Textbook Trading – Notes and Review of Chapter 5 – Red/Green & Long Trades by @investorslive

Table of contents:

Summary:

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Summary:

Another chapter that I picked a lot up on. I’ll admit being so short biased through the years, the first time I watched this a year or so ago, I just kind of glazed over the “buy setup” chapters. Because of that I’ve been annoyed while reading IU scans or seeing in chat about how to buy into long setups and not understanding the terminology. Of course that annoyance was self induced for sure.

intro

The most common IU long setups which have not been already covered (ABCD) are:

  • Anticipating Red to Green
  • Week Open/Stabilize and Perk
  • Morning Washout on Bullish Chart
  • Morning Washout on Bearish Close

Nate does a solid job of explaining these, and I finally “GOT” a lot of them. Not saying I’ll trade them well, but after this chapter I feel much better about my ability to recognize them as well as scan for them.

The last chapter covers a setup I may never trade, but I know lots of guys love these setups and always want to trade them. Thats “the chase” I know its possible to make money chasing MOMO stocks, but fuck, I’ve never been able to. The best part about this section though is Nate goes over a structured way to chase. And gives solid tips on how to formulate a chase plan. ESPECIALLY focusing on using chase size for entry and only adding to winners.  Probably the biggest reason chasing never works for me is a size issue. I get shook out and ultimately the trade works.

Chase

This was a solid chapter and I feel I got great value out of it. Its borderline embarrassing that I have been an IU member for 7+ years and probably read damn near every nightly scan but I still did not understand a lot of these long based setups. We’ll see if it pans out, but I feel like I am a better/more versatile trader after viewing this chapter.

review

Notes:

 

Longs
     -Gearing perking – Chapter 4
 Anticipating red to green
          Must be in play prior days, big price big volume
          needs to be on radar
          look for magnets
          sell into pops – usually partial
Make sure you have your Previous day close indicator on – R/G
Good for early trades, after the big pull ends
Tightening wedge
GOOD LESSON FOR SHORTS too- if you get a pull do not wait around if it grinds back towards R/G, COVER
Weak open/Stabilize and Perk
Solid daily chart, but weak on the day
Dips are bought on daily
Trend on daily, try and exploit that intraday
Higher lows for entry, with LOD as stop loss
     -With anticipation of Red to Green
Morning Washouts on Bullish Chart
     –Solid close prior day
     -pull into open (profit taking)
     -wait for washout to set risk, then wait for higher low trend
 
Morning washout on Bearish close
     -Bullish chart that gets hammered hard previous day
     -Buy into panic, hard but it works
     -Washout = a true emotional breakdown, not a fade
       -Want a gap down and hard pull
     -Avoid bad news/earnings, focus on profit taking
Chase, when its ok
     -biggest lesson is to use “chase size” and add to a winner, don’t go to deep on entry
     -MUST have a plan
     -Good use of “former runners”
     -gap up with volume – VOLUME important
     -Always scale in

 

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