Anatomy of a Trade Setup

There are quite a few good lessons in Friday’s trading. The charts were run intraday. WATT and CANN are updated thru Friday’s close, fills here. Almost everyone has a useless opinion about BTC. I could care less what the stupid comments are. I am treating BTC as being in reaccumulation, thus I’m buying into the reaction trade setups. And I’m exiting into the rallies. If it’s something much bigger to the downside, I will adjust.

I’m still long partial positions in TEUM and RIOT with scratch stops for now.

We nailed the rally in the pot stocks, but that rally is getting overdone. I sold some more CANN at 7.04, the buy is discussed in this post on the home page.

The trade setup anatomy today – WATT was the only daytrade, pretty happy with it, but should have sold the full position at 27.51 into the rally. Notice a few things, the 123 top, once that is recognized, the probability of the first support holding for a spring – that probability is much lower. Stay away. Let it break pretty good. Look at the next support area. Then wait for a 123 spring setup. It was a beauty – a 10%+ trade for me, and once I sold the 1/2 position, I then moved the stop (physical at first, then mental) to scratch – trade management. The rest of the position was a scratch, and you can see what happened after my stop point was hit.

 

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About traderscott 1067 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.

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