Scalping The Trend-Set up and Rules

Hidden divergence (HD): This setup is a trend continuation trade. If the Trend Direction indicator has remained one color even through retraces, that is an indication of a trend and that is the time to be looking for Hidden Divergence. The setup happens during a pullback when the volume in the current pullback exceeds the previous pullback volume but price action has not reached the level of the previous pullback. The Hidden Divergence setup will occur only on pullbacks that go against the Trend Direction indicator. The trade itself is then taken with the trend which is matching the Trend Direction indicator. There must be an HD indicator on the last bar before the reversal in order to have a valid setup. If the HD indicator appears on a few bars in the middle of a “run” then stops printing, this is not a valid setup and means we are no longer in a state of hidden divergence. It can appear on any number of bars before the reversal bar, but it must still plot on the bar before the reversal bar.

**TREND DIRECTION WITH APEX PATTERN** Only trade in the direction of the Trend Direction Indicator.
The Apex Pattern is:
A= Alert (Most recent high or low that meets the pattern requirements.)
P= Pivot
E= Entry
X= Complete (Once the market has passed the level of the “A” bar.)
When the price action does not move far enough for the pattern to fully complete and the X does not print before a new pattern begins, the P and E turn “old” with smaller letters that are a gold color to let us know there was a pattern there that just did not complete before another started. The lighter-colored green letters appear when the pattern has just flipped from red to green. The lighter-colored red letters appear when the pattern has just flipped to red after being green. The flip happens all at one time, so it is not tradeable. We only trade the darker-colored P’s.
This is a strategy that trades with the trend. The Trend Direction indicator determines the overall trend. When there is a pullback of at least 2 bars and a matching-colored P appears on the reversal bar, the trade is entered 3 ticks after the close of the P bar. The bar range shows where the reversal bar will close in either direction, use it to locate where to place your entry. Entry goes 3 ticks beyond the bar range. Note: If watching the reversal bar form in real time, the P will be on the previously closed bar, not on the live forming bar. It moves only after a bar closes.
We only look for green Apex P when the Trend Direction is green.

We only look for red Apex P when Trend Direction is red. We do not trade opposing colors.

_Do not take trades going “into” major levels without having at least room for a 10-tick scalp between the entry and the level. If the market has already gone “into” that level and bounced off and this is the second attempt into the level, the entry can be taken unless it is at settlement. Always be careful trading around settlement. Trades bouncing “off” a level are okay, just be aware of going “into” levels._

**TREND DIRECTION CLUSTER RETRACES**
This is a strategy that trades “with the trend.” The Trend Direction indicator determines the overall trend. When there is a pullback of at least 2 bars and a Cluster appears on the reversal bar that goes back in the direction of the Trend Direction Indicator, enter 3 ticks after the close of the clustered reversal bar.

CLUSTER CAN BE ON THE BAR BEFORE THE REVERSAL BAR:

BRINGING IT ALL TOGETHER- THE ALL NEW POWER PLAY #3 TRADE:
Now that all the separate set up rules are understood, let’s combine them. We need two out the three to take a trade entry. Just one of the scenarios by themselves are NOT enough to take a trade. We need at least two out of the 3:
1. Cluster on the reversal bar or bar before the reversal bar
2. Apex Pattern P that matches the color of the Vol Trend Direction Indicator
3. Hidden Divergence “HD” on the bar before the reversal bar
4. ALL RETRACES MUST BE A MINIMUM of at least two bars.
5. Only trade in the direction of the Vol Trend Direction Indicator
6. Entry is 3 ticks above or below the close of the set up bar
7. Initial stop is 1 tick above or below the reversal / set up bar