Bear Trend Strategy
Last updated
Last updated
The strategy for trading a BEAR TREND session is identical to a BULL TREND.
We want to exit positions to runners around BL -3 and re-enter puts anywhere in the yellow area of the chart.
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That said BEAR TRENDS are much much more difficult to trade.
1.) Brains are wired for the bounce
The most common form of mean reversion is price trending down the entire session before bouncing to the blue line at the end.
Brains are wired for this, there will be many different attempts to look like it will bounce.
2.) BEAR TRENDS go much lower below the blue than BULL TRENDS go above.
SPY BL +5.00 or greater = 17 times
SPY BL -5.00 or lower = 29 times
That's a 70.59% increase!
Basically some sessions it will look super bearish at BL -3 and then they will rip us back to the blue or beyond
But in the sessions they don't do that... they will take price way beyond the red zone BL -5 or lower.
Note the chart outline is RED, so we expect mean reversion.
We expect a BEAR TREND when volume is over 120%.
In the first hour we're looking for a move to BL -3 and price has to stay down there.
This is important.
PRICE HAS TO STAY AT OR AROUND BL -3
Since the open is the most volatile part of the session, it's not unusual for price to go BL -3 and then bounce back to the blue line.
That's Wall Street killing late chasers.
PRICE MUST STAY AROUND BL -3 TO BE A BEAR TREND!
Price nukes to BL -3 around 10:10 but immediately rips straight up.
This is what you need to watch out for. Price will stay DOWN on a BEAR TREND day, never coming close to the blue.
We've seen this happen many times, so many in fact at the very moment we hit BL -3, you get a BULL BOMB with EDGE and a 77.78% win rate.
It goes on to return 422.97% in 3h 36s, before going negative. It was a crazy session.
BL -3 by 10:30
Price does not breakout and stays in the yellow (warning bear risk zone)
After 13:300 you get a mega nuke to the close before a small bounce
All of them return over 100%.
Let's look at SPY since 10/18/2023 (you can confirm this by checking the .)
is a good example of a fakeout then turbo pump... BL -3 to BL +3.
, there are a ton of BEAR BOMBS + KTR fills at that point.
