Wide Range Reversal Climax on Intraday Charts January 25,2020 Linda Raschke Linda Bradford Raschke, LBRGroup, LindaRaschke.net Risk Disclosure Futures’ trading contains substantial risk and is not for every investor. Risk capital used to trade Futures is money that can be lost without jeopardizing one's financial security. PAST RESULTS ARE NOT NECESSARITLY INIDCATIVE OF FUTURE RESULTS WHEN PAST PERFORMANCE IS MENTIONED. The contents of this webinar provided, displayed or conveyed in this presentation is not intended to guarantee success or positive results using this material and information. Linda Raschke is not responsible for the accuracy of this material in this presentation and it is only the opinion and trading strategies used or acquired by Linda Raschke. This is presentation is demonstrated using historic data and PowerPoint slides. This may be considered a solicitation for business. There are no claims or use of trade history or P&L from past performances used in this webinar. Copyright Notices This presentation is copyrighted: © 1996 – 2020 LBRGroup / Linda Raschke All Rights Reserved. Certain chart images are copyrighted © CQG Certain chart images are copyrighted © TradeStation Certain chart images are copyrighted © PhotonTrader Linda Raschke President, LBRGroup, LindaRaschke.net Linda Raschke is a professional trader with over 39 full-time years trading futures, equities and options in numerous global markets. She started as a market maker in equity options with memberships on the Pacific Coast Stock Exchange and the Philadelphia Stock Exchange. Her unique, self-developed strategies served as the core program for 24 years of successful money management. Her hedge fund was ranked 17th out of 4500 for best five-year performance by BarclayHedge. She was recognized in Jack D. Schwager's book, The New Market Wizards: Conversations with America's Top Traders. She recently released her own book, Trading Sardines: Lessons in the Markets from a LifeLong Traders, (available only on her website LindaRaschke.net) Original Wide Range Reversal Model on for Daily data. 1) Bar makes the widest range of the past 4 days. 2) In the case of a down trend, the HIGH of the bar must be taken out either the next 1 or 2 days. 3) This creates a “v” spike 4) The initial low is the most recent swing low. 5) Trail a stop up – the lowest low of the last 7 bars till stopped out. This is a model, not a mechanical system, but it did prove to be profitable year after year on a basket of 16 futures markets. Examples of Wide Range Reversals on Crude: The best trades occur at the Keltner Channel boundaries. The higher the time frame, the lower the frequency of occurrence. Wide Range Reversal Buy or Sell = Widest Range of the last 4 days which takes out its low or high within 1 or 2 days creating a “V”. We are fading price extremes in a trading range. Price is always our main indicator Keltner channels are an ATR function. The majority of my price patterns that have stood the test of time are based on ATR functions (average true range) or other range functions as opposed to oscillators. Indicators may or may not help with confidence levels. Volume may or may not add any significant information. Indicator Settings: Keltner channels: 20 EMA with 2.5 ATR bands. You may or may not find an oscillator useful. Often an oscillator will appear to be making new momentum highs or lows at extremes of a swing. The real trap is in looking for flags or continuation patterns when there has been a strong price rejection spike. Volume can draw the eye to a wide range bar as there is usually an increase in volume. It does not have to be climax volume though. Stay at least one time frame above the noise. Look for the traps or mini climaxes to happen on 30, 60, 120 or 240. Don’t make countertrend trades when there is no overhead supply or support levels below. Context is everything. Use two time frames. The higher one should show support or resistance level. Place initial stop on the lower time frame above first reversal bar. Initial target = last pivot point. You can use CLOSE outside of Keltner Channels or a spike through them where the bar has above average range. Wait for a reversal bar. Enter at the pivot on the WRR bar. Stop goes on the other side of the reversal bar. These trades are easiest to enter via buy or sell stop that pulls you in. Don’t wait for a retracement after a WRR point is hit – the good ones wont give one. The initial trade location will feel terrible! Thus, look to scale out of half to lower your basis. This will allow you to stay with the higher time frame for a longer period of time and not get jiggled out on noise. You must develop your own process for trade management. Different techniques work for different people given their psychological makeup. Resistance shows on higher time frame. The green line on the 240 shows where the trade was taken. The trigger was on the 120 minute. Though it looks like the 240 minute was in a strong downtrend, the daily charts had higher lows and this was a retracement into a pocket area, providing strong support. Pivot! pivot Here is an example of a legitimate signal on the 30 minute chart where there was no higher time frame resistance. The context did not support making a trade at this level, even though the trader could have scalped a few ticks. This is not a scalping pattern. This was an interesting case where the wide range bar closed right at the Keltner Channel. The entry was at the low of that WR bar. Note: you did not get a second chance to enter at the sell stop trigger. The BUY at the lower Keltner could have been taken when price came above the high. The short trade only had good context after the trap was made. Buy on the right side fit the criteria since the price does not have to close below Keltner. High of WR was taken out. Context on the sell at the top was marginal since the daily chart was making highs and there was not resistance at the time. The Buy setup at the bottom was very clean. Context on 60 minute GC Buy showed buying in support area. It led to marginal results though. You can see the WRR in the middle of the chart. Up to you to see if those work for you or not. CD off report number this AM…early rally was into well defined resistance level. Maybe one out of 20 trades gives a reaction like this! Opposite of the previous chart example. Stay at least one time frame above the noise. All Technical trading looks easy in hindsight when we can see what has happened. As the price patterns unfold, though, there is lots of uncertainty. With any new idea, you must study it and make it your own. Don’t take someone else’s word for it. Examine the frequency of occurrence. Come up with your own trade management style and stick with it. You must have a consistent approach in order to build up confidence. There are no right or wrong parameters. You can try different settings on Keltner channels. But the range on a wide range bar is black and white. This is an easy pattern to program into programs like Trade Station to give an alert. Have a Trading Buddy! Here are my trading buddies! P and Kyle - a seasoned veteran of our team! Join our extended trading family starting March1! 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