I have a few main chart patterns that I look to when trading… Why? Because they work time and time again in any market condition.
I call these my bread and butter setups.
One of those trade setups is the Pinball… I run scans, analyze charts, and keep watchlists of stocks that are setting up in any of the patterns that I trade.
Sharing this with my members gives them a clearly defined list of stocks to be watching so they aren’t aimlessly strolling down Wall Street with no direction or end in sight.
With this list, you can keep an eye on these stocks simply watching for a trade trigger… you can even set alerts if you want. And of course, I always send out my actual live trade alerts as well.
The beauty of the watchlist is that you have more trading options available to you… I don’t take every trade in front of me…
And as you learn to trade… you will see things for yourself and you will gain the confidence to take these trades on whether I do or not.
That’s a strength that comes from learning my systems vs. just following my alerts. My systems work and they are simple and intuitive… it won’t take you long to be trading on your own…
Let me show you a trade setup that has been on my member’s watchlist over the past week… just waiting for the final confirmation to make the trade…
Is this a trade I took? Actually, no it’s not…
And that’s my point. There are plenty of opportunities that come from my watchlists that once you get the setups and systems down, you will have all you need to find the trades that you like best. And you will have the confidence to take them.
Let’s dig into this chart setup. Looks like a lot going on there… bare with me as I explain it…
Let’s start from left to right…
First things first, TLRY is in a clear downtrend here.
So common sense tells you not to be buying this stock yet…
Before we even care to consider buying TLRY, we need to see some sort of bottoming.
And that’s exactly what we get after the big red candle on the 10th.
The stock begins to form a rounded bottom and once that has formed, it is added to my daily watchlist so you can have your eye on it.
At this point, now you just watch for a close above the 8 EMA… and we get that on the 17th.
But wait… let’s look at that bar for a second… there is no conviction in that bar, so while you can look for an entry the next day… I am going to wait a little…
Well, I wouldn’t have had to wait long, as TLRY closes above the 8 EMA again on the 21st… and this time it’s a bullish candle.
So what’s next?
An entry… and it’s simple… you are just looking for the stock to trade above the 8 EMA on that next day.
While there are intraday chart techniques we can use to time our entry, such as using the opening range… (you can learn more about that with my service)… you don’t actually have to use intraday charts at all.
It can be as simple as entering a buy above the 8 EMA on the 22nd (the day after the bullish candle closing above the 8 EMA)… and you’re in.
Now you just want to stick to your plan… put a stop in… and place a target order as well…
You can place your stop below the low of the bullish candle on the 21st or for more room under the swing low of the rounded bottom… again, you can learn more about the details of where to place stops with my services.
The target on a Pinball setup like this is the 34 EMA…
But if there is a reason you think it could really run… you can also use that as a first target to take off ½ or ¾ of your position to lock in profits, and then trail the last part.
For example with TLRY, you got in based on a profitable setup… then 2 days later you are at the target… but today you noticed this news:
If you think this news is important enough, this would be a time to take half off at your target… (locking in some profits is a must on a good trade)
Taking half of your position off gives you money to bank… and still leaves you with the opportunity to capitalize on what you think may move the stock a lot more. Win, Win.
Trading doesn’t have to be hard, folks.
It really comes down to having a system that works and trusting that system…
Creating a trading plan for every trade, and following the plan. Keep emotions out of it.
You saw how simple that trade was… as long as you trust your setups and stick to your written out plan, you can make trades like that all the time… and with confidence.
This is a good time to get a system that works, preferably something simple and intuitive, like my Pinball and Rounded Bottom Breakout setups.