Stacey Burke's daily cycle setups

What it is

Stacey Burke teaches setups built around the daily cycle. Markets tend to run in one direction for about three days, then stall or turn. A First Red Day (FRD) is the first down day after a run of up days, and sets up shorts the next day; a First Green Day (FGD) is the mirror. A peak formation high or low (PFH, PFL) is the turning pattern at the end of a run. Inside days (a day inside the previous day's range) set up breakouts.

The setups lean on the average daily range and on the session highs and lows (Asia, London, New York) for entries. The material comes from his courses and videos; the pages describing it online are secondhand.

How to spot it

• Count the days in the current run.
• Mark the first opposite-coloured day after a run of three or so.

How to use it

• After a First Red Day, look for shorts the next day near the previous day's high or a session high.
• Use the average daily range to judge when a day's move is stretched.

Common mistakes

• Counting days without regard to the size of the moves.
• Treating the three-day cycle as fixed.

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