What if you could identify a trending day and capitalize on winning moves before the day is over? This video explains a complete way to find ABC trades using price action and basic chart tools.
First, you have to think about what time the market opens. For the E-mini S&P 500, we consider that 9:30 a.m. US/Eastern. If you live in a different time zone, do the math to determine 9:30 a.m. New York time vs. your time and use that. The next 2.5 forms the A period. Therefore, 9:30 a.m. + 2 hours = 12:00 p.m. That’s where we draw vertical lines using the NinjaTrader chart tools. We then use a rectangle tool with transparency to encapsulate the highs and lows of the A period.
Now, as the chart begins to plot in the B period (after 12:00 p.m.), we wait for two consecutive closing candles to plot either above period A’s high or below period A’s low. If two closing bars occur above, that constitutes a Long (buy) ABC trade. Similarly, if two closing bars occur below, that constitutes a Short (sell) ABC trade.
Okay, continuing on with period B, note that period B is also 2.5 hours in duration. Remember the range you constructed for period A? The same idea applies here. Draw an additional vertical line at 2:30 p.m. US/Eastern (14:30 in NinjaTrader) or your time zone’s equivalent. After 2:30 p.m. US/Eastern, in period C, wait until two consecutive candles close above or below the high or low of period B. That constitutes the trading opportunities for period C.
For this ABC method, there are no trades taken in the A period. Sure, our other trading systems will plot signals during the A period, but we’re only focusing on the ABC method in this blog post. Click here for even more powerful trading methods you get learn today.