The 1-Minute Entry Confirmation Strategy
The Momentum System uses a very specific “rule” to know when to pull the trigger and enter a trade.
It’s one of the little “tricks” we use to avoid getting sucked into a false move in the market and it’s pretty basic. It’s actually one of the very first things new users should understand – so they know exactly when to place an order to trade an alert.
In the Alert software, it’s called the Entry Confirmation.
Here’s the Rule:
When you get an Alert, simply wait for the very next 1-minute price bar that CLOSES at least 1-tick PAST the Alert price.
That sounds pretty simple and straight-forward right?
Sometimes the very next 1-minute price bar closes past the Alert price – but more often a bit of time goes by before it triggers-in. Sometimes we see a bunch of 1-minute bars poke through the Alert price and then finally we see one close past the Alert / Trigger price. And other times there are a number of “pokes” through it, but the Alert never fills and the price starts moving in the opposite direction.
Today was a perfect textbook example of why this strategy works so well. Mostly because there was just one little 1-minute price bar that poked through the trigger level.
Here’s the 1-minute chart:
So you see at exactly 9:45 (eastern) that little spike-up bar that poked through the Trade Barrier but never closed over it. That was the proverbial “false move”. It wouldn’t surprise me if a lot of traders entered long around there as the price looked like it was breaking out to the upside and was hitting the high of the cash session.
But our little “entry confirmation” rule worked like a charm. Our users didn’t get faked-out there.
Instead as you see on the chart, the price reversed and moved down and the software triggered-in a Short at 4484.25, which was exactly 1-tick “past” the Alert price. Within a couple minutes the price hit Target 1 and went on to hit Target 2 not long after that. (The Targets are the blue lines on the chart).
So the software itself automatically knows when – and when not to confirm the “fill” on an Alert.
You can see in the System Notes here where it gave the Long Alert that never triggered-in. Then as the price rolled over and broke through the bottom of the Range, it gave a short Alert that triggered-in shortly thereafter.
This is where it printed the “Entry Confirmation” line in the software System Notes along with the time stamp.
Here’s the graphic example we use in the Alert Software documentation to reinforce the Entry Confirmation strategy:
So as you see, the “fill” on an order is extremely important. And our software uses that very specific rule – that helps prevent jumping in a trade prematurely. Actually this little trick is one of the first things we recommend new users learn.
After all, when you’re trading along with the Alerts you need to know exactly when – and when not to – pull the trigger on a trade.
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