Recognizing Trade Setups – GLYC, AMD, IMMU, DRYS

The point of trading is to actually trade, so more about recognizing the trade setup is in the following video. And I did end up daytrading GLYC late in the day for .59, on the retest of the support area laid out in the video.

 

 

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About traderscott 376 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

11 Comments

  1. A)How do you go about recognizing when a stock is running out of steam. Meaning, it had its move and now is time to allow it to rest for the next roller coaster ride?
    B)this question is basically the reverse of A. How do you go about identifying when a stock is ready for its next roller coaster ride?

    • Good insight. Let me ponder how to do this one. But experience, chart after chart, trade after trade, is an awesome teacher. And just keep asking questions, and letting it add up.

      • I’m trading a few share at a time, just for the experience. Paper trading is kind of boring I guess.
        Today I literally only traded 4 shares of ETRM had a loss though.(could careless)
        Got a question on low volume and low volatility on a break of support.
        This chart https://www.tradingview.com/x/VzUEvyUw/ will help me to better illustrate what I’m trying to say.
        A) What can we learn from the low volume and volatility when occurs just bellow support?
        B) Is it a good entry point to buy bellow support when volume and volatility dies?

        • B) Support is the very best entry tool for trading. So yes. A) It’s generally the supply is exhausted, and weak hands are sold out for now. But the important thing is just recognizing it, because that is a trade entry type signal. And the more tools which are showing a solid area there, the better. And we actually had a teenie trend absorption at around 16.76. This is totally micro-managing on a 1 minute, but it is there. I’m not trading that thing, but it’s the recognition of this stuff which will bleed into good feel for all of this. And to say it again, there’s the entry, and the profit taking, once we clear the stop loss potential most likely. And yes, that was a nice backup, but we’re getting into resistance again. So then what do you do. This can just stay in a range and back up again – if you really believe it’s blasting higher then you hold. So trading or not is what I do going into a position. If I know it’s short term, my mentality is totally different. So if you were doing USLV, for example, remember to check trade parameters – 12.60 is resistance. Silver loves the weak $. Gold likes the strong Yen. And notice the correlations today – put that in a journal. They’re weird today, maybe nothing, but maybe something.

  2. I scratched my PAAS trade today, thought there would be a bounce after the sell off but no-mo, even with the metals up and the dollar tanking.
    Thinking the USD is going to reverse when the Euro bumps up against resistance at 1.123ish and blast the weak miners?

    • Yep, no bounce in some, juniors lagging again, and gold continuing to give more glimpses of breaking correlations. That is the real future.
      My long $ position continues to take a hit, soon I may be “living in a van down by the river“. And to me it’s the 113.00 thing in the Euro which is the bigger resistance. Quite a rally so far. It’s interesting the relatively muted rally in gold given the move in the $. It is still my belief of miners having one, maybe two buying opps.

  3. How is a trend absorption near it’s support area, that fails to kick-start a rally a SOS?
    Would you say that this setup was a “Using Sell Stops To Our Advantage”?

    • A) and B) Which one is that? And let’s make sure we’re talking the same time frame. Bigger picture, or shorter term.

  4. I was referring to the xagusd chart above(1 min time frame) and your comment about the trend absorption”And we actually had a teenie trend absorption at around 16.76. This is totally micro-managing on a 1 minute,”
    If you look at the trend absorption it failed to push higher the price.(did not move up from there and had new low).
    So those 2 questions above about trend absorption and “Using Sell Stops To Our Advantage” was refereed to the 1min Xauusd chart. If that makes sense?

    • Yes gotcha. Here is the chart with arrows. And that’s why I said teenie and micro-managing, it’s just recognizing. But some individual trader daytrading silver futures, that is a real trade in there. I just want to point out to continue to look at a chart and see all of the little clues, recognize these things. This is what the trade setups of all kinds are based on, and using these things which are real “technical events” no matter what the time frame of the individual. I use all of this stuff to give me overall “clues” of markets, even tho I’m not trading much of these things at all. I only do 1-3 trades a day, sometimes none, or sometimes holding positions, and something may spark a reason to get out or whatever. And with silver, really no defineable SOS on the rally, but remember we had the EAs (arrows), EAs are also SOSes. So those 2 EAs, cleared out some weak hands, and then the little break below – voila, just getting rid of some stragglers. That is your spot then. But keep in mind, it doesn’t always do that, so you may miss a trade. 2 parts to this deal. And you can do a count in there also, but to reiterate that is a benchmark type thing with the count, it’s specific to the trade setup itself. I did not use a 123 count on the 2 GLYC trades, just pure belief in strong momentum – trading range mentality, not reaction after buying climax mentality.

      • Raphael, let’s make sure we’re on the same page with this and the questions are answered. If I didn’t explain it well, let me know.

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