Key to understanding anticipation setup

Understand volatility and range cycles...
Momentum burst leads to Volatility expansion. During this phase stock quickly makes a 8% to 40% move in matter of days.
Consolidation or volatility contraction follows some of these breakouts, while some momentum burst fade and reverse.
Fading momentum burst move is what mean reversion traders build their setups and trading around.
When stock instead of fading after momentum burst forms orderly consolidation or in other word has volatility contraction , it gives us good anticipation setup.
Such orderly volatility contraction periods have high probability of following through in direction of momentum.
In anticipation setup our scans try and identify such consolidation or volatility contraction periods. We put orders in anticipation of breakout or enter as soon as stock starts to breakout.
You want to find the consolidation or volatility contraction phase and enter at an interface between contraction and expansion. Not too early or too late.
When a momentum burst is followed by such contraction you get a good risk reward trade. If momentum fails to show up you get stopped out for small loss or break even.
In a strong trend move or longer duration trend move , momentum bursts followed by Volatility contraction followed by momentum burst happen several times.
You want to find the consolidation or volatility contraction phase and enter at an interface between contraction and expansion. Not too early or too late.
Range Expansion, range contraction, Range Expansion, range contraction. that is the cycle. If you understand that you will be able to find anticipation setups.
The more you do it better you will become at it. There are some tactics and nuances to make this cycle work.
Selecting a stock with ultra high momentum is one as against a slow moving stock. We want to trade for magnitude and not momentum. That way you get most bang for your bucks as the trade quickly moves in your favor and also makes more explosive move in short period of time compared to slow trend.
Lot of success in this setup is also function of trading tactics like pre planned entries, types of orders, stops placement , moving stops aggressively, profit harvesting and so on.
It takes time to develop and fine tune to the tactics and execution part of the equation. But once you do it you can find hundreds of profitable trades in a year.


Manage what is under your control

Manage what is under your control. If we do damn good job of that rest is easy.
What is under your control in a trade.

Which stock to buy

is it under your control?

How much to buy

is it under your control?

Where to buy

is it under your control?

Where to put stop

is it under your control?

Where to exit

is it under your control?

How many trades to do

is it under your control?

Are you doing a good job of managing these things.


Stockbee momentum 50

This list is published daily for the benefit of swing and position traders. As the saying goes go where the oil is, the momentum leaders are where opportunities for explosive gains are. As a trader you want to be stocks that are moving up or down at fastest speed. The following stocks give you the top stocks by momentum in the market.

Top Ranked stocks by momentum. The list is  updated daily.

You can access all the Top ranked momentum stocks for free by visiting this link.

The link gives you list of stocks on one year , 65 days and 21 days momentum.

That way you can focus on red hot momentum stocks in all three time frames of short, medium and long term.


MTLS a good anticipation setup from yesterday

This was highlighted in last nights members newsletter. It triggered and is now up more than 6%.

These kind of setups offer very low risk entries. My entry was 20.20 on this.

To find setups like these all work needs to be done in the night. Rest is all execution and picking up the money. 

PHM was anticipation setup

This was one of the highlighted stock as good anticipation setup last night. the advantage of identifying setup like these ahead of time is , it allows you to get very close stop.

As you can see stock is up 4% plus now. My entry was very early and very close to open , as a result risk is very low. My stop is already at break even on this.

A combination of anticipation and breakout setups allows you to lower your risk on breakout. More than that it many times allow you to also capture day one gains on breakout .

Many first day gains on breakouts can be 4 to 20%. Anticipation allows you to capture them.

If you are serious about making money swing trading , master anticipation setup. I have detailed it several times on this site with examples and scans.