Finding Repeatable Patterns

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After the close we discussed some plays from Stocks In Play yesterday. When we look at a stock we search for patterns. Patterns that repeat. Patterns that make sense to us. Patterns that we can work at to master.

So for these three stocks we are making risk/reward trades with the patterns we see. We have a full playbook of patterns that we can trade as intraday traders. And we decide which ones we will trade. Let’s discuss some patterns from just three stocks on one trading day.

1. Opening Range Play. In this example SMG gapped down but could not trade lower right on the open. Get long, stop below the low, and hold for an explosive upmove.

2. Intraday Support/Resistance Trade. SMG could not hold above a level, 36.50. It finally did so there is a long opportunity. It was too early in the trading day to find a trend. So you do the best you can with the upmove and sell when you spot weakness.

3. The Pullback Trade. One of the hardest trades to make. SMG is showing intraday strength. You buy into a pullback as best you can. And hold for a new intraday high. The key is holding for that new intraday high. Most traders cannot and dump too early.

4. Trend Trade. The stock starts to trade in one direction and you follow that trend.

5. Long term Technical Resistance Trade. In REGN 120 was an important long term technical level. REGN showed intraday weakness. It came back to this Technical Resistance Level. We short and hold for a bigger swing down move. The stop is above the technical level.

When we build a book of patterns for our PlayBook we must know which ones are our most favorite. This is an A+ setup. We put on more risk for our best trades.

6. Trend Trend Trade. The stock is in a longer term down trend. It is in an intraday downtrend. Follow that trend.

7. Second Day Play. We learned important levels trading KORS on the day it had earnings. We use those levels the next day to gain an edge. 40 was an important level we learned from Day One.

8. Swing Trend Trade. KORS is trending. We follow the trend until the next important technical support level, which in this case was 38.50.

See the patterns in your trades. Understand that mastering trading is not about predictions but about mastering the patterns that make the most sense to you.


One Good Trade

no relevant positions

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