posted
First the credit of this concept goes to freto38 off ihub.... "do elaborate on the concept of a pincher play?"
No prob...I thought it was widely known..Let me try to explain :
A pincher occures when the Percentage Price Oscillator (PPO)and the Average Directional Index (ADX)(ppo/adx) curve in and pinch; hence the name "pincher play"
A key here is the Relative Strength Index (RSI) always look for a 30/30 cross and the 200ma crossover...BUY SIGNAL!
I am still learing about the pincher as well...so heres is some stuff about it off ihub.
REMEMBER - Always look for confirmations...don't just jump in with a couple of grand and get left holding the bag!!!!!!!!! Check for Volume, Volume, Volume, ALWAYS your RSI, and never trade with more than you can afford to lose!!!! I don't know how many times I have seen people put all of their eggs in one basket and LOSE IT ALL!!! INCLUDING MYSELF! Paper trade them please, at least until you get the hang of it. That goes with any type of DAY, SWING, ETC ETC ETC Trading styles!!!!!!!!
Ok, now that has been covered, there are THREE key indicators for this set up. The PPO, ADX, and RSI (using periods of 2 and 5).
Before you even think about anything else, the first thing you need is "the pinch", which is when the PPO Line and ADX Line (both labeled in chart beneath) pinch together. When this occurs (purple circle on chart), you start to look for an entry point...
Option 1 is for the traders with higher risk tolerances... meaning, they get "the pinch" but have no other 'confirmers'... this option is represented by the vertical yellow line below.
Option 2 is for traders who don't want to "walk the line" as much... this option is represented by the vertical pink line... as can be seen, this option requires the RSI(5) and RSI(2) to both have crossed 30 (in this example, the RSI(2) had already crossed, so we were just waiting for the RSI(5) to cross 30)...as can be seen below, the RSI(5) breaks 30 and its TIME TO BUY!!
Even if you would have waited to the last possible second at bought at Option 2's closing price ($6.77), you would have had the potential to make 36%...
** IMPORTANT ** These set-ups have heavy resistance at the Parabolic SAR and if they break the Parabolic SAR they usually get knocked down by the 20MA. In other words, look to take some profits around the 20MA.
Important Steps For Trading Pinchers
1.Study the ADX PPO pincher charts.
2. Find the major MA's 20,50,100,200
3. Find the RSI's and aways look for a 30/30 cross on these. It's a buy signal "for a ADX PPO pincher" to confirm this is a buy signal, look on a 15minute chart with a 200MA. It must cross the 200MA, so the 30/30 rsi's cross with conjuntion of a 15min. 200MA cross is the pincher buy!
NOTE: on subs below a penny, wait for Parabolic SAR or 20d break an hold as a buy signal..if they back off the Parabolic SAR sell note: if the RSI14 breaks 50 the PPS will more than likly go higher!
4. Find the Parabolic SAR. Iis it below or above the 20MA? If the Parabolic SAR is below the 20MA, buy as it crosses the Parabolic SAR and if it does not break and hold the 20MA, sell. If they back off the Parabolic SAR sell
5.It holds the 20MA, then its a turn chart and the 50MA will be up next. Sell if it backs off the 50MA.
6.If it holds the 50MA It will begin an uptrend most likely then your next resistance point is the 100MA. If it backs off 100MA sell.
7.If it holds the 100MA, up next is the 200MA. Sell if it backs off the 200MA.
8. If it holds the 200MA DO NOT let it fall below the 20MA and take some profit.
posted
if you mix in the 3d stochrsi (10)(20)(30) and look for the cci(48) to move above the -100 line that will give you a better confirmation.
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posted
Okay, I understand the concept, but I'm failing to see the pinch. Is it that the PPO and ADX get closer together? And if so, isn't it "pinching" from July 16th on?
Just trying to understand better. Thanks.
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posted
Yes...the ppo and adx get close together and form a pinch. but you have to find the right entry and exit that is the key with pinchers.
Find the RSI's and aways look for a 30/30 cross on these. It's a buy signal "for a ADX PPO pincher" to confirm this is a buy signal, look on a 15minute chart with a 200MA. It must cross the 200MA, so the 30/30 rsi's cross with conjuntion of a 15min. 200MA cross is the pincher buy! Read my post above. Let me know if you have any other questions
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posted
PPO Line(12,26,9) is less than or equal to -10 ADX Line(14) is greater than or equal to 40
Here is a stock chart scan (basic) for those who have the subscription.
pincher scan For the last market close: All Stocks with... Daily PPO Line(12,26,9) for today is less than or equal to -10 Daily ADX Line(14) for today is greater than or equal to 40
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quote:Originally posted by PCola77: And if so, isn't it "pinching" from July 16th on?
Cap'ns right...The pincher starts getting really serious in November... You have to look for the signs to enter and exit though...
Like I said I am still learning too...I really think we can make some great money off the "P.P.P." thoery...GL! If anyone wants to post their scans..please do!
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posted
Why wouldn't the initial trigger have been on 8/7 on the first chart? I see the PPO is less than -10 and the ADX is greater than 40. What changes on the 12th to cause the yellow line?
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quote:Originally posted by PCola77: Why wouldn't the initial trigger have been on 8/7 on the first chart? I see the PPO is less than -10 and the ADX is greater than 40. What changes on the 12th to cause the yellow line?
Look at the RSI cross the 30...I mean sure you could have gotten in on 8/7 it just depends how risky you want to be. There also is a possiblity it will not follow through....Thats why I wait for the signals.
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posted
Still not seeing how "Option 1" is triggered, but I'll stick to "option 2" for now. When I have some free time I'll program this into my backtester and see if it produces good results historically.
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posted
Click the first little mini chart you had...SO ITS FULLY EXPANDED RIGHT CLICK GO TO PROPERTIES HIGHLIGHT FULL URL AND COPY PASTE ON BOARD PUT THE FULL URL IN BETWEEN THESE TWO. [IMG] [/IMG] GOOD LUCK! LOL.
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