Market gapping up again ahead of Powell testimony. CPI tomorrow and PPI Friday. Do we see 560+ this week? Trade ideas for Wed July 10, 2024.
Being patient for entries is essential and credit selling on consolidation days can be a winning strategy. Learn how...
Good morning traders!
If you haven’t learned to use the levels and being patient for entries read on to the reviews today. Trading should becoming boring for you, its why I’m working on an algo to do what I do. My trading is very process driven and given high chance of consolidation action, I chose to look for our standard “base” hits that many consider well don trades. What do I mean by that? I want to lock in majority or all gains at 3-5R. or 3-5x whatever my risk is. This creates high probability account growth and is perfect for potential consolidation days.
Tuesday’s Recap and Trade Ideas for Today
Let’s review Tuesday’s trades and explore some ideas for today. We had a monster credit selling trade and handful of 3R+ or 100% gainer trades.
Struggling?
Take time to review past blog posts and learn the processes and core trade setups I use. Patience is crucial. Don’t force trades; enter only at or near key levels with enough range to the next level to offer a great risk/reward opportunity.
Introduction (for New Readers)
Welcome to my blog on Two Hour Trading—your daily source for market insights and trading opportunities. Here, you’ll find comprehensive market analysis, educational lessons, and trade ideas to help you excel in trading, all while spending less than two hours a day.
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NOTE: screenshots from chat are from Edge Trade Planner. A platform available to THT PRO members. Join Us for live commentary and planning. Note my goal is to actively trade less than 2 hours a day finding 1 to 4 great trades a day.
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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
2024 Alert Leaderboard
Here's a look at some of the potential gains achieved through our entry alerts:
July 09 - Credit Sell SPX 5590/5595 bear calls 2.30-2.50 stops at 2.60 ( $2500 premium collected per 5k position risking $300)
July 08 - AVGO 1800c 13( $1300—> $2250 potential)
July 08 - SPX 5560p 2.50 stops 2.30 ( $2500—> $5000 potential)
July 08 - TSLA 270c 4.50 target 7.50 ( $4500—> $7600 potential)
July 03 - SPX 5520 2.5 ($2500—> $18000 potential)
July 02 - TSLA 225c 3.5 ($3500—> $8500 potential)
July 02 - SPX 5500c 2.50 ($2500 —> $10000 potential)
July 02 - SPX 5470 Bull Puts 2.50 ($2500 credit collected)
July 01 - closed TSLA Swing $2.65—> $12.00
**Past Performance is not indicative of future results
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Tuesday’s Price Action (Education)
You don't try to make $100,000 ...You don’t start by saying, I’m going to make the biggest most profitable trade and turn $1000 into $100,000 and fix all my bad trades before.
You say, I’m going to plan and execute 1 trade as perfectly as I can today. You do that every single day, and soon you'll have a $100,000 and likely much more!
Please note all times are Eastern/New York regardless of what time zone I happen to be in.
SPY / SPX
Market is still in full BTFD mode until major supports break. That said, you have to be patient for the entries. Yesterday I wrote I like 555.70 for a long. It took all day to get there but overnight we are gapping up off that level. I suggested using futures and buying /ES 5630 overnight with stops at 5627 at end of day. This morning we are gapping up into 5646. that it $16 gain for $3 risk!
Let’s review my logic for the credit sells. SPY 557.50 is roughly SPX 5595 per the levels above. So as I wrote that I liked 557.50 as a possible short spot I wanted 5590p puts for 2.30-2.50. I should be able top stop out if wrong around 2.60, with a worst case of a stop at $5 if we ripped over 5595. Basically worse case scenario is risk 2500 to make 2500 but likely risk $300 and I have an 80%+ win rate. so we set orders in advance. Even if we ripped to 5595, the first test would like reject and give a flush back under 5590 for an exit around $2. As you do more credit selling, you build the experience to project what the contract prices will likely be at what price levels. That is how I was able to predict a t 2.30-2.50 fill when I alerted the idea and the contract prices were around 1.60.
The reason I like credit selling is I can usually place the bet and either it works or it doesn’t. I don’t have to watch every candle, I’ll know near end of day if right or wrong. ON consolidation days premium can bleed out fast and even being directionally right you can lose because the premium paid was too much…. So joining the “market makers” game can be a winning strategy.
NVDA
There are 3 patterns to learn here.
Pattern 1 — Gap up and VWAP trend join. One is to first recognize the breakout early and join NVDA calls in morning when VWAP and 130.60 held targeting 133.70
Pattern 2 - 2 level gap up reversal. If you notice the solid blue line, reaching 133.70 was a 2 level gap up. so looking for a short for a reversal/gap fill is one of my goto patterns. I missed the entry on the short so skipped this trade.
Pattern 3 - Join swing trend. Yesterday I wrote how I like to get long near the open on gap ups or near vwap. By reversing engineering where I though NVDA could go by end of week, I established I wanted NVDA 133c (which had a delta 0.30 when I checked Tuesday in premarket) for 0.60 to 1.20. I decide to place an order for $1 while it ran up to $4+ in the morning action.
This is where patience comes is and planning for the bigger picture trade. You don’t need to chase, there are often backtests to fill gaps and to test range breaks to give great entries. Establish your thesis, then spot great risk/reward entries!
I wrote about this in yesterday’s Idea section! This morning we are gapping up over 134. The contracts should be $3+ at the open.
I’ve repeated yesterday’s How to Join a Strong Trend below. see how it applied to NVDA.
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/failed breakdown reversal
Join at vwap mid day or end of day
Keep it simple. Don’t chase, wait for support levels for great risk/reward entries!
Trade Ideas - Plan for Wed July 10
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
Powell speaks at 10am today at tomorrow and we have CPI data tomorrow and Friday PPI data. So the question is will the market continue its rally into these news driven risks. Overall I will continue to BTFD at support [method 1 entry] or after failed breakdown reversal [method 2 entry].
Market is gapping up strongly in premarket. The question is will it be a gap and go or not?
I also look for any 2-4 level moves up for a scalp short.