In this chapter, I’ll review my favorite day-trading patterns and give chart examples throughout. As you trade more, you’ll quickly develop “favorites,” too—they might look like these, or they might be different. Keep track so you can revisit them over the course of your trading.
■ The Intraday Rising Parallel Channel with High Relative Volume
During the course of my 45-plus years’ trading experience, I’ve noticed many patterns that develop during a single session, but the one that appears to be the best is the intraday rising channel. This usually starts with an opening gap or price thrust and ideally moves into an early bull consolidation ending with a low-volume, narrow range before extending in a rising channel.
■ The Best Day-Trade Pattern
An intraday rising channel up allows for staying in a day trade to milk the trend for the longest possible time frame intraday, resulting in the largest possible session-long profitable day-trade gain. It’s close to a parallel rising intraday channel trend that ideally stays in the pattern all session at approximately a 45-degree angle of ascent without violating key intraday channel and/or intraday moving average and price support during the entire session. It is truly amazing to me that the vast majority of intraday rising channels extend upward at or near a 45-degree angle during the session. I’ve observed this for decades. This also applies to longer time frames such as daily chart patterns, ...