johnpaulca
12,036 posts
msg #95001
- Ignore johnpaulca |
7/22/2010 9:53:57 PM
Clickable...
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ham1198
174 posts
msg #106695
- Ignore ham1198 |
6/19/2012 8:37:18 AM
saw this on trader's cove:
The ADX-PPO Pincher. To be fair, this TA setup was not developed by the Cove and we do not therefore take credit for it. However, we have found it to be an amazingly powerful TA setup toconsider when trying to find a good oversold stock to trade.
In total,the TA Pincher should be considered in conjunction with other TA/FA dynamics. I personally like the Pincher in Combo with the daily growth chart setup on the TA side and several key ratios in combination with Sector/Industry dynamics on the FA side.
1. ADX (14) crosses above the -DI line and continues to rise
2. RSI (14) drops below the 30 line while the PPO continues to fall
3.a. As the PPO falls thru the -20 while the ADX simultaneously rises above the 40, a “PINCH” is formed.
(This is the going in condition Set but the indicators do not have to occur in the order presented in the example to be valid)
3.b. The beginning of confirmation happens when the RSI rises up (back thru) the 30
4. 1st attempt to continue fails
5. 2nd attempt for the RSI thru 30
*6. Not part of the Pincher TA, but adapted by the Cove, the SAR is triggered, adding confirmation to the pending reversal
7. PPO crosses up thru the signal line and the mid-bollie (20MA) is breached = early BUY SIGNAL
8. Candle sits above mid-bollie and the PPO continues upward while the ADX continues downward
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Rock Sexton
111 posts
msg #106711
- Ignore Rock Sexton
modified |
6/21/2012 12:13:37 AM
As someone who's dedicated the vast majority of his trades to pinch plays over the last 3 years, I must assure you ..... the pinch play in most cases is just where shorts cover for some profit. Many times it's after a big sell climax. That is where the explosiveness of the bounce comes from. Every now and then there'll be one that is a rare V-shaped reversal. It also depends on the current trend and/or cycle the stock is when you get a pinch.
I'll tell you one thing though ..... most technical setups used to describe how to trade these are completely outdated. I ditched them over a year ago. I see a lot of people still just looking at the PPO/ADX lines and how tight they are thinking that it's time to enter and I just laugh. I merely look at those two lines just to confirm I'm looking at pinch, but never use them as a point of entry.
Nothing can substitute though for translating the price action WITH the volume on these plays (especially when you zero in on lower time intervals if you have a daily chart pinch), as well as identifying the proper candlesticks and supports on the charts.
I have well over 500 pages dedicated to discussing this particular setup. It really evolved for me a couple springs ago. Feel free to browse around if you'd like: http://www.hotstockmarket.com/t/72768/pinch-club-hosted-by-rock-sexton
The early part of that journal was all standard PPO, ADX, RSI blah blah blah crap. Try and scroll forward to March of 2011 and proceed from there. You'll get a whole new look at how to approach these.
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