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Today we take a look at a ticker and ‘outline the story.’ After polling the room we see that 99% of us would agree this is a nice short trade setup. Clay doesn’t show what ticker it is but we come to find out it’s from a forex pair further proving that A CHART IS A CHART and can be traded like any other product.
We then look at AVGO on an engulfing bear alert. After we find out everyone’s orders and stops we see that it immediately rubberbands through the entry and stop loss. However, we don’t need to completely give up on this ticker and we wait to see if there is another opportunity for us to trade. After we plan our second trade plan we get another wild candle that stops out most people but this opens up the conversation into logical stop loss location and entry. For those who were in the trade we talk about how and why we don’t believe in ‘profit is profit’ and allow trades to run to their own conclusion. This trade is a great example of why that is. Trades can keep running much further than we believe. The only thing we can control as traders is risk. These trades that run pay for many many small losers.