Aggressive Entry Techniques: The "Minesweeper A" and "Minesweeper B" Setups

While Joe DiNapoli is a strong advocate for disciplined, high-probability trading, he also recognizes that there are times when a more aggressive approach is warranted. For these situations, he has developed two specific entry techniques known as "Minesweeper A" and "Minesweeper B". These setups are designed to get the trader into a potential trend reversal at a very early stage, often before the new trend is clearly established. As the name implies, these are not for the faint of heart. They carry a higher risk than DiNapoli's more conservative setups, but they also offer the potential for a much greater reward.

The Rationale for Aggressive Entries

The primary motivation for using an aggressive entry technique is to capture the very beginning of a new trend. By getting in early, the trader can achieve a highly favorable risk/reward ratio, as the stop-loss can be placed very close to the entry point. These setups are typically employed after a market has made a significant move and is showing signs of exhaustion. The Minesweeper setups are an attempt to "fade" the prevailing trend, which is an inherently risky proposition. However, when they work, they can lead to some of the most profitable trades in a trader's portfolio.

The "Minesweeper A" Setup

The Minesweeper A setup is the more aggressive of the two. It is a pure pattern-based entry that does not require confirmation from any other indicator. The setup occurs after a strong trend, either up or down. In a downtrend, for example, the trader will be looking for a specific sequence of bars. The setup is triggered when a bar's high is lower than the previous bar's high, and its low is also lower than the previous bar's low. The entry is placed one tick above the high of this bar, with a stop-loss one tick below the low. The profit target is typically a DiNapoli retracement level of the preceding downswing.

This setup is essentially an attempt to pick the bottom of a trend. It is a high-risk trade, and it should only be attempted by experienced traders who are comfortable with a low win rate. The key to success with the Minesweeper A is to be disciplined with the stop-loss and to take profits quickly at the first sign of trouble.

The "Minesweeper B" Setup

The Minesweeper B setup is slightly more conservative than the Minesweeper A, as it requires a small degree of confirmation. It is also used after a strong trend, but it incorporates a 3-period moving average. In a downtrend, the trader will wait for the price to close above the 3-period moving average. The entry is then placed one tick above the high of the bar that closed above the moving average, with a stop-loss one tick below the low of that same bar. The profit target is, again, a DiNapoli retracement level of the preceding downswing.

The Minesweeper B setup provides a small amount of confirmation that the trend may be turning, but it is still a very aggressive entry. It is designed to get the trader into the trade before the majority of market participants have recognized the potential reversal. Like the Minesweeper A, it requires strict risk management and a willingness to accept a high number of small losses.

Market Conditions for Minesweeper Setups

These aggressive entry techniques are not to be used in all market conditions. They are best suited for markets that have made a parabolic move and are showing signs of exhaustion. They are also more effective at key DiNapoli support or resistance levels. A Minesweeper setup that occurs at a 61.8% retracement level of a major swing is much more likely to be successful than one that occurs in the middle of a trading range.

In conclusion, the Minesweeper A and B setups are valuable tools in the DiNapoli trader's arsenal, but they must be used with extreme caution. They are not for beginners, and they require a high degree of skill and experience to trade effectively. However, for the trader who is willing to accept the risk, they can provide an opportunity to enter a new trend at the very beginning, leading to exceptional profits.