Current Trading Plan

ADX momentum

Requirements:

ADX indicator is 35 or higher

Daily chart

8 period stochastic needs to close above or below 40 or 60

Stock should be over 50 dollars and volume should be at least 125,000

Trade is valid when it breaks the high of the low bar (vice versa).. Enter immediately.

Can scale in. Get in when it’s still going down (up) and add when it breaks the high of the low bar (vice versa)

Trade manament:

Stop loss is the previous days lows. Trail stop accordingly.

When the position doubles, take half off and use a trailing stop on the rest.

Pay attention to fib levels. (if it breaks high of the low bar, 90 percent chance it will reach 127.2 and 60 percent chance it will reach 161.8)

Use 60,40,8,3 stochastics

NOTE: Trade is also valid if ADX is 35 or higher and fib pulls back to 50%

ALSO: If stock is at 52 week highs and gets a big flush down, it will likely stpend time chopping it’s way back higher. Once it pierces 78.6 fib, there’s a 90 percent chance it will continue to 127.2 and 60 percent chance of 161.8. You need to have ADX over 35 or a squeeze.

Squeeze

Requirements:

In an uptrend, momentum indicator should be above 0, downtrend, below 0.

Buy ITM and OTM options. For ITM options, only risk half of the premium. OTM options don’t need to have stops, just let them run.

If OTM options are bought, spend the same amount on them as the ITM options.

Look at B and C waves, if they are above zero, buy a partial position immediately. When the A wave crosses, add the rest of the position.  

NOTE: think or swim doesn’t have B wave, but that’s ok

Use 8,21,55 exponential moving averages.

For OTM options, premiums should ideally be a dollar or less if possible.

Note: if trading ETF’s, look at the underlying futures

Follow this checklist:

1)      Is there a squeeze?

2)      Is the C wave above 0?

3)      Is price above the 21 period EMA?

4)      Is the next time frame up bullish (weekly if original chart is the daily)

5)      Are the shorter waves (A) above 0?

If trade meets all these requirements, enter with a full position. If 4 out of 5, enter with ¾ size, if it meets 3 out of 5, enter with half size. If 2 or less, pass on the trade.

Trade management:

You can use the TTM_trend indicator. Stay In the trade as long as the bars are still blue and exit when there are two red bars in a row.

Trade shouldn’t end the week below the 8 EMA.

Exit if it closes below the 21 EMA twice.

Note: this is valid on the 5, 15, and 60 minute charts as well.

Note: only buy OTM options when there are red dots in the squeeze.

20 day channels:

If the stock is above the 55 EMA, buy pullbacks

If the stock is above the 55 EMA and the 2 period RSI is oversold below 5 and it’s at or below the 20 day lows, it’s a beautiful entry, enter aggressively.

Note: if the stock is below the 55 day, but the 8 and 21 EMA’s are above the 55 still, it’s still ok for a long position.