{"id":50327,"date":"2020-12-01T08:40:32","date_gmt":"2020-12-01T13:40:32","guid":{"rendered":"https:\/\/www.smbtraining.com\/blog\/?p=50327"},"modified":"2020-11-30T22:41:20","modified_gmt":"2020-12-01T03:41:20","slug":"a-popular-trading-strategy-in-a-strong-market-for-you","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-popular-trading-strategy-in-a-strong-market-for-you","title":{"rendered":"A Popular Trading Strategy in a Strong Market (for you)"},"content":{"rendered":"

In this video, we discuss a popular trading strategy in a strong market. Two SMB traders and Mike Bellafiore review tape in Target for this Dip and Rip trade setup. Let\u2019s get to work on sharing these important trading setups so you can grow your trading account.<\/p>\nView Video Transcript<\/strong><\/span>

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today we’ll be showing a dip and rip set<\/div>\n<\/div>\n<\/div>\n
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up<\/div>\n<\/div>\n<\/div>\n
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from target on 11 18<\/div>\n<\/div>\n<\/div>\n
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after they reported earnings<\/div>\n<\/div>\n<\/div>\n
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[Music]<\/div>\n<\/div>\n<\/div>\n
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um the earnings report was much more<\/div>\n<\/div>\n<\/div>\n
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positive than expected they beps<\/div>\n<\/div>\n<\/div>\n
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by a dollar and beat on revenue<\/div>\n<\/div>\n<\/div>\n
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um comparable sales were up<\/div>\n<\/div>\n<\/div>\n
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20 above the estimates and<\/div>\n<\/div>\n<\/div>\n
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gross margins rose uh 80 basis points so<\/div>\n<\/div>\n<\/div>\n
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a lot of positives for this they were<\/div>\n<\/div>\n<\/div>\n
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talking about how they’re online<\/div>\n<\/div>\n<\/div>\n
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sales and business is strong even during<\/div>\n<\/div>\n<\/div>\n
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covid and they’re happy about that<\/div>\n<\/div>\n<\/div>\n
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and that’s a major reason for this gap<\/div>\n<\/div>\n<\/div>\n
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up<\/div>\n<\/div>\n<\/div>\n
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um this top left chart shows the<\/div>\n<\/div>\n<\/div>\n
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five-minute chart<\/div>\n<\/div>\n<\/div>\n
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with this gap up from about 163 dollars<\/div>\n<\/div>\n<\/div>\n
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to 168.30<\/div>\n<\/div>\n<\/div>\n
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as the high in the pre-market<\/div>\n<\/div>\n<\/div>\n
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and we’ll be watching how this reacts<\/div>\n<\/div>\n<\/div>\n
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off the open<\/div>\n<\/div>\n<\/div>\n
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how it pulls into a major support level<\/div>\n<\/div>\n<\/div>\n
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at this 160 450<\/div>\n<\/div>\n<\/div>\n
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from the pre-market and how we really<\/div>\n<\/div>\n<\/div>\n
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hold there<\/div>\n<\/div>\n<\/div>\n
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and then turn around to the upside<\/div>\n<\/div>\n<\/div>\n
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so we’ll mention this had 50 times arvol<\/div>\n<\/div>\n<\/div>\n
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on this day off the open which is<\/div>\n<\/div>\n<\/div>\n
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something very attractive for us the<\/div>\n<\/div>\n<\/div>\n
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higher the arvol the more the higher<\/div>\n<\/div>\n<\/div>\n
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chance that we have an<\/div>\n<\/div>\n<\/div>\n
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outsized move to either direction for<\/div>\n<\/div>\n<\/div>\n
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outsized wrists to reward<\/div>\n<\/div>\n<\/div>\n
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and that’s a really big reason why this<\/div>\n<\/div>\n<\/div>\n
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is a name and play<\/div>\n<\/div>\n<\/div>\n
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um alongside the gap up in strong<\/div>\n<\/div>\n<\/div>\n
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earnings<\/div>\n<\/div>\n<\/div>\n
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so we’ll play it from the market open<\/div>\n<\/div>\n<\/div>\n
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here opening up at around 165 dollars<\/div>\n<\/div>\n<\/div>\n
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and like 50 cents kind of on this<\/div>\n<\/div>\n<\/div>\n
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support level which we’ve been playing<\/div>\n<\/div>\n<\/div>\n
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around in the pre-market<\/div>\n<\/div>\n<\/div>\n
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first minute is pretty slow um takes<\/div>\n<\/div>\n<\/div>\n
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some time for volume to come in<\/div>\n<\/div>\n<\/div>\n
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might be a slightly delayed open<\/div>\n<\/div>\n<\/div>\n
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yeah this did take a minute or two to<\/div>\n<\/div>\n<\/div>\n
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open up<\/div>\n<\/div>\n<\/div>\n
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so yeah we’ll just show the first minute<\/div>\n<\/div>\n<\/div>\n
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or two on the tape here to<\/div>\n<\/div>\n<\/div>\n
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show how it kind of works its way down<\/div>\n<\/div>\n<\/div>\n
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into um<\/div>\n<\/div>\n<\/div>\n
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the next support level at 160 450.<\/div>\n<\/div>\n<\/div>\n
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you guys a little bit more advanced what<\/div>\n<\/div>\n<\/div>\n
