Charting Patterns That Show You The Money

Charting Patterns that Show You the​ Money!
The Time is​ Right: With the​ Fed lowering interest rates and setting a​ good tone to​ the​ markets along with earnings season coming up next month,​ there has never been a​ better time to​ learn to​ read price charts to​ pinpoint the​ best entries and exits for your trades.
When you know how to​ correctly read price and candle patterns you can identify the​ beginning of​ the​ next big wave and the​ most profitable entry for your trades .​
The price graph will also give you clues about when that wave is​ slowing down so you have time to​ tighten your stops and maximize your returns.
The markets today are providing us with great trading opportunities .​
The positive reaction to​ the​ interest rate news sent stocks skyrocketing,​ which made for some wonderful trades if​ you positioned in​ early .​
Many of​ those stocks,​ however,​ are due for a​ pullback .​
And what a​ perfect time to​ be trading because once you learn to​ identify the​ typical pullback,​ or​ retracement patterns,​ you can use those to​ enter trades before the​ next big run into earnings.
Here's An Example:
A pattern that we​ usually see before a​ stock makes a​ run into earnings is​ a​ rectangle .​
a​ rectangle pattern is​ created when a​ stock moves up and down in​ a​ small range for a​ short period of​ time .​
This type of​ consolidation is​ more of​ a​ sideways move,​ during which time the​ stock doesn't loose much of​ its value,​ but the​ options do become cheaper as​ the​ volatility decreases .​
An example of​ a​ recent rectangle is​ a​ trade we​ did in​ the​ two day Technically Speaking Workshop during which we​ bought calls on​ Freeport (FCX) .​
This trade was done because the​ stock had just broken out of​ a​ rectangle pattern and,​ as​ you will learn in​ the​ Technically Speaking Workshop,​ we​ teach entering trades on​ the​ first or​ the​ second day of​ the​ move.
This trade was based on​ a​ contingency order at​ $92.50 on​ the​ Breakout Entry #1 seen below .​
This teaching method allows you the​ flexibility to​ trade as​ an​ end-of-day trader so you don't have to​ be tied to​ your computer .​
The first entry was one that was triggered while unable to​ watch the​ markets .​
On the​ second day,​ there was an​ additional entry above $93 as​ the​ stock opened up outside of​ the​ rectangle .​
That is​ Breakout Entry #2,​ and is​ the​ pattern used to​ enter the​ trade in​ the​ Technically Speaking Workshop .​
As you can see below,​ FCX has rallied to​ a​ closing high of​ $108.67 - almost a​ fifteen dollar rally since entering the​ trade!
Another Example:
Another pattern that you might see as​ stocks pull back from the​ recent rally is​ a​ Flag pattern .​
This is​ similar to​ rectangle but one that is​ tipped on​ its side .​
With this type of​ pattern the​ stock pulls back in​ price and gives a​ better entry price into the​ trade .​
DryShips,​ Inc .​
(DRYS) formed just such a​ pattern this month as​ it​ retraced about ten dollars before heading to​ a​ new high .​
Below,​ you see the​ Flag pattern outlined in​ blue with the​ Breakout Entry #1 around $71 .​
The second day provided another opportunity to​ enter the​ trade at​ around $75 before the​ stock rallied to​ a​ new all time high of​ $81.65 (at the​ time of​ this report) .​
Depending on​ what day you would have entered the​ trade,​ this has been anywhere from a​ six to​ ten dollar upward move in​ the​ stock.
When you can properly identify pattern such as​ these and more you will have the​ skills needed to​ correctly read a​ price chart to​ determine when the​ retracement has ended and when you should enter a​ trade .​
That is​ how you enter trades near the​ beginning of​ the​ next big move.
Charting Your Way to​ Profits Online Classes.
Learn more about how to​ read price and candlestick patterns to​ enter the​ right trades at​ the​ right time and earn maximum profits.
Markay Latimer with Better Trades

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