We all know about Tim's morning dip buys setup, but sometimes it's hard to pinpoint the exact entry, as Tim says, "you gotta cut loss quickly if it's not bouncing, buying into morning panic can be like catching a falling knife."
Sometimes we can use previous days' support/resistance as an entry landmark, but it doesn't always work.
I have stumbled upon a tool from Tradingview's many charting tools: POC
POC aka Point Of Control
You can google it for more information from others, so I'm not gonna repeat what's already widely available online.
How to use it:
1: there's only one single POC from each trading day, extend the POC of each day during a run up (multi green days)
2: when there's a panic, be it in the morning or afternoon, pay attention and see if the price bounces from any of the POCs
3: once the price touches a POC and reverses, take entry, and use the POC as risk
Click below link to see the chart and how it had played out with $TAIT, it worked almost perfect https://www.tradingview.com/x/jfzfWVWA/
Thank you. I’ll be trying this out. Another weapon for the arsenal. One observation, some of the mini reversals and fake outs on my way down did occur at other POC‘s . In hindsight, it’s easy to pick the bottom, but how do you know in real time that the fake out isn’t the bottom? Would you just be patient and wait to buy after the bounce starts?
@dougeaton I would only enter a long position only if it bounces off a POC, sometimes it can look choppy on 1 minute chart, I would switch to 2 minute or 3 minute chart to get a better picture. The bounces are usually pretty gradual as it has to absorb selling volume for at least couple of minutes. I would use the lowest candle's bottom wick as risk, usually 5% even for a volatile stock like $NBY on it's supanova day. I've noticed that the price doesn't normally bounces right off the bat, it wou
@dougeaton it would chop around the POC for about 3 to 5 % before deciding which way it will go next.
@dougeaton also, if you look closer to my $TAIT sample, the price went straight through some POCs, slowed down at some POC levels, but when it bounce, it bounces right away or chop around for a bit, it's pretty clear
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