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you mean by that is<\/div>\n<\/div>\n<\/div>\n
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it’s taking a couple minutes for the<\/div>\n<\/div>\n<\/div>\n
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specialist to open up the stock<\/div>\n<\/div>\n<\/div>\n
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so it’s 9 30 but it’s<\/div>\n<\/div>\n<\/div>\n
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still not trading at full capacity<\/div>\n<\/div>\n<\/div>\n
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exactly the the majority of the volume<\/div>\n<\/div>\n<\/div>\n
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that can come in<\/div>\n<\/div>\n<\/div>\n
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hasn’t really gone through yet from<\/div>\n<\/div>\n<\/div>\n
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those bigger<\/div>\n<\/div>\n<\/div>\n
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uh desks or fund managers and if this<\/div>\n<\/div>\n<\/div>\n
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was a nasdaq stock<\/div>\n<\/div>\n<\/div>\n
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you wouldn’t have to check that the<\/div>\n<\/div>\n<\/div>\n
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order flow would just come<\/div>\n<\/div>\n<\/div>\n
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right in at its highest peak starting at<\/div>\n<\/div>\n<\/div>\n
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9 30.<\/div>\n<\/div>\n<\/div>\n
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but when you’re trading a new york stock<\/div>\n<\/div>\n<\/div>\n
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exchange<\/div>\n<\/div>\n<\/div>\n
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listed stock sometimes it doesn’t quite<\/div>\n<\/div>\n<\/div>\n
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open at 9 30 on the dot<\/div>\n<\/div>\n<\/div>\n
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takes the specialist a little bit longer<\/div>\n<\/div>\n<\/div>\n
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to figure out how to match some orders<\/div>\n<\/div>\n<\/div>\n
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for the open<\/div>\n<\/div>\n<\/div>\n
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for the opening and balance and after<\/div>\n<\/div>\n<\/div>\n
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that<\/div>\n<\/div>\n<\/div>\n
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then they’re ready to rock and roll<\/div>\n<\/div>\n<\/div>\n
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especially on a day like this where<\/div>\n<\/div>\n<\/div>\n
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we’re doing<\/div>\n<\/div>\n<\/div>\n
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so much more volume than they’re used to<\/div>\n<\/div>\n<\/div>\n
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pairing on the open<\/div>\n<\/div>\n<\/div>\n
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good point good point houston that is<\/div>\n<\/div>\n<\/div>\n
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one thing you want to<\/div>\n<\/div>\n<\/div>\n
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check though if you’re looking for an<\/div>\n<\/div>\n<\/div>\n
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opening drive<\/div>\n<\/div>\n<\/div>\n
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trade and you’re in a new york stock<\/div>\n<\/div>\n<\/div>\n
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exchange listed stock<\/div>\n<\/div>\n<\/div>\n
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you do want to make sure it’s actually<\/div>\n<\/div>\n<\/div>\n
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open there are some times when you think<\/div>\n<\/div>\n<\/div>\n
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it’s open<\/div>\n<\/div>\n<\/div>\n
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and you know it goes down 50 cents<\/div>\n<\/div>\n<\/div>\n
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and it’s not quite open and you’re<\/div>\n<\/div>\n<\/div>\n
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reacting to that 50 cent down move<\/div>\n<\/div>\n<\/div>\n
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but the volume is not there so you are<\/div>\n<\/div>\n<\/div>\n
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in jeopardy of<\/div>\n<\/div>\n<\/div>\n
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a quick snack back that surprises you<\/div>\n<\/div>\n<\/div>\n
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because it’s not really open or worse a<\/div>\n<\/div>\n<\/div>\n
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snapback or worse<\/div>\n<\/div>\n<\/div>\n
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so absolutely right it’s really for the<\/div>\n<\/div>\n<\/div>\n
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newest guys<\/div>\n<\/div>\n<\/div>\n
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make sure the stocks open first<\/div>\n<\/div>\n<\/div>\n
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yep and that’s why you’ll see i don’t<\/div>\n<\/div>\n<\/div>\n
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really take a trade in this until the<\/div>\n<\/div>\n<\/div>\n
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volume comes in<\/div>\n<\/div>\n<\/div>\n
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and i’m sure that this is getting ready<\/div>\n<\/div>\n<\/div>\n
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to trade<\/div>\n<\/div>\n<\/div>\n
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and i’m sorry the way you you tell that<\/div>\n<\/div>\n<\/div>\n
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is nyse will come in<\/div>\n<\/div>\n<\/div>\n
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on the bid and the offer and also you’ll<\/div>\n<\/div>\n<\/div>\n
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just see the<\/div>\n<\/div>\n<\/div>\n
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prince going a lot faster in in the box<\/div>\n<\/div>\n<\/div>\n
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exactly so we’ll see the first major<\/div>\n<\/div>\n<\/div>\n
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pull in here to 160 450 where i’ll have<\/div>\n<\/div>\n<\/div>\n
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a quick entry when it pulls into that<\/div>\n<\/div>\n<\/div>\n
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level<\/div>\n<\/div>\n<\/div>\n
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really respects it and snaps back<\/div>\n<\/div>\n<\/div>\n
