The break down from a Narrow Range Bar Consolidation (NRBC) is one of the easiest trades to learn. As you can see below you just short the stock when it breaks down below a NRBC area.

Validation Parameters

• The stock should be flat or gapping down in premarket and appear weak.

  • Excessive gaps do not work, they usually pull up to fill the gap about halfway.

• 1 or 2 minute charting time frame.

• Indicators: 9 ema, 20 sma, VWAP, bunched close together above but near the current price.

  • All moving averages sloping down is best, increases odds, but not required.

  • 9 ema below the 20 sma or 9 ema crossing down through the 20 sma.

  • Price at or just below the 20 sma & VWAP.

• Consolidation: A fairly even and narrow consolidation area (NRBC).

• Volume: at least 80k per minute.

• Protective Stop: over the NRBC area.

• Entry: under the NRBC area.

• Profit Target:

  • 1st target is at least equal to the protective stop, and at the first stop in moment and/or at resistance such as a whole number, or a support area; sell 1/2 of your share size and move stop to even..

  • 2nd profit target is at the 9 ema or at the next green candle that pulls back more than halfway up the previous red candle; sell another 1/2 so you have 1/4 position remaining.

  • Move the protective stop loss down just over last NRBC break down area or over the 9 ema or over the 20 sma.

  • Adding Shares: You can double the number of shares you currently hold each time a red candle drops below a green candle at a NRBC point in the downtrend. So if you have 100 shares, you can add 100 shares, as long as the overall down trend remains stable below the 20 sma.

    • Keep your final stop over the 20 sma.

    • Do not add after 3 waves down or after a large quick surge down.