Most traders think they need a "perfect strategy" to win
I made $95k in 1 month following a simple approach.
All you need to is find momentum in the markets
Here is how to do it using a simple and repeatable strategy:👇🧵
To start off, we have to understand the point of this strategy..
The goal is to simplify trading and look for repeatable setups to trade
We want to take advantage of strong market trends & use the leverage of options for a low risk high reward approach
Using big momentum swings in the markets we can catch the biggest moves
The goal is to simplify trading and look for repeatable setups to trade
We want to take advantage of strong market trends & use the leverage of options for a low risk high reward approach
Using big momentum swings in the markets we can catch the biggest moves
we want to be in the strongest stocks in the market that institutions are pouring into
That way when the markets move higher these will be the leading stocks and when markets move lower these sectors and stocks will hold up well
Momentum is rooted in human psychology.
When a stock is trending strongly (up or down), buyers and sellers pile in, reinforcing the move. This persistence creates opportunities to ride waves.
That way when the markets move higher these will be the leading stocks and when markets move lower these sectors and stocks will hold up well
Momentum is rooted in human psychology.
When a stock is trending strongly (up or down), buyers and sellers pile in, reinforcing the move. This persistence creates opportunities to ride waves.
1. Finding market strength and weakness
The easiest way to find out if the markets are trending is to:
Pull up a chart on tradingview.com
and add the 8, 21, 50 EMA's
EMA's can be used as a momentum gauge for when the markets are the hottest and stocks follow through the most.
The easiest way to find out if the markets are trending is to:
Pull up a chart on tradingview.com
and add the 8, 21, 50 EMA's
EMA's can be used as a momentum gauge for when the markets are the hottest and stocks follow through the most.
2. Framework
Now that we have the EMA's on the chart, we can make some rules for when we want to be active in the markets.
Use $SPY / $QQQ
1) Whenever $SPY / $QQQ are above the 8/21/50 EMA's, we want to be long with full size/conviction
2) Whenever $SPY / $QQQ are below the 8/21/50 EMA's, we want to use smaller size or completely avoid trading
This way we have a guide for when markets are going to be following through, and our strategy will be the most effective.
We can also use this on the individual names we are swing trading to narrow down our criteria.
Now that we have the EMA's on the chart, we can make some rules for when we want to be active in the markets.
Use $SPY / $QQQ
1) Whenever $SPY / $QQQ are above the 8/21/50 EMA's, we want to be long with full size/conviction
2) Whenever $SPY / $QQQ are below the 8/21/50 EMA's, we want to use smaller size or completely avoid trading
This way we have a guide for when markets are going to be following through, and our strategy will be the most effective.
We can also use this on the individual names we are swing trading to narrow down our criteria.
3. Finding leading stocks
Easiest way to scan for leading stocks and themes is to use: tradingview.com
Click on screener(bottom right corner)
We want to narrow it down to search for liquid stocks that are leading on volume
Here are the parameters I use in my scan:
Price: Over $3
Market cap: Over $300m+
Volume: Over 500k
Change: Over 0.01
ADR: Over 2%
And most importantly the 21 and 50 EMA's below price to find leading names
Easiest way to scan for leading stocks and themes is to use: tradingview.com
Click on screener(bottom right corner)
We want to narrow it down to search for liquid stocks that are leading on volume
Here are the parameters I use in my scan:
Price: Over $3
Market cap: Over $300m+
Volume: Over 500k
Change: Over 0.01
ADR: Over 2%
And most importantly the 21 and 50 EMA's below price to find leading names
Now we have a list of the strongest and most liquid stocks in the market
Sort the list by volume highest
This scan will show you the strongest stocks starting to ignite out of big bases
Sort the list by volume highest
This scan will show you the strongest stocks starting to ignite out of big bases
4. Setup
You are now looking for a chart that is setting up in a tight base with a tight pattern forming
The goal is to find names that are either just breaking out or about to breakout of tight bases
Use this checklist
1. Tight pattern or base
2. decreasing volume on consolidation
3. Setting up above the moving averages
Below are some examples of setups I look for
You are now looking for a chart that is setting up in a tight base with a tight pattern forming
The goal is to find names that are either just breaking out or about to breakout of tight bases
Use this checklist
1. Tight pattern or base
2. decreasing volume on consolidation
3. Setting up above the moving averages
Below are some examples of setups I look for
The goal is to scan through all these stocks and look for setups that match our criteria
we want to find a few of the best looking stocks and create a watchlist.