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quickly<\/div>\n<\/div>\n<\/div>\n
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so<\/div>\n<\/div>\n<\/div>\n
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we have the nyse<\/div>\n<\/div>\n<\/div>\n
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orders in there now definitely more<\/div>\n<\/div>\n<\/div>\n
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volume going through<\/div>\n<\/div>\n<\/div>\n
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if you want to learn three more real<\/div>\n<\/div>\n<\/div>\n
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world setups that our traders use<\/div>\n<\/div>\n<\/div>\n
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including the simple setup that we teach<\/div>\n<\/div>\n<\/div>\n
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all of our new traders and the setup<\/div>\n<\/div>\n<\/div>\n
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that turned one of our traders into a<\/div>\n<\/div>\n<\/div>\n
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seven<\/div>\n<\/div>\n<\/div>\n
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figure big money earner check out the<\/div>\n<\/div>\n<\/div>\n
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free webinar that we’re currently<\/div>\n<\/div>\n<\/div>\n
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running<\/div>\n<\/div>\n<\/div>\n
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just go ahead and click the link that<\/div>\n<\/div>\n<\/div>\n
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should be appearing now<\/div>\n<\/div>\n<\/div>\n
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at the top right hand corner of your<\/div>\n<\/div>\n<\/div>\n
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screen that will open up the free<\/div>\n<\/div>\n<\/div>\n
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registration page in a new window so<\/div>\n<\/div>\n<\/div>\n
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don’t worry<\/div>\n<\/div>\n<\/div>\n
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you won’t lose this video you can also<\/div>\n<\/div>\n<\/div>\n
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visit<\/div>\n<\/div>\n<\/div>\n
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tradingworkshop.com to register for this<\/div>\n<\/div>\n<\/div>\n
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free intensive workshop<\/div>\n<\/div>\n<\/div>\n
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you’re going to learn more in a couple<\/div>\n<\/div>\n<\/div>\n
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of hours from this trading workshop<\/div>\n<\/div>\n<\/div>\n
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than from years of online education<\/div>\n<\/div>\n<\/div>\n
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we can see right here we’re coming into<\/div>\n<\/div>\n<\/div>\n
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the 160 450<\/div>\n<\/div>\n<\/div>\n
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and we never even get below that level<\/div>\n<\/div>\n<\/div>\n
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the bids hold right at 55 cents<\/div>\n<\/div>\n<\/div>\n
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can’t break down start to move back up<\/div>\n<\/div>\n<\/div>\n
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20 cents<\/div>\n<\/div>\n<\/div>\n
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and this is what gets me long at this<\/div>\n<\/div>\n<\/div>\n
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160 480.<\/div>\n<\/div>\n<\/div>\n
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there’s a lot of variables in my mind<\/div>\n<\/div>\n<\/div>\n
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here strong gap up in the pre-market we<\/div>\n<\/div>\n<\/div>\n
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did hold most of the gap<\/div>\n<\/div>\n<\/div>\n
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strong earnings dip and rip setup has<\/div>\n<\/div>\n<\/div>\n
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been very common recently<\/div>\n<\/div>\n<\/div>\n
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and just knowing that since that support<\/div>\n<\/div>\n<\/div>\n
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level was respected so quickly and so<\/div>\n<\/div>\n<\/div>\n
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well<\/div>\n<\/div>\n<\/div>\n
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uh once it was open and the volume came<\/div>\n<\/div>\n<\/div>\n
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in it really gave<\/div>\n<\/div>\n<\/div>\n
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me good confidence to hold this<\/div>\n<\/div>\n<\/div>\n
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for a move to the upside risking that<\/div>\n<\/div>\n<\/div>\n
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164 450 level<\/div>\n<\/div>\n<\/div>\n
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and you’ll see here i’m putting in my<\/div>\n<\/div>\n<\/div>\n
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hard stop at 164<\/div>\n<\/div>\n<\/div>\n
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42 so if we get a flush under that<\/div>\n<\/div>\n<\/div>\n
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50 uh level i’ll take it all off there<\/div>\n<\/div>\n<\/div>\n
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but otherwise kind of holding this<\/div>\n<\/div>\n<\/div>\n
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thinking we can get a move back to 167<\/div>\n<\/div>\n<\/div>\n
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kind of this mid pre-market range<\/div>\n<\/div>\n<\/div>\n
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um take profits into there and then see<\/div>\n<\/div>\n<\/div>\n
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if this can really trend<\/div>\n<\/div>\n<\/div>\n
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to new highs hey matt how’d you come up<\/div>\n<\/div>\n<\/div>\n
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with 42 cents<\/div>\n<\/div>\n<\/div>\n
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so 42 cents was a little bit arbitrary<\/div>\n<\/div>\n<\/div>\n
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in the sense<\/div>\n<\/div>\n<\/div>\n
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that 164 55 held but i<\/div>\n<\/div>\n<\/div>\n
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often know on these opening drives that<\/div>\n<\/div>\n<\/div>\n
