FOCUSING ON ONE SETUP

Gap-up Long Set-Up 

Watch closely the last 30 min before the open and make a solid plan on each ticker.

Answer questions on each of these

·         Daily Chart – What does look like? Uptrend, downtrend or consolidation?

·         Entry - Is it near support level?

·         Exit - Where the next resistance level and what is the range?

·         Indicators - What are Vwap and emas doing?

·     

Have two plans for each ticker as follows:

1.      Pops at the open

Wait for the price to pullback to a price support level/emas/vwap. Look for a bullish reversal candle or wicks or Hammer). 

2.      Sells off at the open

Wait for the price to settle down on a support level. Most likely the emas/vwap0 will be above price. So the set-up to look for is the “Bullish Hook Reversal” set-up and look for high low to enter.

Best entry should be a close above 9 and Vwap. But if it makes higher lows, enter on the second higher low for best r/r

Illustrations:

05/09/2016  - Gapper Scan on Trade Ideas came up with  HZNP.

Answer the questions - 

Daily Chart - This was in a downtrend so what is the next plan? Bias Long yes. (This is the only set-up you are focusing on) But look for next resistance point as your exit level. 

 

Zooming in on HZNP on daily chart. We draw the daily levels . As you can see from the image below, we have different resistance level and one support level where we would be interested in

Entry - Looking for an entry 14.25 and 14.50 level. 

Exit -  First exit.. would be at 15.30 level and next one 15.80 level and also 16.75. But all depends on price action i.e.. is it showing strength and do you see any reversal candles. "Let the winners run unless proven wrong"

Indicators - Ema's and Vwap were rising during pre-market, although near the open there was a bit of consolidation. But never the less they never showed any downtrend movement.Ideal you want you see them rising and price holding. 

Chart to use when trading will be both 2min and 5 min chart.  2 Min will be for timing entry and 5 Min will be for management.Why?  As you can see below. 5 min chart showed strength  but did not give an entry signal, but 2 min on the other hand had a pullback that offered an entry.

QIHU example on 0510/2016

 

3/31/2016 Trade Reviews

Today I was unprepared and came in and jumped in to a trade that was not even on my watchlist ( I did not have one as I got to the office 10 min after the market open) I should have sat on my hands and looked for the A set-ups. I have increased size to 1K under 10 stocks and 500 for 10 - 20 priced stocks. I am mad at myself and I hope I  learn from this.

Here are today's gappers that I should have prepared had I gotten in on time. There was JDST, LEU, GNCA and FIT

Below are my trades for today LEU

GNCA

Lessons
NO PLAN equal to NO TRADES
You get stopped out on a first try, keep an eye on the same stock and wait for the secondary set-up LEU

Example of Daily Process

This is an example of the daily process I will  be following.
1. Run gappers list from www.thestockmatketwatch.com.
2. Select top three stocks to watch at the open i.e in this example on 03/30/2016 I choose KERX, OPK and VRNT
 So the first thing I will do is put there three stocks on the 5 min montage and draw the daily levels. This  will be 45 min 20 min before the open.

Second part will come after the market open. I will wait for a clear set-up/ price action. No choppiness in price, solid candles. There one thing I have kind of noticed on the 5 min range. Most of the time if the price is trading above the higher part of the range and emas and vwap are below the price, it set-ups for a long and vice versa. I will explain that on another blog. In this case KERX looked less choppy and was trading on the lower part of the 5 min range and the ema's and vwap were on top. This was setting for an orb short pattern. . next  open the montage that has the 5 min and 2 min chart and watch both time frames closely but more so the 2 min for entry. Define my risk, and enter my trade and immediately put a mental stop and as soon as the price moves my way, enter a hard stop.

KERX was a good example as it showed both the first move and the secondary move. This I call vwap fade aka ema's sandwich.

Trading KERX using this process would have given potential $340. I will definitely use this process in the coming couple of months and test out the results and see if I make any progress.