oliver velez - micro trading tactics

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

Micro Trading TacticsWith

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.

Pristine.com Presents

Introduction

Basic Intro

Types of Trading

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

•Two Trading Categories: Wealth & Income

Basic Introduction

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.).

The Four Trading Styles

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.

The Four Trading Styles

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.

The Four Trading Styles

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.

The Four Trading Styles

Micro Trading Charts

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

Micro Trading Tools

Micro

Charting Tools

Charting Tools

Pristine Capital Holdings, Inc.

5-Minute Chart

15-Minute Chart

Pristine Capital Holdings, Inc.

The Power of the 20 & 200 MAs

Micro

Market Timing Tools

Market Timing Tools

S&P and Nasdaq Futures Charts

NYSE & Nasdaq TICK

NYSE & Nasdaq TRIN

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)

3 Micro Trading Phases

The 3 Phases of the Trading Day

The 3 Phases of the Trading Day

The 3 Phases of the Trading Day

The 9 Micro Trading Reversal Times

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

Phase 3 Reversal Times - 2:30, 3:00, 3:30

Reversal Times

Major Reversal Times

Major Reversal Times

Major Reversal Times

Phase 1 Trading Tactics1) 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

Micro Trading Phase 1

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 Tactics1) 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

Micro Trading Phase 2

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 Tactics1) The 3:00 Topping/Bottoming Play

2) 200 Moving Average Play

3) The Late Day Breakout/down Play

Micro Trading Phase 3

3:00 Topping Play

3:00 Topping Play at 200 MA

The Late Day Breakout (LDB)

Prist ine Capital Hold ings, Inc. 7-11 South Broadway, Sui te 210 , Whi te P la ins , NY 10601 Tel: (914) 682 -7613 Fax: (914) 682-7 6 4 0 Web: www.pr is t ine .com E-mail: edi tors@prist ine.com

P E O P L E S O F T I N C ( P S F T ) The Simple Art Of Trading® Part I

Chart Courtesy o f www.Execut ioner .com

5 -M i n u t e C h a r t Note that the Pr is t ine Day Trader b u y s P S F T on the break of the most recent ser ies of equal highs, not on the break of the h igh of the day.

Note how P S F T’s breakout occurred on Above Average Volume.

High of the Day

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

1

2

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 latein the day (anytime after 2:30 EST).

The Late Day Breakout (LDB)

Prist ine Capi ta l Holdings, Inc. 7-11 South Broadway , Su i te 210 , Whi te P la ins , NY 10601 Tel: (914) 682 -7613 F a x : (914 ) 682-7 6 4 0 W e b : www.pr is t ine .com E -mail : ed i tors@pr is t ine .com

B I O M E T I N C ( B M E T ) The S imple Ar t Of Trad ing® Par t I

Chart Courte sy o f www.Execut ioner . com

5 - M i n u t e C h a r t

T h e P r i s t i n e D a y T r a d e r b u y s n e w high .

Note th is near perfect Pr is t ine B u y se tup .

S top

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 latein the day (anytime after 2:30 EST).

The Late Day Breakout (LDB)

Prist ine Capita l Hold ings , Inc. 7-11 South Broadway , Su i te 210 , Whi te P la ins , NY 10601 Tel: (914) 682 -7613 F a x : (914 ) 682-7 6 4 0 W e b : www.pr is t ine .com E -mail : ed i tors@pr is t ine .com

S T A P L E S I N C ( S P L S ) The S imple Ar t Of Trad ing® Par t I

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 . com

5 - M i n u t e C h a r t 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 h igh of fe rs the Pr i s t ine Day Trader an exce l len t m ic ro -t rading opportuni ty , as wel l a s a s t rong overnight t rading poss ib i l i ty .

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 latein 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 latein 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 latein 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