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they’ll test a little bit<\/div>\n<\/div>\n<\/div>\n
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above and below levels to get out the<\/div>\n<\/div>\n<\/div>\n
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weak hands<\/div>\n<\/div>\n<\/div>\n
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especially when it’s moving more<\/div>\n<\/div>\n<\/div>\n
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volatile on the open<\/div>\n<\/div>\n<\/div>\n
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so i often like to give myself just a<\/div>\n<\/div>\n<\/div>\n
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little bit more room<\/div>\n<\/div>\n<\/div>\n
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over that level and see if we really<\/div>\n<\/div>\n<\/div>\n
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kind of hold below that level<\/div>\n<\/div>\n<\/div>\n
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because if we just wick through 55 to<\/div>\n<\/div>\n<\/div>\n
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like 50 and then come back<\/div>\n<\/div>\n<\/div>\n
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and then there’s buyers that’s good but<\/div>\n<\/div>\n<\/div>\n
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if we really get under that 50 cents<\/div>\n<\/div>\n<\/div>\n
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uh it by like at least like eight cents<\/div>\n<\/div>\n<\/div>\n
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i got 10 cents then<\/div>\n<\/div>\n<\/div>\n
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then the trade is kind of over to me uh<\/div>\n<\/div>\n<\/div>\n
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i just want to give myself that little<\/div>\n<\/div>\n<\/div>\n
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bit more room<\/div>\n<\/div>\n<\/div>\n
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because this type of trade can have such<\/div>\n<\/div>\n<\/div>\n
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outsize risk to reward<\/div>\n<\/div>\n<\/div>\n
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risking like uh 30 or<\/div>\n<\/div>\n<\/div>\n
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30 40 50 cents looking for four<\/div>\n<\/div>\n<\/div>\n
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five six points so i think giving<\/div>\n<\/div>\n<\/div>\n
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yourself that little bit of wiggle room<\/div>\n<\/div>\n<\/div>\n
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over the major level you saw can be uh<\/div>\n<\/div>\n<\/div>\n
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important in these opening five<\/div>\n<\/div>\n<\/div>\n
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minutes<\/div>\n<\/div>\n<\/div>\n
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so now we’ll see how we hold this 165<\/div>\n<\/div>\n<\/div>\n
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level and come to 166<\/div>\n<\/div>\n<\/div>\n
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or 165.50 where we’re kind of broke down<\/div>\n<\/div>\n<\/div>\n
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from in the morning and we’re holding<\/div>\n<\/div>\n<\/div>\n
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and you can just see this is such a<\/div>\n<\/div>\n<\/div>\n
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change of character how quickly this is<\/div>\n<\/div>\n<\/div>\n
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breaking out to the upside<\/div>\n<\/div>\n<\/div>\n
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volumes coming in large one minute<\/div>\n<\/div>\n<\/div>\n
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candle<\/div>\n<\/div>\n<\/div>\n
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this is telling me there were real<\/div>\n<\/div>\n<\/div>\n
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buyers down there this isn’t just like a<\/div>\n<\/div>\n<\/div>\n
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quick move up<\/div>\n<\/div>\n<\/div>\n
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to test the level this is a real strong<\/div>\n<\/div>\n<\/div>\n
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open<\/div>\n<\/div>\n<\/div>\n
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with buying coming in offers getting<\/div>\n<\/div>\n<\/div>\n
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taken out<\/div>\n<\/div>\n<\/div>\n
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bids con constantly holding higher and<\/div>\n<\/div>\n<\/div>\n
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respecting these pre-market levels<\/div>\n<\/div>\n<\/div>\n
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so we can see i sold 25 percent and a<\/div>\n<\/div>\n<\/div>\n
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166.28 so kind of just over this 160 650<\/div>\n<\/div>\n<\/div>\n
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level which i knew was<\/div>\n<\/div>\n<\/div>\n
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minor resistance cover some some profits<\/div>\n<\/div>\n<\/div>\n
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in<\/div>\n<\/div>\n<\/div>\n
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as these opening drives can come back<\/div>\n<\/div>\n<\/div>\n
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rather quickly<\/div>\n<\/div>\n<\/div>\n
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like here we’ve already come back about<\/div>\n<\/div>\n<\/div>\n
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a point from that breakout<\/div>\n<\/div>\n<\/div>\n
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but i still thinking the same thing with<\/div>\n<\/div>\n<\/div>\n
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my stop<\/div>\n<\/div>\n<\/div>\n
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maybe make it a little tighter under 165<\/div>\n<\/div>\n<\/div>\n
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now<\/div>\n<\/div>\n<\/div>\n
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which i’m updating so to 164.93<\/div>\n<\/div>\n<\/div>\n
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kind of thinking all right get a little<\/div>\n<\/div>\n<\/div>\n
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tighter<\/div>\n<\/div>\n<\/div>\n
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i don’t if it breaks back down to 160<\/div>\n<\/div>\n<\/div>\n
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450 that’s looking way too weak<\/div>\n<\/div>\n<\/div>\n
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i don’t need to sit through that um m165<\/div>\n<\/div>\n<\/div>\n
