Trade simple setups
One of the easiest way to improve profit is by trading simple setups. Simple structural setups work best and easy to trade.
Simple structural setup idea: Momentum burst. Stocks move in sharp burst of 3 to 5 days
Simple structural setup idea: range contraction. Period of range contraction is followed by range expansion. So focus on range contraction in uptrending stock for low risk entry.
Simple structural setup idea: earnings reaction. Stock react positively or negatively to earnings surprise. Focus on stock with big earnings surprise.
Simple structural setup idea: stocks with momentum continue to move in direction of the momentum. Focus on top 25 to 100 stocks with 3 , 6, or 12 month momentum.
Simple structural setup idea: buyer or seller exhaustion leads to turns. Look for buying exhaustion to short. Look for selling exhaustion to go long.
Simple structural setup idea: stocks from technology , health care , and consumer discretionary sectors dominate biggest winners for any timeframe. Limit your trading focus to these 3 major sectors if looking for big money.
Simple structural setup idea: majority of long term winners have above normal volume surge in the first few days of start of their move. Focus on stocks that have highest volume day in last few years and investigate the catalyst and buy for longer move.
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