This was a beauty of a setup that occured after the requisite gyrations that occur after every fed announcement. Price initially shot up on the news, but couldn’t hold and crashed back down where it stalled for a little bit, right at the trendline before rolling over and collapsing for another 4.5 points.

Price halted at the 610-tick fractal and then took off higher for the rest of the day.

OK, so the TRIX had already rolled over on the 610-tick chart and it had stalled at the rising trendline. From here prices could either reverse and go back up or collapse and go down to complete the fractal.

Wel the big tip0ff came in the form of the 2-minute volume. When prices tried to rally off of the trendline, the up-volume was only 1/2 of the previous bar. This wasn’t the entry signal but when the low of the bar that closed below the trendline was taken out, all systems were a go.

Price dropped so quick that I didn’t have time to type in a new price in the order window. Instead I was scrambling in the Ninja Trader dome trying to click on the lowest price and adjust my target that way. 764.10-ish was what I wanted to set it to, but I got taken out of the play at 765.10 prematurely.

But regardless it was the type of solid, high probability play that doesn’t come around too often.
 
 

My mouth was literally salivating as I saw this play setting up. I entered my limit sell order and all I could do was wait and see if price would trigger it before reversing. To my delight, I got filled and within seconds had reached my Net Daily Goal for the day.

This would have been a play that I would have wanted to take regardless of the Flash Formation Fractal, but its presence just helped me target my entry even better.

There is this perception out there that fading a stock or security is much more risky than playing a breakout or pullback. But this simply is not true. When proplerly set up, a fade can offer you a high reward, low risk opportunity that you simply can’t get via any other method.

The reason for this is because you are entering precisely in the area where you are anticipating an imminent reversal. Thus, your stop can be placed very close to your entry. The play gives you a very clear signal when it is wrong, namely, that price doesn’t reverse soon and you can get out with a small loss. But when it works, the rewards can be much greater because you have entered BEFORE everyone else and can exit with a profit BEFORE they do as well.

Isn’t that the name of the game?