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did kind of hold from the major breakout<\/div>\n<\/div>\n<\/div>\n
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and let me button here and say that<\/div>\n<\/div>\n<\/div>\n
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another change in character we see with<\/div>\n<\/div>\n<\/div>\n
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this setup<\/div>\n<\/div>\n<\/div>\n
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is one getting over the opening price<\/div>\n<\/div>\n<\/div>\n
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when we rip back<\/div>\n<\/div>\n<\/div>\n
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up you know that’s a place where i<\/div>\n<\/div>\n<\/div>\n
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usually get in<\/div>\n<\/div>\n<\/div>\n
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\n
or add to my position and then two the<\/div>\n<\/div>\n<\/div>\n
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spread<\/div>\n<\/div>\n<\/div>\n
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tightens up a ridiculous amount and that<\/div>\n<\/div>\n<\/div>\n
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shows you<\/div>\n<\/div>\n<\/div>\n
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\n
that you know the trade is really<\/div>\n<\/div>\n<\/div>\n
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starting to come on in a big way<\/div>\n<\/div>\n<\/div>\n
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earlier in the trade towards the bottom<\/div>\n<\/div>\n<\/div>\n
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of the range the spread is like<\/div>\n<\/div>\n<\/div>\n
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40 35 cents but then<\/div>\n<\/div>\n<\/div>\n
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\n
when we’re really accelerating that<\/div>\n<\/div>\n<\/div>\n
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spread tightens up to<\/div>\n<\/div>\n<\/div>\n
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\n
10 15 cents which in a stock like this<\/div>\n<\/div>\n<\/div>\n
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can<\/div>\n<\/div>\n<\/div>\n
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\n
be dramatic yeah that’s a really good<\/div>\n<\/div>\n<\/div>\n
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point that’s definitely<\/div>\n<\/div>\n<\/div>\n
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\n
an indicator of strength and another<\/div>\n<\/div>\n<\/div>\n
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check in our favor when<\/div>\n<\/div>\n<\/div>\n
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the spread’s tightening up as it moves<\/div>\n<\/div>\n<\/div>\n
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\n
in that direction showing there’s<\/div>\n<\/div>\n<\/div>\n
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definitely<\/div>\n<\/div>\n<\/div>\n
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\n
more orders getting involved now<\/div>\n<\/div>\n<\/div>\n
\n
\n
so this trade is going to take a little<\/div>\n<\/div>\n<\/div>\n
\n
\n
bit of time to play out i’ll skip ahead<\/div>\n<\/div>\n<\/div>\n
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\n
here<\/div>\n<\/div>\n<\/div>\n
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\n
soon in terms of just watching the<\/div>\n<\/div>\n<\/div>\n
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pullback seeing if we still hold higher<\/div>\n<\/div>\n<\/div>\n
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and don’t break<\/div>\n<\/div>\n<\/div>\n
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\n
below that morning low which is where<\/div>\n<\/div>\n<\/div>\n
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\n
we’re really giving it to<\/div>\n<\/div>\n<\/div>\n
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\n
so as we skip ahead a little we can see<\/div>\n<\/div>\n<\/div>\n
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that pulling really held<\/div>\n<\/div>\n<\/div>\n
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\n
then we come to this previous resistance<\/div>\n<\/div>\n<\/div>\n
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\n
hold and then break higher<\/div>\n<\/div>\n<\/div>\n
\n
\n
so i still have two-thirds my position<\/div>\n<\/div>\n<\/div>\n
\n
\n
on and right there i<\/div>\n<\/div>\n<\/div>\n
\n
\n
sold another one-fourth getting me down<\/div>\n<\/div>\n<\/div>\n
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\n
to a half my position<\/div>\n<\/div>\n<\/div>\n
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\n
sold at 168 12. knowing this 168 was<\/div>\n<\/div>\n<\/div>\n
\n
\n
kind of a level in the pre-market<\/div>\n<\/div>\n<\/div>\n
\n
\n
respected here<\/div>\n<\/div>\n<\/div>\n
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\n
question for you<\/div>\n<\/div>\n<\/div>\n
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\n
at any time after the bottom after you<\/div>\n<\/div>\n<\/div>\n
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sort of well after you see<\/div>\n<\/div>\n<\/div>\n
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\n
the the dip part of the dip and rip so<\/div>\n<\/div>\n<\/div>\n
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\n
it pulls in<\/div>\n<\/div>\n<\/div>\n
\n
\n
and you see the bottom from that move<\/div>\n<\/div>\n<\/div>\n
\n
\n
after that’s put in do you see at a<\/div>\n<\/div>\n<\/div>\n
\n
\n
higher level<\/div>\n<\/div>\n<\/div>\n
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\n
an opportunity to add to your position<\/div>\n<\/div>\n<\/div>\n
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or<\/div>\n<\/div>\n<\/div>\n
\n
\n
put on a little bit more risk or<\/div>\n<\/div>\n<\/div>\n
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\n
that’s not part of this this type of<\/div>\n<\/div>\n<\/div>\n
\n
\n
trade for you<\/div>\n<\/div>\n<\/div>\n
\n
\n
um so i definitely think the ad<\/div>\n<\/div>\n<\/div>\n
\n
\n
spot for me would have been the first<\/div>\n<\/div>\n<\/div>\n
\n
\n
major pullback after we broke<\/div>\n<\/div>\n<\/div>\n
\n
\n
um to 166.50 when we really pulled back<\/div>\n<\/div>\n<\/div>\n
\n
\n
and this 160 550<\/div>\n<\/div>\n<\/div>\n
\n
\n
started to support we clearly held<\/div>\n<\/div>\n<\/div>\n
\n
\n
higher after a major breakout<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then we start to pick back up to the<\/div>\n<\/div>\n<\/div>\n
\n
\n
upside on a little bit of lower volume<\/div>\n<\/div>\n<\/div>\n
\n
\n
before an explosive move so i think this<\/div>\n<\/div>\n<\/div>\n
\n
\n
support level which we kind of noted<\/div>\n<\/div>\n<\/div>\n
