How to use reversal setup to make money | stockbee

11/26/2019

How to use reversal setup to make money


TCOM showed up in Reversal Bullish scan on 11/21/2019. I entered at 3.59 just before close. Stop was 40 cents. $400 risk on 1000 shares.

 
Next day stock gapped up and kept going up . Yesterday it again gapped. Once it crossed 33, moved stop to 33 as that was 5R profit and did not want to give it up. Got out for $2000 profit on $400 risk which in reality was 0 risk as stock just took off the next day and I moved stop to breakeven in first 0 minutes.



Reversal Bullish Scan I use

l=minl5 and (o-l)>(c-o) and (c-l)/(h-l)>=.6 and v>=290000 and c>=5 and minv3.1>=100000

What I look for 

I look for sign of selling exhaustion after scanning. Stock which was lower intraday but recovers and closes near high and where the candle tail is 3 to 5 times the body is what I like .


The trick in trading this setup is reducing down your list to just that 1 or 2 ideas which has a high probability of going up immediately the next day.

Process 

Run the Stockbee Reversal Bullish Scan between 3.30 to 3.55 PM.

Select 1 to 3 ideas.

Prioritise ideas likely to breakout next day

Prefer higher priced stocks.

Enter between 3.58 to 4PM or using Market On Close order (MOC)

Put stop of less than 2%.

Move stop to breakeven or breakeven plus few % if it goes up the next day. 

Exit on stop hit if it does not work on 3rd day if it does not move much.

Take profits or trail aggressively once you have profit in multiples of your risk.

Rinse and repeat the next day.

Reason I like this setup is it allows you to find stocks with less than 2.5% risk if bought near low on signal day. And in many trades it is almost 0 risk as entry is in last 2 minutes and many just gap up or get going next day. 

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