I'm often asked how do you find trades and when you do what do you look for? There's a couple ways to answer this question but the most common answer I give is "It depends". I know that's a generic answer but the beauty of trading is there are several different ways we can trade. Some of us like swing trading, some are day traders, some like leaps, some like earnings plays, some only trade ETFs so the most important thing is to figure out what you like and ask yourself "What kind of trader am I?"
From the people in our community I would say most would fall under the category "swing trader". Most like to hold a position 3-7 days. So if I wanted to find a stock that I could trade and it last 3-7 days how do I go about doing so? There's a couple ways so let's break it down.
COST is within the 10% of the all time high. Does it have a pattern?
We had a wedge forming and looking for a breakout. What about the squeeze? Can we see if it is bearish or bullish and predict the breakout?
We are in a squeeze but are we bullish? We can say we are bullish just because we broke out of a wedge but look at the momentum histograms. All indicate we are bullish? Let's take a closer look and let's look at the chart with candles that match the squeeze histogram.
Now do you see the momentum shift from the squeeze? This indicates the bullishness. Now I see all this but what about the fibs? Show me your fibs!
Before using the squeeze I would enter at any of the candles that were above the 78.6% level ($194.72). I probably would not have enter on a red candle but a close above would be valid to get this to what we call in our room "the cheat code". Our members have unlocked the cheat codes! With the squeeze in play, now I can wait for a better entry looking at the momentum histogram and understanding how the squeeze works. If you notice, i'm not using the wedge breakout as my entry. It's great to have this pattern but let's add other technicals to get the most precise entry we can. So now we have an entry point. What about short term targets? Can we get to our main target of $206?
As you can see after our entry, the very next day we hit a short term target. We still have a higher target at $206 but I did take some profit today. You can see the 193 were as high as $10.55 a contract and the 203s where as high as $4.13 a contract.
The squeeze has still yet to fire and we still have room higher and plenty of time using June monthly options. A good more in a day so far but hopefully this gives you a better understanding of how I look for a trade. To join our community you have two options:
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Last week we looked at ADBE as our trade of the week. We had a target of $240 and we hit $243.34 to be exact! So what made this trade work so well? Let's just check out the charts and let them tell their story!
My favorite trade set-up is the cheat code set-up. Add the squeeze to this and with a stock near the all time high, the probability of the trade working gets higher and higher. Not sure what we mean by all this? Join our community today and watch and learn beside professionals.
The trade of the week is Adobe (ticker symbol: ADBE). Some of the traders entered on Friday and some yesterday. Why am I just posting this now? Well I cleared my portfolio last week and I usually don't trade options on Monday to get a clear market direction. I used a custom scan to find plays that are in a bullish squeeze and within 10% of their all time high. Here were the results:
What made ADBE so enticing? The chart of course. Looking at the chart below. Some entered the trade off the 8EMA on Friday. Others entered after the 78.6 broke on Monday. The great thing about a community of traders is that everyone method is a little different but the charts are all the same. What works for you? That's something you can decide and you gain insight from several traders inside our chat. Let's take a look at the chart.
You can see we are above the moving averages and fibonacci lines. We have a target of $235-$240 and looking a directional calls or a put credit spread. I entered into a put credit spread already and looking to buy directional calls to go with it. To see exactly what I'm looking for, JOIN TODAY and receive our Signals room along with our King-Chat and Earnings rooms.
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Today at the open, I was watching the market internals and price action patterns and wanted to see if we could scalp a quick 5 points on the S&P 500 back to yesterday's low. From there I wanted to see rejection and possibly lower. Hindsight is always 20/20 and I completely goofed on this trade and it cost me $1,800 in about 25 minutes! Let's take a look at what I saw and what I did wrong and if I could turn it around.
This is what the chart looked like at the time. We hit a low point and looked to reverse. If I were to follow my rules, would it have provided me an opportunity to scalp this back to yesterday's low? That was the idea and let me show you what needs to happen and what I ignored.
What happened next?
After entering improperly the market reversed and I need to look at risk/reward and whether or not the trade makes sense and if my stops are too tight or too wide. In this trade, the reward potential was around $300. If I put my stop below the last pivot, I could've had a loss of around $500. So a decent risk/reward. However, I used a wide stop that but me at a risk of around $600. I entered into a 3 lot position and got smoked!
