Oliver L Velez (2000) - Micro Trading Tactics

Pristine.com Presents This tutorial was originally titled “Micro Trading for a Living” and was recorded at the New York Online Trading Expo

Micro Trading Tactics With

Oliver L. Velez

Founder of Pristine.com, and Author of the best selling book, Tools and Tactics for the Master Day Trader Copyright 2000, Pristine Capital Holdings, Inc.

Basic Intro

Introduction

Basic Introduction

Types of Trading •Four Trading Styles: Core, Swing, Guerilla, Micro

•Two Trading Categories: Wealth & Income

The Four Trading Styles

Wealth Building •Core Trading – •Covers a holding period of weeks to months. •This style of trading is the new form of investing. •The Core Trader typically uses weekly charts, and attempts to capture the entire weekly trend. •Core Trading is best used on key stock indices (DIA, SPY, QQQ, HHH, etc.).

Core Trading Chart


Wealth Building •Swing Trading – •Covers a holding period of 2 to 5 trading days. •This style of trading capitalizes on a very overlooked market niche. •The Swing Trader typically uses daily charts and attempts to buy the dips and side step the declines. •Swing Trading can be used on anything that moves.

Swing Trading Chart


Income Producing •Guerilla Trading – •Covers a holding period of 1 to 2 trading days. •This style of “hit and run” trading capitalizes on reliable overnight trading patterns. •The Guerilla Trader typically uses daily and hourly charts and buys/sells late day strength/weakness. •Guerilla Trading can be used on all vehicles.

Guerilla Trading Chart


Income Producing •Micro Trading – •Covers a holding period of seconds to hours. •This style of active trading goes after small but frequent bite-sized gains. •The Micro Trader typically uses 5- & 15-minute charts and buys/sells dips/rallies, BO/BD. •Micro Trading can be used on all active stocks.

Micro Trading Charts

Micro Trading Tools

Tools of the Micro Trade •Charting Tools: 15 & 5-min charts, 20 and 200 period moving averages •Market Timing Tools: Nasdaq & S&P Futures, NYSE and Nasdaq TICKs, NYSE & Nasdaq TRINs

Charting Tools

Micro Charting Tools

5-Minute Chart

Pristine Capital Holdings, Inc.

15-Minute Chart

The Power of the 20 & 200 MAs

Pristine Capital Holdings, Inc.

Market Timing Tools

Micro Market Timing Tools

S&P and Nasdaq Futures Charts

NYSE & Nasdaq TICK

NYSE & Nasdaq TRIN

3 Micro Trading Phases

The 3 Micro Trading Phases of the Day 1) Phase 1 - 9:30 to 11:15 (Trade BO/ Reversals) 2) Phase 2 - 11:15 to 2:15 (Mid-day Doldrums) 3) Phase 3 - 2:15 to 4:00 (Trade B/O Reversals)

The 3 Phases of the Trading Day



Reversal Times

The 9 Micro Trading Reversal Times Phase 1 Reversal Times - 9:35 10:00, 10:30, 11:15 Phase 2 Reversal Times – 12 & 1:30 Phase 3 Reversal Times - 2:30, 3:00, 3:30

Major Reversal Times



Micro Trading Phase 1

Phase 1 Trading Tactics 1) The 9:30 Breakout/Breakdown Play 2) The 10:00 Reversal Play 3) Pristine’s 30-Minute Rule 4) The 11:00 Topping/Bottoming Play 5) The 200 Moving Average Play

9:35 BD and a 10:00 Bottom

9:35 BD, 10:00 Bottom, 11:00 Top

9:35 BD, 10:00 Bottom, 11:00 Top

9:35 BD, 10:00 Bottom, 11:00 Top

9:35 BD, 10:00 Bottom, 11:00 Top

9:35 BD, 10:00 Bottom, 11:00 Top

30-Min Buy, 11:00 Top

30-Min Buy, 11:00 Top

10:00 Top, 10:30 Reversal

200 MA Play at 10:30 Reversal


Phase 2 Trading Tactics 1) The 11:00 – 11:15 Topping/Bottoming Play 2) The Good Lunch Play 3) The 15-minute Trading Dip Play 4) The 1:30 Reversal Play

11:00 – 11:15 Topping Play

11:00 – 11:15 Topping Play

The 1:30 Reversal Play

The 15-Minute Trading Dip

1:30 Rev & 15-Minute Dip

11:00 Top and 1:30 Dip


Phase 3 Trading Tactics 1) The 3:00 Topping/Bottoming Play 2) 200 Moving Average Play 3) The Late Day Breakout/down Play

3:00 Topping Play

3:00 Topping Play at 200 MA

The Late Day Breakout (LDB) The Simple Art Of Trading® Part I

Late Day Breakout Criteria 1) Stock is up on the day

PEOPLESOFT INC (PSFT) 5 -M i n u t e C h a r t

Note that the Pristine Day Trader buys P S F T on the break of the most recent series of equal highs, not on the break of the high of the day.

