Trading retracements off the Dow, NQ (although I traded the ES instead of the NQ), USDJPY, and EURUSD as I anticipated yesterday afternoon.  As I said yesterday the ADX indicated the markets were either overbought or oversold off the massive moves created by the ECB press conference and reports yesterday.  This indicated retracements were likely to occur.

Trading Retracements Criteria

  • Higher timeframe makes an ADX magenta peak
  • Look at color of ADX line
  • ATR on lower timeframe must be the opposite color (ie if the ADX line is red, the ATR on lower timeframe must be blue)
  • Price must retest the ATR indicator (preferably on lower volume)

Although we could use the lower timeframes, the risk was minimal on the 45 minute so I opted to go with them.  I anticipated retracements to the ATR from the 45 minute charts.  They all came in and then some.  (Click to enlarge chart)

ADX Magenta Peaks on IndicesDow:

Long @ 17487; exit at 17528

NQ:

Long @ 4608; exit at 4617.25

USDJPY RetracementUSDJPY:

Long @ 122.49 with exit at 122.75

EURUSD

EURUSD

Short 1.0946; exit at 1.0932

Then this morning at 6am another retracement came in on the EURUSD.

EURUSD Long Retracement

Long @ 1.0880 and exit at 1.0922

As you can see the strategies worked as expected and highlighted the entries on both the higher timeframes and lower timeframes.  Using the criteria for trading retracements, we simply confirm that price is moving as we anticipate on the lower timeframe.

The THD Strategies automatically highlight the entries for you.  The ATR strategy also identify the profit target and has two built-in stops.  One stop is based on the ATR stop indicator and the second stop kicks in once a minimum profit target has been achieved.  Then the stop follows price closer to get more profits.

The THD Strategies will be available soon on a subscription only basis (either quarterly or annually) for clients that have the indicators.  Of course with our new subscription service, clients will always have the latest indicators, online training courses, and access to a weekly webinar on Mondays from 10am till noon.