Today I am going to be going over a very simple and easy go-to setup for beginner traders. This is a setup I'm personally trying to hone in on and understand a lot better so I can regrow my account from it. 

 

The setup:

Red to Green (RTG) move.

Pre-Qualifications:

- Some type of gap up during P/M 

- Former runner

- Potential Low Floater

What is it:

When a stock opens up and has selling volume for the first couple minutes, then a wave of buyers comes in and pushes the stock price up.

Entry point:

After the stock has made it's downtrend, identify your support level (stop loss level). Once you identify your support level and you see that the stock is uptrending and has buying volume that begins to outweigh the selling volume, set your entry at the market open price. 

Exit point:

There are two ways you can determine your exit point. One of the two ways is to simply place a limit sell order approximately .10 above your entry price. Most times when a stock performs a RTG move, it will spike up at least .10 (not 100% guaranteed, but from studying this pattern, 9/10 stocks will do it). The second way you can determine your exit point is by adjusting your stop loss as the stock uptrends. Where you place your stop loss is entirely up to you, but I prefer every .05 just in case the stock turns on me and I want to secure a small profit.

Here are two examples of this setup from today:

$INNL

This stock had a nice gap up this morning. Profit takers at the market open lead to selling volume. Once profit takers have gotten their profits, buyers start to roll in to try and push this stock up past P/M resistance. Your entry would be at the break of the market open price. Your support would be the bottom of the first wick. Your sell point would be anywhere along those five green candles, or sell at the first red candle.

$HTGM

This stock was a former runner. As you can see the stock had profit takers this morning and eventually led to heavy buying after the first two minutes. Your entry is above the break of the first red candle, and your support is right at the bottom wick of the first red candle. This stock followed through with good buying volume and had a nice run. You can look to sell on the doji candle, or the first red candle.

 

I really hope this setup really helps you guys out with trading. I personally have not tried this set up on my account yet just because I want to keep studying first, but this easy setup does have a lot of potential. 

If anyone has any other takes on this setup i'd love to hear it! 

Thanks for your time and best of luck!

- C.J.