4 days of range/trend on SPY! Does it continue? Trade Ideas for Wed Aug 06
Study today's blog to learn how I enter, scale up and size down to consistently collect over 200% gains.
Good morning!
I was definitely not expecting a full bounce reversal to develop yesterday so I didn’t get long until the late afternoon presented a good risk/reward setup.
I was pretty sure about where we would not clear and so took SPX 6330/35 bear calls for 1.20 which ended the day at 0.
Alerted SPX 6325 calls for $1 which hit $7 and sold for $5 for 400% gains. good enough for me.
Let’s review the aciton.
SPY/SPX
Morning Setup: PreMarket High REJECT and Key level 632 reject
This play was text book. Yesterday I wrote I was looking for the reaction to SPY 632. Given the premarket action and the gap fill/632 support break from last week, I had a short bias.
Remember my goal is too conisistently collect 2 level moves and a 3 level move being a bounce.
Please review the execution process on SPX 6300p. I took starter. Then added on confirmation. then sold 50% to make it essentially risk free. Locked 80% on the 630 dip at 7 stoped at 6.
On seeing the 9ma rejected, I reloaded at $6 so I can hold for the 629 level. I then locked 100% at $9 for a 50% gain on the reload.
Finally when I saw 629 breaking and potential for 625-627s to come I reload chase size using 20% position. I gave it a chance to get to $20+ and break the 3rd level and continue, but on crossing back over the level stopped out at $15. another 50% gain+ essentially 400% gain from the original $3 entry ($3→15)
What does this translate to?
MISSION ACCOMPLISHED.
This imho is the easy money trade. I don’t need to catch or participate in the chop that came after this move. ITS A GREAT WAY TO LOSE MONEY
If you missed the first entry, you, there were 2 additional opportunities to enter and make 50-200% profit!
Focus on process and consistent execution and collection of profits. Don’t worry about how much you make or could have made. That is for process improvement not regret.
This setup has 86% win rate for collecting 100-200% on a 2 level move. I still sell size down knowing that to de risk. I’m content with that, Others are game for all or nothing. You need to find what suits you best.
Regardless focus on consistent wins!
I said I would return at 2pm and sure enough we got another trade setup…
Afternoon Setups: Double Top Lower High (Retrace Exhaustion)
This was a beautiful trade setup. I was positioned right, got stopped by raising stops too soon, but then jumped right back in when the planned trigger to scale up happened.
The trigger… break of SPY 629.80
Upon reaching the level below, the contracts hit $13. I was no longer in it. I was content securing gains over 200% from $3.
Are you noticing a theme here? Observed pattern/trigger for entry. Securing Profits. Rinse and Repeat!
At this point. I’m done for the day. Essentially two 1-hour windows of trading. Mission accomplished!
There is massive opportunity in this market. Are you taking advantage? Literally have planned and alerted trades that pay over 300-1000%! You will need patience to wait for entries and the exits. But if you have self discipline or trust bracket orders, my process can help you get the results you want.
What is Two Hour Trading?
Two Hour Trading is my system for finding and executing trades while spending less than two hours a day trading. My goal is to earn 100-300% on the capital I risk while waiting for 1000%+ gain trades to set up. Key benefits include:
High-quality trades with excellent reward vs. risk
Avoiding overtrading and losses from it
Trading to win vs. trading not to lose
Stacking the deck in your favor
If you are busy and want to see my commentary and ideas in real time consider joining THT-PRO.
Education
How to Join a Strong Trend
The process I typically follow for joining a strong trend are as follows:
All day grinder: join on dips to 20ma
Multi-day grinder:
Join either on support test of morning lows or failed breakdown reversal at key level
Join at VWAP mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
Systematic Profit Taking
How do I take profits? I keep it relatively simple. Depending on the entry and range to the next levels I typically with take profits 50-100% of my profits at 3-10R and then raise stops to above entry with a goal of letting runners take me to the next level or 2 and to then reload if I believe we are consolidating before the next leg.
I then repeat the same process on the reload.
Securing Profits on Options overnight
Sometimes you get this massive paper gains overnight on options but you can’t secure it right? Well if you have a big enough account and a margin account if you have calls you can. What you need to do is buy or sell the stock overnight. and the option turns into a hedge against that position essentially securing your profits.
Trade Ideas - Plan for Wed Aug 06
Stick to process. The process and trade setups I teach works. Rinse and repeat over and over again. There will be losses. Any good system will have them. Being systematic also means the gains will repeat and come again too. If you keep changing your system/process trying in an effort to never lose a trade, you will never get to where you want to go.
Ideas
Overnight SPY back tested the intially Monday’s close and failed.
Overall the levels continue to be somewhat precise and offering 2 level moves. One thing I am worried about is that after 3-4 days of range will today turn into a consolidation day where we stay pinned within 1 level after any early moves? Watch for multiple crossings of vwap to indicate its a consolidation day.