Today I want to share with you one of the most accurate trading strategies. Nothing works 100% correct in market. But 70 – 80% is the high accuracy. The result depends more on how you manage your money. Using the same strategy, traders get different results.
But we will talk about money management
later. Let’s focus now on Oops strategy, that made me good money. Why oops? – Well, I didn’t name it. But I guess all because this strategy is based on how big boys use crowd emotions and psychology to trap them. Usually it happens as result of some ‘noise news’. Hence, if the market opens considerably lower or higher than yesterday’s range, it is an indication of retailers’ panic. This provides a great opportunity to big players to use the retailers’ emotions against them by placing a contrarian trade and earn profits. In a few words, it’s a gap trading strategy and gap is result of the opinion of the average crowd. Soon, retailers realize they made mistake… Oops!
As most of strategies I use, this one works for swing traders. I am not a big fan of day trading.
Its very easy to identify oops pattern in the chart:
1. The daily bar opens below the previous day’s low.
2. Or when the daily bar opens above the previous trading day’s high.
Here is how to buy opps trading strategy (opposite works for sell)
1. First I would like to pay your attention, that this pattern works for stocks and commodities. So, we look for instrument that have been in an upward trend but have experienced a recent pullback. Other words, oops strategy gives the best accuracy in accumulation phase, when big players are trying to wash out retailers. Very often, when institutions accumulate positions, they will pause, and even sell, for several days in order to shake out the small investors and avoid the price running away from them. No need to look for oops pattern if market is bouncing in the channel. It will not work simply.
2. During the last stage of the downtrend, the market needs to gap down way below yesterday’s low. This gives rise to the OOPS buy signal.
3. As reevaluation by investors happens, the price starts rising and crosses yesterday’s low and yesterday’s close. This generates the buy signal and a long trade should be initiated here.
4.The Stop-Loss is below the low of the same day.