Lecture Notes: Charting and Trading Strategies

Introduction

• Importance of live data in trading.
• Strategies and operations for charting.
• Identifying actionable signals on higher time frames.

Steps for Charting

1. Charting Order of Operations

   • Start with broad information.
   • Work from the highest time frame (e.g., 6 months) to lower ones.
   • Identify price targets on higher time frames.

2. Identify Actionable Signals

   • Example: A 212 signal on a 6-month chart.
   • Draw entry points to understand price movement.

3. Charting Time Frames

   • Start with larger time frames to understand bigger market trends.
   • Focus on quarters and months.
   • Use these analyses to guide individual stock trades.

Trading Strategies

• Stock and Sector Analysis

  • Find stocks mirroring sector signals for high probability setups.
  • Example: If XLK and Apple have similar patterns, expect aligned movements.

• Watch List Management

  • Maintain a watch list of key indices and sectors (e.g., Dow, NASDAQ, S&P).
  • Understand sectors to find individual stock plays.

Analyzing Sectors and ETFs

• Study sector performance to guide individual stock trading.
• Resource: Sector SPDR website for sector holdings.

Drawing Broad Information

• Definition: Shows price expansions between lows and highs.
• Techniques:
  • Draw from lower to higher lows and from higher to lower highs.
  • Use indicators to identify swing highs/lows.

Importance of Pivots

• Draw pivots as support/resistance levels.
• Use on yearly, quarterly, monthly time frames.
• Important for anticipating price rejections.

Practical Charting Example

• Steps:
  • Start with futures (e.g., CL1! for crude oil).
  • Use multiple screens to track different time frames.

Hybrid Time Frames

• Consider using non-standard time frames (e.g., 2-day, 3-day).
• Helps identify hidden actionable signals.

Tools and Resources

• Use TradingView features like object tree for organization.
• Sync charts using layout and crosshair tools in TradingView.

Back Testing and Practice

• Recommendations for paper trading and back testing strategies.
• Use of Robinhood and screenshots for tracking hypothetical trades.

Conclusion

• Importance of discipline and continuous learning in trading.
• Resources available for further education and questions.