Ignoring the obvious
After the tight stop area was hit, we consolidated, went lower, retested over that spot and fell again. I completely ignored what was going on here, hoping to get back to break-even or eventually hit my target. Once my stop was hit and I took an $1800 loss! I could've cried and curled up into a ball but instead, I looked for another opportunity to turn things around. Not revenge trade but to follow the rules when the next setup took place. It wasn't too long after that and at the end of the day I'm up $400 which is typically my daily goal to pay my bills.
What was the play?
Our community of traders, several were short the SPY, QQQ or futures, whatever they trade. The set-up was obvious. Remember that 78.6 level earlier? That was clue #1 that we were headed to the cheat code at 127.2. I even had that as support level in the chat. I quickly entered into short positions in the /ESM8 and /NQM8 to recover and we hit the target at $2592. The bottom tick was actually $2591.25. My bad for missing it by 3 ticks. I could have looked for another reversal opportunity higher after this but being up my daily goal to pay the bills, I called it a day. Of course hindsight again shows that the reversal was there off that level and we could've played both ways! Look below where we hit our target lower after failing the 78.6 and reversed. This play has been money on futures lately but I was too blind to see the bigger picture this morning and it almost cost me! Hopefully this helps in not what to do when futures trading! Any questions please leave your comment below.
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The trade of the week this week just reported earnings and here are a few highlights:
The stock is currently down $9.05 (6.5%) and was down another $6 at one point today. So what gives? Who cares, let's look at empirical evidence over the last year to plan our trade and trade our plan.
What stock is this?
Given the information above, which would you rather trade on? Stock performance after earnings report or data that is on the chart? The stock in question is Shopify (ticker symbol $SHOP). What I'm looking for in SHOP is a play to collect premium from the stock while having a bullish sentiment. The best play for this is a put credit spread. This particular trade over the last year has had 4 wins and 0 losses after earnings. Had a total return of $3665 (60%). To learn more about this trade you need to join our community today. CLICK HERE TO JOIN NOW. If you follow me and DM me on Twitter or Instagram, I'll knock of an additional $100!
Here we are, April 30, 2018 the last day of the month. First 4 months have been a blast to trade. The ups and downs and yet we are all still here! Before we start the summer trading season, you know when they tell you to "Sell in May". Let's take a look at what potentially lies ahead.
All eyes this week are on Apple earnings. Did you know that Apple (Ticker Symbol: AAPL) makes up nearly 11% of the QQQ ETF and 3.68% of the SPY ETF? I'm expecting to play it quiet today ahead of their earnings announcement after the bell on Tuesday. We have several names announcing this week and we posted a chart from Earnings Whisper in our room and you can view it below. In fact, I wrote a code for our members to add to their watchlist so they can see how many days until earnings and no more looking it up. Now of course our community of traders are always on their toes and update each other on earnings events and opportunities at hand when it comes to our favorite earnings trades. Check out this weeks earnings below and the code that all of our members received to add to their watchlist.
So what does the week have ahead? We've already seen a great report out by McDonald's that go the DOW moving and AAPL pre-earnings is moving. The $tick are calm but let me show you a few charts I posted for our members to give you an idea of where I think we're headed to.
Now that the morning session of trading is over (I only like to trade to the European close), let's take a look at where we are from the charts I posted above as well as a some trades I've taken.
Here's $400 on oil and $400 on S&P Futures. Oil trade last 7 minutes and the S&P futures trade combined was about 13 minutes. 20 minutes of trading, 3 trades, $800. You may say you hate Monday's but I love #MoneyMonday
On the S&P Futures, I had the $2665 area as support and that's where we currently sit. We break we can see $2757.
Gold chart I want the gap fill and then bounce. We filled the gap and have since bounced 6 points higher. That's $600 per contract!
Nasdaq update has lower to go and I'm target 6600 area. Possible 6575 and it's playing out as planned too.
Someone tells me, "I'm a bonds guy. Using the squeeze and Fibonacci with the bonds has been a great play today. Check out the chart and the trade off my entry".
In fact, the month of April has been great success. Look at a few of the closed trades this month. The average risk has been about $280 per trade and we're a little over $3,400 in total profit. I still have positions on in eBay, SBUX and GRMN. I will hold these over into May.
We are currently offering a discount to our community and you can join by CLICKING HERE or at the top of the blog. With this membership you get the following:
If you missed the 3 opportunities to trade AMZN pre-earnings that has had some incredible results then you don't want to miss out on the next opportunity post earnings. Our community is killing it with these pre-earnings trades and if you want to see for yourself, then JOIN NOW! Sale ends April 30, 2018.