\n
\n
and kind of reclaimed a little bit could<\/div>\n<\/div>\n<\/div>\n
\n
\n
have been an area to add<\/div>\n<\/div>\n<\/div>\n
\n
\n
but on these trades i’m definitely more<\/div>\n<\/div>\n<\/div>\n
\n
\n
comfortable just going for<\/div>\n<\/div>\n<\/div>\n
\n
\n
more aggressive price targets and and<\/div>\n<\/div>\n<\/div>\n
\n
\n
not always adding but um definitely<\/div>\n<\/div>\n<\/div>\n
\n
\n
knowing these can have<\/div>\n<\/div>\n<\/div>\n
\n
\n
really large moves so giving myself that<\/div>\n<\/div>\n<\/div>\n
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\n
potential with<\/div>\n<\/div>\n<\/div>\n
\n
\n
still having half my shares over this<\/div>\n<\/div>\n<\/div>\n
\n
\n
new all-time high<\/div>\n<\/div>\n<\/div>\n
\n
\n
as this 168 168 30 in the pre-market was<\/div>\n<\/div>\n<\/div>\n
\n
\n
the new all-time high of the stock<\/div>\n<\/div>\n<\/div>\n
\n
\n
so here we’re just going to keep<\/div>\n<\/div>\n<\/div>\n
\n
\n
watching how this kind of<\/div>\n<\/div>\n<\/div>\n
\n
\n
breakout develops like i said we’re<\/div>\n<\/div>\n<\/div>\n
\n
\n
often going to pull back<\/div>\n<\/div>\n<\/div>\n
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\n
under these important levels after a<\/div>\n<\/div>\n<\/div>\n
\n
\n
break out through them<\/div>\n<\/div>\n<\/div>\n
\n
\n
especially when we’re at new all-time<\/div>\n<\/div>\n<\/div>\n
\n
\n
highs in a stock they need to<\/div>\n<\/div>\n<\/div>\n
\n
\n
develop the price uh levels and support<\/div>\n<\/div>\n<\/div>\n
\n
\n
levels<\/div>\n<\/div>\n<\/div>\n
\n
\n
um and it takes a little bit longer to<\/div>\n<\/div>\n<\/div>\n
\n
\n
do that when there isn’t clear technical<\/div>\n<\/div>\n<\/div>\n
\n
\n
chart levels so watching the tape is<\/div>\n<\/div>\n<\/div>\n
\n
\n
pretty important on these breakouts and<\/div>\n<\/div>\n<\/div>\n
\n
\n
noticing<\/div>\n<\/div>\n<\/div>\n
\n
\n
how it’s reacting after a breakout how<\/div>\n<\/div>\n<\/div>\n
\n
\n
far is it usually pulling back<\/div>\n<\/div>\n<\/div>\n
\n
\n
what type of speed is it pulling back on<\/div>\n<\/div>\n<\/div>\n
\n
\n
am i getting a change of character<\/div>\n<\/div>\n<\/div>\n
\n
\n
in that sense on the tape maybe that’s a<\/div>\n<\/div>\n<\/div>\n
\n
\n
reason to trim<\/div>\n<\/div>\n<\/div>\n
\n
\n
um in this in this case i really think<\/div>\n<\/div>\n<\/div>\n
\n
\n
this is holding well again<\/div>\n<\/div>\n<\/div>\n
\n
\n
gets under this 168 which he broke out<\/div>\n<\/div>\n<\/div>\n
\n
\n
from can’t really hold below<\/div>\n<\/div>\n<\/div>\n
\n
\n
some bidders are still getting involved<\/div>\n<\/div>\n<\/div>\n
\n
\n
there and we’re starting to chop around<\/div>\n<\/div>\n<\/div>\n
\n
\n
that level<\/div>\n<\/div>\n<\/div>\n
\n
\n
so that’s giving me confidence to hold<\/div>\n<\/div>\n<\/div>\n
\n
\n
the second half of my shares to see<\/div>\n<\/div>\n<\/div>\n
\n
\n
if we can really keep trending the<\/div>\n<\/div>\n<\/div>\n
\n
\n
upside i mean at all time highs on 12<\/div>\n<\/div>\n<\/div>\n
\n
\n
times our ball still<\/div>\n<\/div>\n<\/div>\n
\n
\n
this is a great candidate to keep moving<\/div>\n<\/div>\n<\/div>\n
\n
\n
on the day<\/div>\n<\/div>\n<\/div>\n
\n
\n
yeah i want to point something out in<\/div>\n<\/div>\n<\/div>\n
\n
\n
terms of psychology<\/div>\n<\/div>\n<\/div>\n
\n
\n
always good to think about who’s on the<\/div>\n<\/div>\n<\/div>\n
\n
\n
other side of the trade so uh your<\/div>\n<\/div>\n<\/div>\n
\n
\n
your second yellow line<\/div>\n<\/div>\n<\/div>\n
\n
\n
show in the pre-market so if we look in<\/div>\n<\/div>\n<\/div>\n
\n
\n
the pre-market your second yellow line<\/div>\n<\/div>\n<\/div>\n
\n
\n
this one at 167.42 okay this would<\/div>\n<\/div>\n<\/div>\n
\n
\n
this was the prior all-time high coming<\/div>\n<\/div>\n<\/div>\n
\n
\n
into the day as well and and then so you<\/div>\n<\/div>\n<\/div>\n
\n
\n
see at 8 30<\/div>\n<\/div>\n<\/div>\n
\n
\n
we start to roll over from that support<\/div>\n<\/div>\n<\/div>\n
\n
\n
right yep right here<\/div>\n<\/div>\n<\/div>\n
\n
\n
all right so when when we roll over from<\/div>\n<\/div>\n<\/div>\n
\n
\n
that support momentum traders<\/div>\n<\/div>\n<\/div>\n
\n
\n
momentum day traders are going to do<\/div>\n<\/div>\n<\/div>\n
\n
\n
what they’re going to get short that<\/div>\n<\/div>\n<\/div>\n
\n
\n
level they’re going to get short<\/div>\n<\/div>\n<\/div>\n
\n
\n
that’s a door pattern they’re going to<\/div>\n<\/div>\n<\/div>\n
\n
\n
say maybe the stocks up too much it<\/div>\n<\/div>\n<\/div>\n
\n
\n
should pull in a little bit<\/div>\n<\/div>\n<\/div>\n
\n
\n
i’m going to get short it’s not holding<\/div>\n<\/div>\n<\/div>\n
\n
\n
these<\/div>\n<\/div>\n<\/div>\n
\n
\n
higher support levels and that’s<\/div>\n<\/div>\n<\/div>\n
\n
\n
and that’s different than what what it<\/div>\n<\/div>\n<\/div>\n
\n
\n
had been doing in the pre-market<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then you know so it goes down has a<\/div>\n<\/div>\n<\/div>\n
\n
\n
nice pull in<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then it pops back up to like that<\/div>\n<\/div>\n<\/div>\n
\n
\n
once a little bit around that 167 area<\/div>\n<\/div>\n<\/div>\n
\n
\n
but below that 160 750 area and it makes<\/div>\n<\/div>\n<\/div>\n
\n
\n
a what<\/div>\n<\/div>\n<\/div>\n
\n
\n
uh makes it look at the market<\/div>\n<\/div>\n<\/div>\n
\n
\n
it makes a lower high right from that<\/div>\n<\/div>\n<\/div>\n
\n
\n
so there are some more people so when<\/div>\n<\/div>\n<\/div>\n
\n
\n
they when people see that lower high<\/div>\n<\/div>\n<\/div>\n
\n
\n
what are they doing<\/div>\n<\/div>\n<\/div>\n
\n
\n
they’re getting short again they’re<\/div>\n<\/div>\n<\/div>\n
\n
\n
getting short yeah under the breakdown<\/div>\n<\/div>\n<\/div>\n
\n
\n
or<\/div>\n<\/div>\n<\/div>\n
\n
\n
into the pop as well yeah and then<\/div>\n<\/div>\n<\/div>\n
\n
\n
uh you’re seeing and then you see the<\/div>\n<\/div>\n<\/div>\n
\n
\n
stock make actually a new low<\/div>\n<\/div>\n<\/div>\n
\n
\n
right when we open up right yep and so<\/div>\n<\/div>\n<\/div>\n
\n
\n
there are people doing what<\/div>\n<\/div>\n<\/div>\n
\n
\n
there are people uh hitting the momentum<\/div>\n<\/div>\n<\/div>\n
\n
\n
short there probably through the lows<\/div>\n<\/div>\n<\/div>\n
\n
\n
yeah and so there are three areas where<\/div>\n<\/div>\n<\/div>\n
\n
\n
momentum traders are short<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so when you pack when you pop back<\/div>\n<\/div>\n<\/div>\n
\n
\n
up<\/div>\n<\/div>\n<\/div>\n
\n
\n
towards that 167 area<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then you start to go back up again<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’re getting the people who shorted<\/div>\n<\/div>\n<\/div>\n
\n
\n
the lower high out<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then when you get that move back up<\/div>\n<\/div>\n<\/div>\n
