In today’s first example we example a gap up that forms a wolf candle. Clay walks us through how to properly structure a trade plan for this type of setup. This is a great example of having to use all the data you have available to make your plan. While the candle was forming provided a good place for a stop loss with an entry triggered by the break of the low, which then followed through very nicely.

In our next example we look at another gap up but this candlestick closer resembles a doji (indecision). We have a good discussion on a proper location to put our stop loss and entry point based on candle sticks and grandma numbers (whole, half dollar). We get close to stopping out but then it moves in our favor. Now we have to determine how we would like to trail our winner. The only way to succeed in the long run is to allow your winners to work for you as best they can every time. You won’t always hit a homerun but they do present themselves.

For this last example we are attempting to jump into a trend so we need to establish logical entry and stop locations. After setting this all up we see that we are instantly stopped out, however, if you were NOT disciplined, you see just how much pain you would be in by not listening to your plan.

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