Stage Description

 Any stock in play with high volatility (increased or increasing ATR)

 Draw min/max ATR lines from previous day close and assess current consumption
 Selection checklist:
 Assess daily trend; determine gap direction and magnitude
 Assess 60-minute direction, range and trend (primary focus should be on the daily and
60-minute charts)
 No big wicks (high or low)
 Narrow ranges preferred
Selection  60-minute trend should align with daily trend
 Assess 15-minute trends and perform candlestick analysis
 Zoom out all the way on the 5-minute chart to help spot ranges
 Analyze smaller time frame price action and candlestick patterns
 Consider ATR, stop loss placement and target to determine what the resulting R
would be
 The daily and 60-minute charts should support the anticipated breakout on smaller
time frames (e.g. an uptrend on the 1-minute chart inside the middle of a third
consecutive 60-minute candle is probably not a good long entry).
 Middle of the previous range at the breakout point
 Other technical levels:
Stop options  VWAP
 Nearby moving average
 Middle of the first 1-minute candle (if entering during minute 2)
 High/low of the previous candle
 Wait for the perfect breakout pattern
 Ensure that the opening candle is no more than 33% of the 15-day ATR
 Any move up or down from a significant opening range
Entry  Wait for the second candle to move in the opposite direction first to assess the strength
of the buyers and sellers, then enter at the BO/BD
 The exception is if it sells off and then breaks the PMH, then take it in the first minute
(no need to wait for the first candle to close)
 Be keenly aware of the relationship to nearby moving averages
 If adding at a breakout, move the original or previous stop loss to half of the preceding
range
Adding  Retests of the top/bottom of the previous range often happen after a breakout
 After 3 consecutive 5-minute candles, there will generally be a pullback and a
continuation
 If the stock is strong, expect the price to either shoot up or retest the entry point after
the breakout
Harvest  First partial at 2R
 Partials at significant S/R levels
 When reaching the stop loss, check to see if the relationship to moving averages, VWAP
and S/R have changed
Exit  Depends on percentage of shares remaining after partials