SPY gapping up again. Can it reach 630 this time? Trade ideas for Mon Jul 21
Sometimes staying away or taking 50-150% gains is the way to go. Thinking in terms of win rates vs gains, especially on consolidation days. Learn how I plan in these conditions in today's blog.
Good morning!
On Friday, I wrote I thought the day was going to be a consolidation day and I doubted SPY 630 would come. If anything I wanted a dip to 627. We got exactly that. On top of that action how does one plan a profitable trade?
SPY/SPX
Yesterday I wrote I thought consolidation or a bullish pattern would develop. Why? Because the previous day had a major failed breakdown reversal. I didn’t get the dip I wanted but using the process was able to plan SPX 6300 to come…
Morning trade setup - 10:30 reversal near 627
As you can see 20ma was rejected and the long was immediately stopped.
Later there was a failed breakdown reversal, but based on the action on Friday, I was not confident that a move to highs or higher or even a clearance of vwap would develop so I shifted my attention to other names.
Afternoon setup - Spectre Special
We consolidated all afternoon and give the support holds, I was convince we would get a vwap test by the close.
So I shared this alert:
I wanted a dip to 0.50 but we only dipped to $0.80.. That’s OK. that is why I alerted 0.50 and $1.
If I was right I figured we would be able to sell for 3-5.
Sold 80% for $3 for a 200% gain. Mission accomplished!
SPX 5300c dipped to 0.2 and popped to 0.55 offering a little over 100% gain. sold 50% to make it risk free incase a wild squeezer came. good enough!
Trading is about a numbers game:
Out of the 2 SPX alerts on Friday:
1 failed - 20% loss
1 worked - 200% gain.
COIN and CRCL
Crypto related names put in a blow off move Friday morning. The action in CRCL created high probability sell off opportunity in COIN and MSTR
Let’ walk through what I saw in CRCL:
COIN hadnt’ filled the gap yet while CRCL did. So if it did 425p will be worth $15
Unfortunately I wasn’t patient for $15+. sold last at $10 for 300% gains. But at 15 delivered 500% gains
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 Mon Jul 21
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
We have a big weak ahead and so how will the market position today? That is what I’m thinking about. We have more trade news that could move the market. Nothing interesting on econ data until thursday and a bunch of fed speakers tomorrow.
Over the weekend the likelyhood of july rate cut was increased.
Overall the market is still grinding higher but I think over SPY 630 could bring sellers. That said we could have a monster rip develop if that yank doesn’t come… Lets see.
My focus today is as follows…