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The core setup involves three key steps:
1. Breakout Through the Roadmap Line: We look for price to break above the roadmap line, signaling the potential start of a new uptrend.
2. Retest of the Roadmap Line: After breaking through, price often pulls back to retest the roadmap line — confirming support and building the foundation for the next move.
3. Continuation Pattern: The ideal pattern is a three-wave move, where price consolidates, creates higher highs and higher lows, and sets up for a stronger trend.
We’ll go more in-depth into wave patterns tomorrow!
This method works across different time frames, but I primarily use it on the daily chart for building reliable watchlists.
Each week, I scan for stocks that meet specific criteria:
| | • | | Weekly Uptrend: The 8-day exponential moving average (EMA) must be above the 34-day EMA on the weekly chart. This ensures we’re focusing on stocks already moving in the right direction. | | | • | | Daily Pullback: The 8-day EMA needs to be below the 34-day EMA on the daily chart, indicating a retracement within the larger uptrend. |
I like to filter by options volume, narrowing down the list to stocks within the top 400 by options activity. This ensures we’re looking at liquid names with strong market interest.
After creating the initial list, the real work begins — filtering out the noise and isolating the best opportunities.
Which Signals Make for Actionable Trade Ideas?
I focus on stocks that have clearly broken above the roadmap line, retested it, and are positioned for a continuation move. Stocks that show sideways action, inconsistent trends or fail to align with the roadmap’s principles are excluded.
Once the watchlist is finalized, I define specific entry points, targets and stop-loss levels for each stock. This ensures that every trade has a clear plan before execution.
Conservative traders can wait for confirmed moves through key levels, while aggressive traders might choose earlier entries with tighter risk management.
What makes the Market Roadmap so powerful is its repeatability — this isn’t just theory. Patterns like three-wave moves, Fibonacci retracements (see these retracement levels in the chart below) and consolidations around the roadmap line occur consistently across markets and time frames. | | | | |
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