Developing Low High / HOD rejection setups. 100+ charts examples and a thought process behind the trades.

Disclaimer: The example below is a setup I worked on during the first 6 months with the prop desk. It’s a pretty standard setup for all short sellers. The key point here is to wait till a stock stops making new higher highs and new higher lows, and instead, wait till a stock fails to take create a new higher high and to have an entry on a low high or in case of severe rejection — High Of the Day rejection works as a decent entry point as well.

I used the same framework used in Agile Project Management. Every week I would revise the setup with the new information I got from the preceding week. Cycle over cycle — you keep revising it over and over until there is enough information, or it’s time to move on to something else. Consider it to be nothing else but an example of the framework — you need to develop for yourself.

Check out another setup I was working on during these times: MATA — Moving Averages Technical Analysis Setup with 10+ chart examples

Invalidation:

• The moment a stock gets above and holds above the money box = The setup is invalidated. (it’s a special script we developed that was measuring an average % pop within the first hour if the setup is to work in our favor and revert to the mean)
• When there is no volume at the open, and suddenly it pumps in (100K candles and higher) — this is a different setup! GTFO