\n
\n
towards 160 750 and get above there<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’re getting people to start to think<\/div>\n<\/div>\n<\/div>\n
\n
\n
that the momentum<\/div>\n<\/div>\n<\/div>\n
\n
\n
is not to the downside anymore so you<\/div>\n<\/div>\n<\/div>\n
\n
\n
just always want to be thinking in the<\/div>\n<\/div>\n<\/div>\n
\n
\n
back of your head<\/div>\n<\/div>\n<\/div>\n
\n
\n
hey is the momentum on a short-term<\/div>\n<\/div>\n<\/div>\n
\n
\n
basis as an active trader is it down or<\/div>\n<\/div>\n<\/div>\n
\n
\n
is it up<\/div>\n<\/div>\n<\/div>\n
\n
\n
and you want to be cognizant of it’s not<\/div>\n<\/div>\n<\/div>\n
\n
\n
down anymore<\/div>\n<\/div>\n<\/div>\n
\n
\n
because we need something new<\/div>\n<\/div>\n<\/div>\n
\n
\n
for people to think it’s it’s going to<\/div>\n<\/div>\n<\/div>\n
\n
\n
be down it made new highs<\/div>\n<\/div>\n<\/div>\n
\n
\n
it got above previous resistance areas<\/div>\n<\/div>\n<\/div>\n
\n
\n
and again these are very short-term<\/div>\n<\/div>\n<\/div>\n
\n
\n
charts<\/div>\n<\/div>\n<\/div>\n
\n
\n
um but that intraday momentum is<\/div>\n<\/div>\n<\/div>\n
\n
\n
not as bearish for these people anymore<\/div>\n<\/div>\n<\/div>\n
\n
\n
does that make sense<\/div>\n<\/div>\n<\/div>\n
\n
\n
agreed yeah and i like to use the<\/div>\n<\/div>\n<\/div>\n
\n
\n
five-minute chart as well personally to<\/div>\n<\/div>\n<\/div>\n
\n
\n
try and get that bigger picture idea<\/div>\n<\/div>\n<\/div>\n
\n
\n
which is my top left chart here and we<\/div>\n<\/div>\n<\/div>\n
\n
\n
can see that once we break out and then<\/div>\n<\/div>\n<\/div>\n
\n
\n
we’re really holding higher on the five<\/div>\n<\/div>\n<\/div>\n
\n
\n
minute over the night or 21 ema and<\/div>\n<\/div>\n<\/div>\n
\n
\n
v-wop<\/div>\n<\/div>\n<\/div>\n
\n
\n
it’s definitely looking a little better<\/div>\n<\/div>\n<\/div>\n
\n
\n
from a longer term as well 100<\/div>\n<\/div>\n<\/div>\n
\n
\n
and i think that when you’re trading you<\/div>\n<\/div>\n<\/div>\n
\n
\n
know when we’re trading right on the<\/div>\n<\/div>\n<\/div>\n
\n
\n
open<\/div>\n<\/div>\n<\/div>\n
\n
\n
we’re looking at shorter time frames and<\/div>\n<\/div>\n<\/div>\n
\n
\n
then as the day goes on<\/div>\n<\/div>\n<\/div>\n
\n
\n
what a lot of really good traders do is<\/div>\n<\/div>\n<\/div>\n
\n
\n
they start to look at longer term charts<\/div>\n<\/div>\n<\/div>\n
\n
\n
so on the open some people might even<\/div>\n<\/div>\n<\/div>\n
\n
\n
trade a tick chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
right some people uh may look at a<\/div>\n<\/div>\n<\/div>\n
\n
\n
one-minute chart right on the open<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then in the same stock they may say<\/div>\n<\/div>\n<\/div>\n
\n
\n
well after 10 30<\/div>\n<\/div>\n<\/div>\n
\n
\n
i’m not obviously making opening drive<\/div>\n<\/div>\n<\/div>\n
\n
\n
plays anymore maybe i’m going to start<\/div>\n<\/div>\n<\/div>\n
\n
\n
to look for some swing trades i’m going<\/div>\n<\/div>\n<\/div>\n
\n
\n
to go to a different section of my<\/div>\n<\/div>\n<\/div>\n
\n
\n
playbook<\/div>\n<\/div>\n<\/div>\n
\n
\n
for that i’m going to look at a 5-minute<\/div>\n<\/div>\n<\/div>\n
\n
\n
chart a 15-minute chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
to see where we are with those<\/div>\n<\/div>\n<\/div>\n
\n
\n
agreed and i often trade on a little bit<\/div>\n<\/div>\n<\/div>\n
\n
\n
shorter of a time frame as<\/div>\n<\/div>\n<\/div>\n
\n
\n
the morning session up till 11 a.m is my<\/div>\n<\/div>\n<\/div>\n
\n
\n
strongest trading hours so i definitely<\/div>\n<\/div>\n<\/div>\n
\n
\n
am working on talking with guys that<\/div>\n<\/div>\n<\/div>\n
\n
\n
trade later in the day<\/div>\n<\/div>\n<\/div>\n
\n
\n
in my class and kind of seeing how<\/div>\n<\/div>\n<\/div>\n
\n
\n
they’re developing longer term chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
patterns<\/div>\n<\/div>\n<\/div>\n
\n
\n
uh interpreting volume and kind of<\/div>\n<\/div>\n<\/div>\n
\n
\n
interpreting the technicals for<\/div>\n<\/div>\n<\/div>\n
\n
\n
the longer term so that’s definitely a<\/div>\n<\/div>\n<\/div>\n
\n
\n
reason why i have this<\/div>\n<\/div>\n<\/div>\n
\n
\n
hourly chart up here in the five minute<\/div>\n<\/div>\n<\/div>\n
\n
\n
as the day goes on i’m trying to<\/div>\n<\/div>\n<\/div>\n
\n
\n
think a little bigger picture where your<\/div>\n<\/div>\n<\/div>\n
\n
\n
results are best<\/div>\n<\/div>\n<\/div>\n
\n
\n
right on the open yes the first half<\/div>\n<\/div>\n<\/div>\n
\n
\n
hour<\/div>\n<\/div>\n<\/div>\n
\n
\n
is my best results by far so so far<\/div>\n<\/div>\n<\/div>\n
\n
\n
so i mean you’re going to want a<\/div>\n<\/div>\n<\/div>\n
\n
\n
different playbook<\/div>\n<\/div>\n<\/div>\n
\n
\n
for different time periods so the way<\/div>\n<\/div>\n<\/div>\n
\n
\n
we’re going to trade in the first<\/div>\n<\/div>\n<\/div>\n
\n
\n
45 minutes of the day it’s not how we’re<\/div>\n<\/div>\n<\/div>\n
\n
\n
going to trade<\/div>\n<\/div>\n<\/div>\n
\n
\n
after 10 30 or after 11.<\/div>\n<\/div>\n<\/div>\n
\n
\n
we’re gonna we’re gonna yeah so good so<\/div>\n<\/div>\n<\/div>\n
\n
\n
good good to notice that<\/div>\n<\/div>\n<\/div>\n
\n
\n
great so i will show skip ahead now to<\/div>\n<\/div>\n<\/div>\n
\n
\n
where<\/div>\n<\/div>\n<\/div>\n
\n
\n
i actually do get stopped out of this<\/div>\n<\/div>\n<\/div>\n
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trade um for the second<\/div>\n<\/div>\n<\/div>\n
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leg as the pullbacks just not really<\/div>\n<\/div>\n<\/div>\n
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what i was hoping for<\/div>\n<\/div>\n<\/div>\n
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it’s a little steeper here start holding<\/div>\n<\/div>\n<\/div>\n
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below this prior all-time high<\/div>\n<\/div>\n<\/div>\n
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like i said i trade a little shorter<\/div>\n<\/div>\n<\/div>\n
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term so i was kind of watching this<\/div>\n<\/div>\n<\/div>\n
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purple line you can barely<\/div>\n<\/div>\n<\/div>\n
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see it over the blue one there but<\/div>\n<\/div>\n<\/div>\n
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that’s my 21 ema on the five minute<\/div>\n<\/div>\n<\/div>\n
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and i like to use that as we get to this<\/div>\n<\/div>\n<\/div>\n
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like 9 50 10 o’clock area<\/div>\n<\/div>\n<\/div>\n
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for leaving on a potential trend in my<\/div>\n<\/div>\n<\/div>\n
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shares<\/div>\n<\/div>\n<\/div>\n