High of the Day

2) Stock is above its opening price 3) Stocks is trading at or near the high of the day 4) Stock breaks out late in the day (anytime after 2:30 EST).

2 1

Our initial protective stop (1) is tight as it is, but the astute Pristine Day Trader knows how and when to quickly raise it to make it even tighter (2).

C h a r t C o u r t e s y o f w w w . E x e c u t i o n e r .c om

N o t e h o w P S F T’ s b r e a k o u t o c c u r r e d on Above Average Volume.

P r i s t i n e C a p i t a l H o l d i n g s, I n c . 7 - 1 1 S o u t h B r o a d w a y , S u i t e 2 1 0 , W h i t e P l a i n s , N Y 1 0 6 0 1 T e l : ( 9 1 4 ) 6 8 2 -7 6 1 3 F a x : ( 9 1 4 ) 6 8 2-7 6 4 0 W e b : w w w . p r i s t i n e . c o m E - mail: e d i t o r s @ p r i s t i n e . c o m


Late Day Breakout Criteria

BIOMET INC (BMET) 5-Minute Chart

The Pristine Day Trader buys new high.

1) Stock is up on the day Stop

2) Stock is above its opening price

Note this near perfect Pristine B u y setup.

3) Stocks is trading at or near the high of the day 4) Stock breaks out late in the day (anytime after 2:30 EST).

Chart Courtesy of www.Executioner.com

Pristine Capital Holdings, Inc. 7-11 South Broadway, Suite 210, White Plains, NY 10601 T e l : ( 9 1 4 ) 6 8 2 - 7 6 1 3 F a x : ( 9 1 4 ) 6 8 2-7 6 4 0 W e b : w w w . p r i s t i n e . c o m E -m a i l : e d i t o r s @ p r i s t i n e . c o m


Late Day Breakout Criteria

STAPLES INC (SPLS) 5-Minute Chart T h e L a t e D a y B r e a ko u t ( L D B ) t o a n e w d a i l y high offers the Pristine Day Trader an excellent m i c r o -t r a d i n g o p p o r t u n i t y , a s w e l l a s a s t r o n g overnight trading possibility.

1) Stock is up on the day 2) Stock is above its opening price 3) Stocks is trading at or near the high of the day 4) Stock breaks out late in the day (anytime after 2:30 EST).

C h a r t C o u r t e s y o f w w w . E x e c u t i o n e r . c om

Pristine Capital Holdings, Inc. 7-11 South Broadway, Suite 210, White Plains, NY 10601 T e l : ( 9 1 4 ) 6 8 2 - 7 6 1 3 F a x : ( 9 1 4 ) 6 8 2-7 6 4 0 W e b : w w w . p r i s t i n e . c o m E -m a i l : e d i t o r s @ p r i s t i n e . c o m

The Late Day Breakout (LDB) Late Day Breakout Criteria 1) Stock is up on the day 2) Stock is above its opening price 3) Stocks is trading at or near the high of the day 4) Stock breaks out late in the day (anytime after 2:30 EST).

The Late Day Breakout (LDB) Late Day Breakout Criteria 1) Stock is up on the day 2) Stock is above its opening price 3) Stocks is trading at or near the high of the day 4) Stock breaks out late in the day (anytime after 2:30 EST).

Tools & Tactics – A Must Read A Japanese proverb says, “If you wish to know the road, inquire of those who have traveled it.” The authors of Tools and Tactics for the Master Trader clearly know the road. Their unique insights, trading tactics and powerful tools, so enjoyably presented, make this a book that belongs on every trader’s shelf. Steve Nison, CMT - Author of Japanese Candlestick Charting Techniques

Oliver L Velez (2000) - Micro Trading Tactics

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