Tracking Fast Moving Industries

Markets do not move linearly. At different point in time, there will be pullbacks, breakouts and breakdown.

Every time, the market signal one of the 3 changes in movement, it represent an opportunity. When the trend changes, different industries within the market takes turn leading (either upwards or downwards). Some tends to be less volatile and may form a base for a breakout where fast.

It is at this point that we should be looking for the trades that provides the best returns potential.

What do you look for when the market pullback?

On the Ichimoku chart, we should be looking for :

  1. price level consolidating near a thick kumo support
  2. tenkan sen and kijun sen should flatten to show consolidation
  3. price level has tried to breakout but fail to do so and is now consolidating

Other points to note:

  1. Check the competitors within the same industry group?
  2. Who else has move and consolidate?
  3. Who is the leader?
  4. What are the news propelling it forward or downwards?

For traders, we want to remain nimble. An opportunity can be ‘LONG’, ‘SHORT’ or even a “SPREAD”.

Put the Risk Management as the central piece of all our trades, and decide on the position and direction that we want to make.