More Trading Setups

Exerpts from Mastering the Trade by John Carter

1. Gap Setup

a. Gap must not be too big - most breakaway gap are big gap

b. Premarket volume is low

c. Risk reward ratio - 1:1

d. Target - Gap fill

iw's note: Don't seem to work in current market condition

2. Pivot Points

3. Scalper Buy and Sells

a. Can be use for Intraday or Daily Charts

b. After 3 consecutive higher close, go long.

c. Trade is valid until 3 consecutive lower close

d. For daily chart, stop at the low of first bar

d. For intraday trades, exit at 4:10pm

iw's note: Don't seem to work in current market condition on Daily Charts. More for Trending Market

4. Tick Fades

a. For stocks that mirror index the tick represent.

b. When tick read -1000, go long.

c. Risk reward ratio 1:1.

d. If target not reach within 35 min, sell.

e. Stop out twice in a row -> done with tick fades for the day.

f. If by 12:00 noon tick spent oer 85% below -1000, pass on all tick play.

g. If past 10.00 am and tick have been all negative, wait until the tick spend some time in negative territory.

5. 3:52 Play

a. 3:30 pm market start to sell

b. if at 3:52pm market stop falling and go side way, go long

c. sell at 4:13pm

6. Box Play

a. intraday trade

b. price hit high then hit low, then hit the same high and the same low again (forming a box)

c. once a box is formed, the next time the upperline is breached, go long, OR

d. the next time the lower line is breached, go short.

e. target is the width of the box, stop loss is the other line - risk reward is 1:1

7. Trend Reversal

a. Identify stock making 20-day lows in a Trending Market, mark this Low Bar.

b. Once the price go over the high of this Low Bar, enter market -long.

c. Initial stop is the low of the Low Bar. After 2 days, the target/stop will be the low of the previous 2 days.

8. Swing Plays

a. Daily Chart, place 8-EMA and 21-EMA

b. Once 8-EMA cross above 21-EMA, start sweeping for setup

c. Setup to look out for, a pull back to 8-EMA.

d. Initial Stop, 21-EMA or 4% of price, whichever greater (usually is 4%) - greater as in greater room to drop

e. Once target of 4% reach, shift stop to 21-EMA

f. Target is 8% of stock price.

g. Note: Probability of this setup succeed can be increase if 8-EMA is above 21-EMA on Weekly Chart too.

9. Fake and Break

a. Look at stock making 52-weeks low

b. Look for 7-RSI bullish divergence

c. Look for decrease in volume

d. Long the stock after it close above 52 week low

e. Exit - Below Key Resistance OR once price go below the low of the Highest day