Lower High

Lower High or Murder Trade

Shorting a lower high off the open should be in everyone's trade book. It's a low risk, high reward trade.

Validation Parameters

  1. Market & Stock gaping up or down is OK.

  2. Looking for a lower high after the first move.

  3. First lower high is usually best scalped if it starts to pull back from the previous low because you don't know if it's a trend reversal.

    1. On a first lower high I normally cover 50% share size at the first pause or stall at or below the previous low. I then add on the second lower higher or right side of the "M".

  4. Second lower high confirms the trend is down, now you can ride the trend down.

    1. Indicators: 9 ema, 20 sma, VWAP, near or slightly above your entry point.

    2. Entry: under the inside top of the second part of "M".

  5. Target: Expect at least twice the depth of the "n" or "M".

    1. Target 1: sell 1/2 position at twice the depth of the "n" or "M".

    2. Target 2: sell 1/2 position again, over the 9 ema or on a large spike down or at whole number.

    3. Close Trade: the last 1/4 of your position closed out over the 20 sma.