What kind of setups I look for | stockbee


What kind of setups I look for

SSYS and HIMX are example of kind of setups I look for and the scans and process I use throwup.

I like stocks with established trends. To find trending stocks I use trend intensity. a stock with trend intensity (TI) above 1.05 is what I look for. On the chart the bottom panel  with green area shows TI65 above 1.05.

Once a stock established a trend I look for an orderly trend pause where the stock either has orderly pullback or consolidation of few days to weeks . During the consolidation I like to see very compact low range kind of action like you see on both these stocks.

I like to see a stock setup well for a swing move. These kind of setups on breakout lead to quick 8 to 40% moves of few days. Entering them as soon as they start breaking out gives you fairly tight stops. I put my stop at low of entry day.

If the trade works you quickly see a follow through of 3 to 5 days. Like this you can find hundreds of setups in a year. Some of them work like charm , some do not but for me 58% of them are working with 2.05/1 risk reward.

Once you understand the concept of swing trading and setup properly all scans and logic you can makea  decent living trading these kind of setups.  

No comments: