When looking to enter a position for a reasonable probability of success, we look to the Intra-Day Momentum Method Levels as a guide. We will discuss entering positions on both the long and short side of the market. First, we will point out the levels where the probability is greater. Then will point out levels where there tends to be an increased risk. When looking for an entry point, the pullback is usually a higher probability trade. Keep in mind that the strongest stocks do not pull back all that much. And the Intra-day reversals go through both levels and is the biggest risk.
As you can see from the historical results in the image above, our objective is to avoid the Intra-Day Reversal. By doing so, you can increase the probability of a close above the ML1 and below the MS1.
Long Positions
When looking to enter a LONG position, look for entry from the ML1 Level Up all the way back to just below the OPEN. The probability of a close above the ML1 diminishes the further away from the price that the market moves.
QQQ high probability entry.
SPY entry levels shaded in ‘Green’.
Short Positions
When looking to enter a SHORT position, look for entry from the MS1 Level Down all the way back to just above the OPEN. The probability of a close below the MS1 diminishes the further away from the price that the market moves.
