How many times have you seen this chart?

Everyday this market gives us the same cards over an over, the best way to benefit from this is pattern recognition because a lot of the time these patterns are not just random and are not coincidence. The pattern i think is the most prevalent and most interesting is the gap up, consolidate sideways most of the mid day then break higher on a slightly upward sloping trend. Patience, patience and more patience is the key to these trades.




The chart on the left is of AUXL, she had FDA approval this morning sending here to gap territory. You can see how it opened at 30 traded to a round number 32, then sold back down to a round number 31. The average joe trader would have puked and moved on. If you had pattern recognition of this scenario you would have had more confidence to hold trade. The level II almost gives you no information, the information you need to focus on is technical levels, support/resistance. You can see if you were patient and held the PPS slowly moved back up to 32, eventually pushing through traded all the way to 33. You will begin to notice many charts like this, gap up/sell/trade up/ break highs/ sideways/ break high. AONE yesterday is an example of this also.