 126

Telltale Triangles 127

Head-and-Shoulders Reversals, Revised 131

The Rising/Declining Wedge 134

Midday Channel 136

Summary 139

Notes 140

Chapter 15 MA Pattern Concepts 141

The EMA Pinch 141

Gap-Close or Further? 143

The EMA Cup 144

The Cup as Breakout Trigger 146

Summary 147

Part Four Confluence and Execution

Chapter 16 Transition Time Reversals 151

Summary 156

Chapter 17 Trade Entry Models 157

Summary 172

Chapter 18 The Trade Plan 173

Prescript 174

Blueprint 176

My Blueprint Notes 179

Summary 183

Appendix A Companion Website 185

Appendix B Color Legend 187

Appendix C Serial Sequent Wave Method 191

Appendix D ValhallaFutures Indicator Package and Intraday Index Futures Trading Course 195

Appendix E Screen Capturing an Event Library 197

Appendix F Randolph Newman 199

Appendix G Fibonacci versus Pivot/Exhaustion Grid 203

Appendix H The Last Triangle 207

Bibliography 209

About the Author 213

Index 215

M. WILLIAM SCHEIER is the owner and founder of ValhallaFutures.com. Will started his trading career as a stock and futures broker in the early 1980s, learning to trade his own account and advise his clients, while mentoring with a retiring cotton trader. He then trained on the floor of the CME's S&P pit. With the advent of electronic trading, Will shifted his focus to day trading stock index futures in the smaller time frames, transferring much of what he learned from floor traders onto the screen. He estimates that in his efforts to further his trading education, he spent more than twenty-thousand dollars on courses and materials vendors of technical analysis, but found little if anything useful for trading in the smaller time frames of the volatile stock index futures markets. Ultimately, he found success with his own, highly original analysis methods, which he now teaches in a live, ten-session webinar.

When the Chicago Mercantile Exchange launched the S&P 500 E-mini in 1997, non-professionals were offered an opportunity to trade on an even footing with professional traders. A veritable boom of E-mini stock index trading worldwide, demonstrates the CME's experiment was a smashing success.

It's easy to see why E-mini trading has become so popular among day traders. First, there are the much lower margins associated with the smaller contract sizes. Also, because trades are executed entirely electronically, there are no market makers or floor brokers. And, unlike commodities or standard futures, there is virtually no chance of manipulation, insider trading or any of the other problems that occasionally affect other financial markets. But along with its many advantages and abundant opportunities, E-mini trading brings an entirely new set of challenges and potential pitfalls that can bedevil the best laid plans.

Due to extreme leverage and the intense participation they receive, the stock index futures markets afford little time for traders to dwell on technical conditions. Intraday volatility in the stock indices is far more exaggerated than that reflected in the daily bar charts of other markets. And positioning techniques that have proven reliable in anticipating the actions of long-term trends in other instruments, fail miserably when applied to the countertrend reactions of the highly leveraged S&P futures contract within the shorter, intraday time frames.

Author Will Scheier draws upon his decades of experience as a highly successful day trader and trading educator to provide you with:

• A framework of Day Models for making sense of the chaos of the day trading environment
• Codified, easy-to-adapt trade entry setups
• Trading techniques that are anything but mechanical scalping
• Technical Trade Event Models and their rules
• Tools for spotting major intraday swing trends at the instant they begin
• Fresh insights to Old School and floor trader concepts like the Open Range, Taylor 3-day Cycle and classic pattern breakout filtering
• Archived performance record of real-time trade calls

Engaging, informative, practical, this reliable resource will put you in a prime position to profit mightily in today's ever more volatile stock markets