By focusing on only a few of the best setups in the markets we can stop ourselves from overtrading and focus on executing our plan.
Less is more.
we want to find a few of the best looking stocks and create a watchlist.
By focusing on only a few of the best setups in the markets we can stop ourselves from overtrading and focus on executing our plan.
Less is more.
A name that caught my attention on my scan: $RKLB
The stock is setting up in a big daily base
Moving averages are catching up
leading theme in aerospace
volume decreasing in consolidation and increasing in expansion
relative strength to markets
The stock is setting up in a big daily base
Moving averages are catching up
leading theme in aerospace
volume decreasing in consolidation and increasing in expansion
relative strength to markets
5. Entry
The easiest way to enter is to find a trigger level for the breakout
What I look for, is a previous level of resistance that price has rejected multiple times
In this example, you can see the $50 price level has rejected multiple times
If price breaks over that level, then we can assume a daily breakout is likely to occur
We want to confirm the breakout with lots of volume over the trigger level
The easiest way to enter is to find a trigger level for the breakout
What I look for, is a previous level of resistance that price has rejected multiple times
In this example, you can see the $50 price level has rejected multiple times
If price breaks over that level, then we can assume a daily breakout is likely to occur
We want to confirm the breakout with lots of volume over the trigger level
Entry is taken on a break above the trigger level
For confirmation, we want to see high volume on a break out of the base.
For example $SMR recent base breakout:
-Leading stock in nuclear theme
-Breaking out of a tight daily base
Enter long at the break above the the trigger level
For confirmation, we want to see high volume on a break out of the base.
For example $SMR recent base breakout:
-Leading stock in nuclear theme
-Breaking out of a tight daily base
Enter long at the break above the the trigger level
We can use the 5m time frame to confirm our entry.
First 5m close above our level triggers long entry.
First 5m close above our level triggers long entry.
Stop loss is placed on the low of the daily candle that broke trigger
to make sure that we manage our risk in case of a failed breakout
there is no 100% win rate strategy every strategy will have losers but this strategy is meant to keep losses small and winners big
you must respect your stop loss.
to make sure that we manage our risk in case of a failed breakout
there is no 100% win rate strategy every strategy will have losers but this strategy is meant to keep losses small and winners big
you must respect your stop loss.
7. Targets
Take profits at previous resistance levels
If price is making new all time highs, use Fibonacci levels to scale out.
My scale out strategy is 25% of the position at a time and moving up stop to break even after first trim.
after third trim you leave runners with a trailing stop at 8 EMA
Take profits at previous resistance levels
If price is making new all time highs, use Fibonacci levels to scale out.
My scale out strategy is 25% of the position at a time and moving up stop to break even after first trim.
after third trim you leave runners with a trailing stop at 8 EMA
This sets you up for a huge r/r trade
for breakouts we do not want the stock to comeback to our entry level
the strongest stocks will lockout traders and keep running
this is why this scale out strategy works so well to hold winners
for breakouts we do not want the stock to comeback to our entry level
the strongest stocks will lockout traders and keep running
this is why this scale out strategy works so well to hold winners
This works best when markets are very strong and setups are firing(above moving averages)
Always listen to the markets
Always listen to the markets
Like any other strategy this is not a holy grail strategy but there's a reason why some of the best traders in the world swing strong names, and buy leading stocks in leading sectors.
I've personally used this strategy to catch:
$CVNA at $20
$HOOD at $15
$PLTR at $40
$JOBY at $9
$RKLB at $8
And many more big winners
I've personally used this strategy to catch:
$CVNA at $20
$HOOD at $15
$PLTR at $40
$JOBY at $9
$RKLB at $8
And many more big winners
I post these setups every night on my twitter with trigger levels, option contracts, and targets.
So you can follow along, and learn the strategy.
If you enjoyed and learned something from this thread LIKE+RT❤️for more trade plans and educational threads.
So you can follow along, and learn the strategy.
If you enjoyed and learned something from this thread LIKE+RT❤️for more trade plans and educational threads.
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