Hey community,

Just wanted to share a quick post that I thought would be very helpful for those looking to trade the long side (or front side of the move) if you are uncomfortable shorting stocks or do not have the right broker that allows you to find shares on the daily basis or due to the lack of capital. I know the back side of the move can make a lot of money, but just like that you can get burn as well. That is why the long might also help you, especially in the beginning of your trading journey to get comfortable placing trades and not have to worry about losing more than what is in your trading account. Enjoy the reading!

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ABCD (beginner): Very comfortable strategy to start with very minimal risks involve and the potential upside could be very rewarding. It could be a slow mover in the beginning so patience is key in order to bank the easy money (D). Key to the strategy is letting the base (B) be confirmed before jumping too early into the trade and making sure there is a grind up pattern (C) showing. The objective is to buy during the grind up (C) as volume is picking up, ideally, and using the confirmed base (B) as your risk level. High of the day would be (A) so the stock could run to this price level and do one of two things – breakout above HOD (A) or fail to break above resistance and lose momentum/interest. You can either exit your full position or sell partial to lock in profits as it reaches HOD and testing resistance, or stay in the trade and wait for a second leg up. The second leg up would be (D) which can bring (bonus money), but also move very rapidly so be ready to exit your position and not hold forever. 

Volume – 2+ million shares traded

Risk/Reward – 1:3+

Price Range – $0.50 minimum 

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DAILY TIME-FRAME BREAKOUT (beginner/Intermediate): Another very comfortable long trading setup that could bring very nice profits without too much risk involved. The stock should be showing signs of interest intraday (1-5 min. chart) and trading volume should be picking up since this is key (momentum push) to the expected breakout on the daily chart. The objective is to wait for confirmation of the breakout on the daily chart as buyers are taking over (demand surging) and sellers are being taken out (not enough supply). You want to buy once the breakout has been confirmed on the daily chart before taking a position just in case the price drops and momentum/interest losses steam. Once the breakout takes place, the price could surge very quickly so buying at the offer (Ask) could be ideal in order to not miss the trade and have to end up chasing. This type of trade could move quickly or continue trending up very nicely and steady so depending on your risk tolerance and position size, you might want to lock in profits in case of a trend reversal.  

Volume – 2+ million shares traded

Risk/Reward – 1:2+

Price Range – $0.50 minimum

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LATE DAY RUNNER (Intermediate): This long setup that can generate healthy returns in a very short period of time without causing major loses if traded properly. Throughout the day the stock showed interest among traders and is currently consolidating (12-2pm) close to HOD in a tight price channel. As the trading session is getting ready to finalize, volume starts picking up once again. The objective is to buy into the grind up during the consolidation period as the price is getting ready to break above the price channel or wait for confirmation of the channel breakout to be on the safe side. Once the breakout has been confirmed, a strong push could create enough momentum to take the price above high of day (HOD) which creates more demand and interest among traders. Your ideal risk level would be the support level from the price channel during the consolidation period. Because of the late move the stock can do several things:

•Interest dies out if there is not enough steam to continue pushing the price higher

•Price continues going up and test other daily resistance levels

•Momentum continues the following day creating more demand

•Stock losses steam and profit taking takes place creating a very fast panic (bleeding)

You can cash your profits the same day if you want to sleep and not worry about any open trades/exposure overnight, close partial your position and leave the other part open overnight if you feel confident, or hold all overnight if you want to see if it could potentially have another leg up.

Volume – 2+ million shares traded

Risk/Reward – 1:2+

Price Range – $0.50 minimum

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RED-TO-GREEN BOUNCE (Advance): Not the most ideal setup for someone who is just getting started due to the high risk involved (you are trying to catch a falling knife).  It can lead to major losses from the beginning if not timed properly as you could end up adding to your position emotionally trying to average down since you do not want to exit at a major loss and only make it worst by adding to it. The objective is to enter into the trade once the morning wash (panic) has taking place and a second higher low sets base and starts showing signs of recovery by grinding up gradually. You want to enter with a small position as it could continue with the bleeding so minimizing exposure in the initial entry is important. Depending on your risk tolerance, you could use the second higher low as your stop level or low of day (LOD) if you want to give the stock additional breathing room. Once in the trade, patience is important as the stock uptrends and reaches HOD which would be the open price level. At this point you can either exit your full position or sell partial to lock in profits as it reaches HOD and testing resistance, or stay in the trade and wait for the breakout if momentum/interest picks up. 

Volume – 2+ million shares traded

Risk/Reward – 1:2+

Price Range – $0.50 minimum

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MORNING MOMENTUM RUNNER (Advance): Though it can be very profitable (30-100%+), it’s more of a “Pro-level” trade and quite risky if you are not familiar with morning momentum. Due to the risk involve, you might not want to load up with a full position size like you would with the ABCD setup. Reason why is because volatility would be much greater and this could make you very emotional, causing you to exit your trade for no reason or suffer a huge lost if the trade goes against since they can move fairly quickly. The objective is to have a set risk level stop and treat the trade like a scalp (lock in quick profits) and not chase it. If you do decide to chase, make sure to reduce your position size as well to minimize exposure and avoid major losses.

Volume – N/A

Risk/Reward – 1:3+

Price Range – It depends as this could be the very first day running after X days/months of no trading activity. Premarket volume could be an indicator of price range.

I hope this came in handy and you enjoyed the free reading :) If you guys have any questions, please feel free to post them and I will get back to you as soon as I get a chance.