Original question: Can you walk through an example of how you decide to enter something quiet and tight and sitting on PLL or 10ma? Are you looking at 5min charts, level 2, large volume etc.? I noticed your entries seem to work right away and huge volume comes flying in. Maybe an example where you also got stopped out too.
Example #1: $ONEM
$ONEM went sideways on proper quiet & tight (#QTS) volume signature right after it found resistance at 44$ on december 23rd. However I dont engage with those early quiet and tight days as a proper #QTS is not a one day affair. It’s a multi day or even multi week shallow pullback into logical support (PLL or short term moving average). In almost all cases I wait for the 10d MA to catch up with price (Recall that I mention this a lot of Twitter). This was the case on december 30 & 31st. Both days had low volume (First 2 green arrows). The stop was hit when price dipped below the lower PLL zone which coincides with the 21d EMA here. Once price breached that level a drop into the next PLL was likely. Last friday price again turned tight on lower relative volume which triggered a follow up #QTS. This one isn’t textbook but is still a proper one as its a minor change in character after the 3 spin-out days before. The fact that the weekly bar closed unchanged in high volume is a sign of support. Moreover a shakeout is likely to happen at one point inside the handle area of a cup base.
While the #QTS is triggered via a one day signal, the overall pattern has more to it. To decide if a setup is a proper one always involves chart reading.
Example #2: $GRWG
$GRWG flashed two proper #QTS under the 10d MA since december 2020. The first one was into a sharp little PLL and the second one was at the 10d MA (but not above it). However, in this case both quiet and tight days came after a volatile week thus signaling that sellers are out of the way. Volume was extremely low in both cases! The day marked in orange was quiet & tight as well, but just like in $ONEM above, was still too far off the 10d MA and thus prone to failure. The PLL was a minor one as well (I wouldn’t even call this a PLL to be honest).
Example #3: $NNOX
$NNOX flashed a textbook #QTS in mid november 2020. Stock experienced a shallow sideways pullback into the monster PLL. Price and volume action then went extremely tight right when the 10d MA caught up with it. Two days later, BOOOM!
Example #4: $DADA
$DADA flashed two consecutive #QTS’s right after a big bullish volume clue which repaired the chart damage for me. However I actually got stopped out the day after my entry on this -8% drop. Stock never left the wider PLL zone and I simply had too much size on which forced me out via a stop loss eventually. This was obviously a badly executed trade (improper stop loss placement) and I made up for it by jumping back in two days later on a opportunisitc entry.
Example #5: $RKT
$RKT flashed a proper #QTS as price pulled back orderly into the short term MAs and upper PLL zone limit after flashing a couple bullish volume clues during the prior little rally. However the stock lost support and my stop loss got triggered more than a week later. I placed the stop loss below the PLL zone and therefore had to go with a small position size. This is something I often do when I enter stocks rather deep down inside their patterns. I just give em more room to move.
As you can see from the examples above. Each setup involves chart reading in order to figure out if the stock is in a favourable position to muster a rally. A quiet and tight setup is not a simple one day signal which gives you green light to plunge all in.