{"id":8568,"date":"2010-11-30T23:46:24","date_gmt":"2010-12-01T04:46:24","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=8568"},"modified":"2010-11-30T23:46:24","modified_gmt":"2010-12-01T04:46:24","slug":"fcx-one-way-to-catch-a-top","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/fcx-one-way-to-catch-a-top","title":{"rendered":"FCX: One way to catch a top"},"content":{"rendered":"<p>As many of you who read this blog and follow us on Twitter know, we have been very focused on FCX for the past several days.\u00a0 This stock has a well-earned reputation for being difficult to trade, but when it is really in play with good order flow, it actually behaves itself pretty well.\u00a0 I tend to focus on with-trend trades, and encourage the traders who I mentor to do the same, for many good reasons.\u00a0 It is very easy to get caught up fading stocks because you think they have gone too far (or if you&#8217;ve read some books on technical analysis you have a better way to say it:\u00a0 they are &#8220;overbought&#8221; or &#8220;oversold&#8221;), but the reality is that stocks can get overextended and stay overextended while they trend a lot further than anyone expected.\u00a0 Traders fading into these moves have to deal with anger, frustration and mounting losses, and save enough bullets that they can really lay into the stock when they finally catch the turn.\u00a0 It&#8217;s a lot to ask and a hard way to make a living, especially when there are much easier ways to sell the top or buy the bottom.<\/p>\n<p>First of all, realize that we are not going to sell the exact high of the move or buy the low, except on that one trade out of a hundred when we just kind of get lucky.\u00a0 What we need to do is to see signs the trend has ended, watch for the very first signs that the tide has turned and is now flowing in the other direction, and then enter in the direction of the new trend.\u00a0 I have written before (<a href=\"http:\/\/www.smbtraining.com\/blog\/3-pushes-to-end-a-trend-an-important-pattern-illustrated-in-todays-market-action\">here<\/a>) about 3 pushes or 3 drives to a high, which is one of my favorite trend ending patterns on all timeframes.\u00a0 (If you haven&#8217;t seen this one before, I know it seems absurd.\u00a0 Keep an open mind and watch for it for a few months and let me know what you think then.)<\/p>\n<p>So we were watching FCX midday and Joe P (on twitter as JoeP_SMB) who sits beside me made some long trades in FCX earlier today.\u00a0 I was halfheartedly involved in them, but didn&#8217;t really feel the conviction, so I was very aggressive in calling out the 3 pushes top I saw (marked A) on the chart below.\u00a0 This pattern alone is not enough to get us short, especially a stock like this that is more than happy to run you over if you&#8217;re early on an entry, so we then waited for the first countertrend break, and shorted on the retracement marked B on the chart below.\u00a0 I took partial profits on the blue dot, added to the trade later in the day (for several reasons), and covered the last of my short into the close.\u00a0 Considering how difficult this stock can be, this was a very easy, painless trade which got us short less than half a point from the high of the move and let us ride the new downtrend all the way to the close.<\/p>\n<p>There are a few subtle refinements to this trade, but this pattern occurs over and over, in all markets and all timeframes.\u00a0 Do some chart study, practice identifying the pattern in real time, and see if this can become a valuable addition to your playbook.<\/p>\n<p>(Follow me on Twitter AdamG_SMB)<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/11\/11-30-2010-9-25-16-PM.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-8567\" title=\"11-30-2010 9-25-16 PM\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/11\/11-30-2010-9-25-16-PM.jpg\" alt=\"\" width=\"512\" height=\"373\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/11\/11-30-2010-9-25-16-PM.jpg 853w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/11\/11-30-2010-9-25-16-PM-300x218.jpg 300w\" sizes=\"auto, (max-width: 512px) 100vw, 512px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>AdamG_SMB shows one way to catch the turn in a strongly trending stock.<\/p>\n","protected":false},"author":388,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[943,3,1373],"tags":[1493,1346,361,1492],"class_list":["post-8568","post","type-post","status-publish","format-standard","hentry","category-adam-grimess-blogs","category-technical_plays","category-trading-lesson","tag-anti","tag-end-of-trend","tag-fade","tag-trend-change","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>FCX: One way to catch a top | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/fcx-one-way-to-catch-a-top\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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