One of the reasons I’ve been able to score more than $2M in career trading profits has been my disciplined approach to trading.

It starts the night before with my watchlist that I send out to clients every night. 

My watchlist consists of stocks that are “technically setting up” for a move higher.

I’m looking for repeatable patterns that have proven to be winners. 

That said, we’re going to get right into things and take a detailed look at some of the stocks I’m watching for this Tuesday, June 18, 2019.

 

How to Develop A Bulletproof Trading Plan

 

Now, having a watchlist is key when you’re trading stocks. You see, there are thousands of stocks out there, and if you don’t know which ones to look for… you can miss out on some opportunities.

That’s why I like to scan for stocks exhibiting my favorite setups.

For example, one of my favorite tools to use is moving averages… whether it be using them to spot trend reversal, key areas of support and resistance, what have you.

 

Tetra Tech (TTEK)

 

One stock that recently came up on my radar is Tetra Tech (TTEK).

 

 

On the daily chart, you’ll notice that the black line (3-period exponential moving average (EMA)) and blue line (8 EMA) crossed above the pink line (the 20-period simple moving average (SMA)).

Now, when we see those lines cross above the 20 SMA… that tells us the stock is bullish, and it may be time to place a trade.

In fact, I actually write out a plan for the trade.

 

Having a plan is extremely important because it allows you to manage your emotions. You see, when you have a plan, you know exactly when and where you should buy a stock… stop out if the stock goes against you… and where to take profits.

 

Soliton (SOLY)

 

Now, another stock I’m watching is Soliton (SOLY), based on the same pattern.

Now, you can see the stock had a nice run up… then the 3 and 8 EMA cross above the 20 SMA, which is a bullish signal. Not only that, the stock pulled back in to a support level (an area where the stock has had a hard time breaking below).

This is what we call the bull flag / bull pennant.

I’m looking to get in between $16.76 and $17.25, with a stop loss at $15.64. In other words, I won’t enter the stock until it gets into that range. Additionally, if the stock moves against me… I won’t be changing my stop price or try to average down.

Additionally, my first profit target is $18.23, and if it gets there when I’m long the stock… I’ll look to take some profits off the table. Thereafter, I’ll take profits if it gets to $19.36, then $21.14. Keep in mind, if the stock does get to my first profit target, I’ll trail my stop and move the price higher.

Why?

Because there’s no point to turn a winner into a loser.

Moving on.

 

Perspecta (PRSP)

 

The last stock I have a detailed trading plan on my watchlist is Perspecta (PRSP).

Here’s a look at the daily chart in PRSP.

The last stock I have a detailed trading plan on my watchlist is Perspecta (PRSP).

Here’s a look at the daily chart in PRSP.

Now, with PRSP I’m actually using the 8 EMA as a support level.

You see, when were isn’t a clear support level on the daily chart (a clear area where you can draw a horizontal line, indicating the stock is having a tough time breaking below)… you can use moving averages.

Similar to the horizontal support lines… with moving average support lines, we want to buy as close to that area as possible… because if there is demand for the stock at those levels… chances are the stock could run up.

With PRSP, I’m looking to buy between $23.01 and $23.19.

I’m looking to stop out below $22.69 (that means the stock is breaking below the 8 EMA and my thesis is broken).

If the stock moves to my favor, I have three levels where I’m looking to take profits: $23.56, $24.31, and $24.95.

Now, I’ll be alerting my clients in real-time about my trades and thoughts on the stocks… if you’re interested in receiving alerts, gaining access to the chatroom as well as hours of video lessons on the markets, click here to get started.