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and so soon here we are gonna wick below<\/div>\n<\/div>\n<\/div>\n
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that level<\/div>\n<\/div>\n<\/div>\n
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uh at 166.43<\/div>\n<\/div>\n<\/div>\n
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um and kind of stop me out there as you<\/div>\n<\/div>\n<\/div>\n
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can see it’s kind of a harsh pullback<\/div>\n<\/div>\n<\/div>\n
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not quite what i was expecting<\/div>\n<\/div>\n<\/div>\n
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and then it’ll have one more move that<\/div>\n<\/div>\n<\/div>\n
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really stops out a lot of weak<\/div>\n<\/div>\n<\/div>\n
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longs or i mean yeah week longs and you<\/div>\n<\/div>\n<\/div>\n
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can see this wick right back down 166.50<\/div>\n<\/div>\n<\/div>\n
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and it re-bids<\/div>\n<\/div>\n<\/div>\n
\n
\n
so i was glad i was out before this<\/div>\n<\/div>\n<\/div>\n
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because this would have stopped me out<\/div>\n<\/div>\n<\/div>\n
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regardless<\/div>\n<\/div>\n<\/div>\n
\n
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but i want to show the power of sticking<\/div>\n<\/div>\n<\/div>\n
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with this trade or sticking with the<\/div>\n<\/div>\n<\/div>\n
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stock and looking at the higher time<\/div>\n<\/div>\n<\/div>\n
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frame and really what you could have<\/div>\n<\/div>\n<\/div>\n
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captured on the second leg here<\/div>\n<\/div>\n<\/div>\n
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as these wicks could have been potential<\/div>\n<\/div>\n<\/div>\n
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riads or when you see it hold higher<\/div>\n<\/div>\n<\/div>\n
\n
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here<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then we are going to break out to<\/div>\n<\/div>\n<\/div>\n
\n
\n
another new all-time high<\/div>\n<\/div>\n<\/div>\n
\n
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after a pretty steep pullback but you<\/div>\n<\/div>\n<\/div>\n
\n
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can see on the five minute um<\/div>\n<\/div>\n<\/div>\n
\n
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never really did break back through that<\/div>\n<\/div>\n<\/div>\n
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pre-market low or anything of that<\/div>\n<\/div>\n<\/div>\n
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nature<\/div>\n<\/div>\n<\/div>\n
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and it was somewhat of a higher low so<\/div>\n<\/div>\n<\/div>\n
\n
\n
yeah that really shows there was another<\/div>\n<\/div>\n<\/div>\n
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two three almost four points<\/div>\n<\/div>\n<\/div>\n
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left on the table as this one even<\/div>\n<\/div>\n<\/div>\n
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higher on the day i believe<\/div>\n<\/div>\n<\/div>\n
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\n
so yeah it kind of shows how i’m using<\/div>\n<\/div>\n<\/div>\n
\n
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the one minute charts and<\/div>\n<\/div>\n<\/div>\n
\n
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and sometimes you get stopped out a<\/div>\n<\/div>\n<\/div>\n
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little earlier but it also keeps your<\/div>\n<\/div>\n<\/div>\n
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risk<\/div>\n<\/div>\n<\/div>\n
\n
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a bit tighter and then trying to<\/div>\n<\/div>\n<\/div>\n
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identify the larger time frame trade is<\/div>\n<\/div>\n<\/div>\n
\n
\n
now what i’m working on and that’s why i<\/div>\n<\/div>\n<\/div>\n
\n
\n
didn’t quite take this trade as i know<\/div>\n<\/div>\n<\/div>\n
\n
\n
i’m a little weaker in it and i want to<\/div>\n<\/div>\n<\/div>\n
\n
\n
watch how they develop more and this one<\/div>\n<\/div>\n<\/div>\n
\n
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just these<\/div>\n<\/div>\n<\/div>\n
\n
\n
these these pullbacks were a little too<\/div>\n<\/div>\n<\/div>\n
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harsh for me to really have confidence<\/div>\n<\/div>\n<\/div>\n
\n
\n
to get back in again<\/div>\n<\/div>\n<\/div>\n
\n
\n
so yeah that’s mostly what we have for<\/div>\n<\/div>\n<\/div>\n
\n
\n
you um earnings to all-time highs and a<\/div>\n<\/div>\n<\/div>\n
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\n
strong<\/div>\n<\/div>\n<\/div>\n
\n
\n
name uh a strong sector in terms of<\/div>\n<\/div>\n<\/div>\n
\n
\n
online sales during covid<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then the clear buying in the tape<\/div>\n<\/div>\n<\/div>\n
\n
\n
off pre-market levels leading to<\/div>\n<\/div>\n<\/div>\n
\n
\n
pretty strong uh move to the upside i<\/div>\n<\/div>\n<\/div>\n
\n
\n
mean who doesn’t love to go to target<\/div>\n<\/div>\n<\/div>\n
\n
\n
exactly they got a little bit of<\/div>\n<\/div>\n<\/div>\n
\n
\n
everything there hey go ahead and click<\/div>\n<\/div>\n<\/div>\n
\n
\n
our subscribe button so you don’t miss<\/div>\n<\/div>\n<\/div>\n
\n
\n
any of the videos they’re producing for<\/div>\n<\/div>\n<\/div>\n
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\n
you and the trading community and please<\/div>\n<\/div>\n<\/div>\n
\n
\n
take the time to add your feedback in<\/div>\n<\/div>\n<\/div>\n
\n
\n
the comments section for what videos<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’d like for us to produce next<\/div>\n<\/div>\n<\/div>\n
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\n
and what you found helpful from this<\/div>\n<\/div>\n<\/div>\n
\n
\n
video from all of us at smb<\/div>\n<\/div>\n<\/div>\n
\n
\n
train and trade well<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\"\"<\/a><\/p>\n

* no relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"

In this video, we discuss a popular trading strategy in a strong market. Two SMB traders and Mike Bellafiore review tape in Target for this Dip and Rip trade setup. 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