Channel Guy Trader: Intraday Trading Relative Strength System Trade

Hello Traders, while getting ready for this weeks action I took a look at some trades I took this past week. I noticed that I have a good system that I trade in the a.m session, so I thought I bring it to your guys attention. Remember my fellow channelers you will have to make sure you are quick, not stubborn, scanning the market for opportunities, and reacting on them when you see them and moving on to the next one( I like to use my top 8 list stocks and then if those are doing nothing I scan ). Now this is nothing new, but is something I thought I bring to the attention of the people that follow me and are familiar with my style a bit. In any case, the two examples I have posted below are CHK and NFLX. The NFLX trade was a trade that I actually took on Friday morning and you can follow me on twitter as this positive trading scalp was tweeted out. So the market always has stocks that are going up when it's going down and vice versa. Well on days like Friday where we have some good selling pressure at the open, I look for stocks that are holding up well and are showing relative strength. Relative strength for the fact that when we are getting close to stabilizing or getting a bounce after the sell off , these stocks will be the first place fast player traders go to get a quick trade. So on the NFLX trade you should have noticed it was trading in a tight range and was slightly down, compared the the SPY which was selling off hard and had wide range. So the trade setup was to go long as soon as markets slows down on the selling and attempts a bounce. So that did happen on NFLX was a buy over the a.m highs. Notice how knowing the key reversal times like 10:30 - 11 am timeframe will also prepare you for getting ready for the trade to take shape. Around that time the markets started to stabalize and I noticed the buyers starting to comeback on the tape of NFLX. It's funny how they start showing you BS tape action for you to dump some of your shares cheap because thats what happened to me. However, if this does happen that does not mean to disregard the trade. You hone on it again and get back in once it gives you the opportunity as long as the risk to reward to your target is favorable. Now the CHK trade is one I found that actually showed relative strength on the intraday chart and on the daily chart action for the week. Seeing something like this automatically takes my mind to go look at the $natgas and the UNG channels that I have on my charts. Not a surprise when I saw them because they both look like they want to try and put another leg up. We will see how this plays out, but the whole point is CHK showed strength and provided an opportunity to trade the system within the first 2 hours. The system works the same if you are seeing a stock that is not moving higher with SPY strength in the a.m., but then starts to sell off around the key reversal time when the market is consolidating to go higher or starting a sell back down. Sorry If I confused you a bit on the explanation, but the charts below should give more insight.
NFLX


CHK