Just look at the result from one of the traders. The beauty of the community, he shares his ideas. He's up $40k since January 1 doing earnings plays only.
Before we get into the post earnings play let's take a look back at the results from some AMNZ trades that were done pre-earnings over the last year. Results don't lie.
Looking at the chart above we have several bits of information for us to be able to use. The chart has information from the past 2 years. The candle that is highlighted is the day we entered on this particular trade that have returns of over 768% over the last four earnings. What does the data from the chart tell us?
Without drawing Fibonacci retracement or extensions or thinking I have some sort of proprietary post-earnings strategy that is a big trade secret, I'm simply going to look at empirical evidence on how this trade has worked successfully 8 out of the last 8 times. 50% return on investment when you combine all 8 trade totals.
This chart shows the past 2 years of data. You can see that the average 30 day move post earnings went up 6 times and down 3 times. The average move up is 10% or $148 and the average of the 3 moves down were 4.5% or $66. If we look at the current price of AMZN ($1464) and what a 20 delta is ($1330), the average move down keeps us well within our range.
I did an entire members blog post on the aerospace and defense sector and what I was looking at when it comes to the charts and multiple squeezes across the biggest names in the AeroSpace and Defense sector. The same set-up happened in the financial sector in January 2018 and again recently in Oil Stocks. Look at the squeezes when on XLE and the top 10 oil names inside. Notice how most all of them have already fired long. (New members receive this custom squeeze indicator)
When this is the case we like to look at those sectors ETF's and the top 10 holdings. You can choose to trade XLE, Oil Futures (we've been long since $65) or some of the top 10 names in XLE. Click to download our XLE Watchlist for Think or Swim. This has the top 10 names inside the ETF. The knowledge of our traders inside our community knows how to trade the ETF (I signaled XLE long calls) or to look at the individual names inside the ETF and which one has the best looking chart. A few names popped out and several of our traders including Devon took Valero Energy Corp (symbol:VLO). Let's take a look at the chart below.
Do you see an opportunity here?
What do you see when you are looking at this chart? We see an opportunity! Let's break it down a few charts at a time.
Plan the trade. Trade the plan.
From start to finish we have to plan our trade and trade our plan.
The chart setup is there so let's continue with out plan.
Here is another trader that has started scaling out who purchased these calls at $1.55 and has 1 runner left. That's a 200% return if you can't read it. Another oil name, this trader is up 100%. Remind me again of the gains you're getting with penny stocks? Great trade by everyone in the room. I love this group of traders and so will you!
**UPDATE April 16, 2018**
We have hit the target area on this chart. See below!
**UPDATE April 18, 2018**
VLO hit $108. We had a trader buy his options at $40 and sell for $200.
I want to throw in a quick look at NFLX before I tell you why you should join today. It's earnings season and we have had some great earnings plays in Q1. One trader was up $28k in that time. We've already jumped on Q2 earnings and it started off with Netflix. Some said to short it as it couldn't break $300. We didn't believe it because again, we saw an opportunity. In two days, Netflix went from $304 to $317. Most of us bought in on April 2. Look up the price on that day and only our members know why we bought when we did! If you missed that we bought more at $300. You do not want to miss out on this earnings season. The big names are in play and there's still time.
Why you should join today?
JOIN TODAY! Chat rooms are great for learning tactics. Having a chat room helped me with was the mental side of the game. Being able to talk to other traders whether as a whole or in private. When emotions get involved, we end up doing a lot of stupid things. Trading alongside Professionals everyday can help that. You’ll find people that you’ll begin to respect. You’ll see various techniques and can apply them to your trading style. You can emulate those that you like or share your style if you can make it easier for others to understand. I told our chat community yesterday that several new things are coming from a new platform to automated trading. Only those within our community will be able to get access to this first. We take care of each other in there. No egos, no one guru and we want everyone to succeed. Our motto is "TEAM WORK MAKES THE DREAM WORK". We’re going to have TONS of traders and a huuuggge, interactive group of smart traders…
AND WE WANT YOU!
Here’s what you get:
I'm not a huge fan of buying options on Monday but this chart looks great on a daily, weekly and monthly chart. I'm jumping in and while we do have earnings this week, let's see if a run into earnings can boost our position. This position isn't based on earnings but can only be thought of as a plus.
You can see the momentum has clearly shifted to the upside and if we can continue and clear the first hurdle of $59.50 and hold. I see a first target of $61, second target of $62 and max target of $64.50. To see how I set up this trade make sure you join our community today. The alert will be sent in our signals chat!
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