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Clay takes a look at a SPY setup starting with the 5 min time frame. We discuss reasons why it looks like a valid short trade and where we would set our stops and targets using RvR. This is a good example of even when you get stopped out for a small loss you don’t need to give up on the ticker. 5 minutes after you were stopped out SPY provided another entry that more than paid for the small loss.
We form a trade plan in a relatively beaten up stock. The students were polled to see which direction they would trade it. After forming logical locations for a stop and ideal targets for both long and short trades, we see that the trade worked out in the longs favor. Clay then analyzes the pain undisciplined shorts would feel had they not closed their position.
Clay takes a look at AMBA on the 2 minute time frame. After looking at the moving averages and determining that the trend is up, we set our stop and target using previous support and resistance. Clay discusses the intelligent way to scale out and allow yourself the ability to capture home run trades.