NVDA triggers market gap up! How will market react to CPI? Trade ideas for Tue Jul 15
What's stopping you from making 200-500%? Stop overtrading, and make more in less time. Read on to learn how I do it.
Good morning!
I hope you all are focused on good trade executions over being in a trade. Before I get into yesterday’s action, let’s talk about what is a good trade. IMHO it is a trade where on can extract profit where the combination of probability of win and reward outweighs the probability of loss and the loss consistently over time.
So given that. What did we have yesterday? My favorite patten in SPY. A 2 level gap down reversal. Win rate over 80%. So what should one do?
SPY/SPX
Morning trade setup - As I wrote earlier we got a 2 level move down and so I planned a long. with an SPX target of 6270 and a SPY target of 624.8-625
So let’s evaluate the pros and cons of /ES, and SPX 6270c based on the 2 level move.
/ES. one can enter at a given price and take profit and targets hit. with stops set below and walk away.
SPX 6270c gave multiple dip buy chances at 1.50 and gains from 100-300%.
But if you kept at it, the decay eventually killed the trade. The hard part is predict that 1.50 will hold. and where to sell. Using edge trade planner I had 3.20 and 4.30 as my rough sell targets. but when the pull backs came, should you go back in? AS long as trend holds, yet.
The key difference between the two, is one was fire and forget, while the options gave multiple entry chances with 100-300% gain chance. With /ES you have to focus on the R. so using 8points of risk we got about 2-3R. roughly the same reward but with only 1 maybe 2 entry chances.
I’ll continue to evaluate and for those with smaller accounts I’ve been testing prop firms to see how to best execute with their rules.
Overall summary of the day was that the action fell in line with our process perfectly and gave us the win predicted win. There wasn’t a whole lot of trading to be done. Just plan, execute, take profits and walk away.
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.
Thoughts from Mon price action:
SPY gave a perfect gap down reversal setup as expected after backtesting 620
Overnight NVDA/china news has trigger a rally in the market
BTFD bias imho continues until 619 breaks.
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 Tue Jul 15
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
Fair size gap up on SPY into new highs overnight with after CPI action trigger a new high. The question for us is, will the gap hold, how will we profit from it.
Here is my plan