What’s up, guys? Roberto here, and here we are again, talking about the trades from the week. This week, the earnings were really hot once again, and some of the momentum that we had from the past week really, really rolled over into this one as well. That’s always good to know. I did end up missing some opportunities here and there, especially when the market crashed after the announcement on the trade deal not going so well with China. But when I did decide to get involved in a trade, I was really on point. We had three trades and all of those were green. So, let’s jump over my shoulder and analyze those trades together.
All right, guys. First of all, as usual, let’s take an overall bigger picture of how the trading has been for the month of July and, of course, for the beginning of August. So, actually I ended up taking only one trade this week when it comes to July, and that’s the one we will be analyzing this together, but I just wanted to take a little bit of time and comment these results with you.
So, this past month in July I only took an overall total of 12 trades. That’s a record low for this year, but summer trading is usually a little bit slower and, especially the first half of July, I took some days off here and there. We were outside of earning season so there wasn’t much going on. But things really started to become really, really hotter as we moved after the 15th of July and we were able to score some good trades.
So, overall, we ended up the month with above 80% accuracy, which is quite nice and impressive, and the profit and loss ratio above 3.5 to 1, which is also very, very good. I can’t complain about that, definitely. You definitely want to take a lower amount of trades when the market is not hot, it’s not there, and so you maintain the same approach when it comes to selectivity.
And then we just started the month of August with, of course, the first two days, this Thursday and Friday, and we were able to get a couple of trades, very nice trades. We will analyze those. And so that we were basically able to go with the one-and-done kind of principle that we like a lot as traders. We enter when the signal is there, when our go-to strategy present itself, when the setup is right, and we go for it. And so, luckily enough, these last two days, so the first two days of August, we were able to score nice wins.
So, let’s make a step back right now and jump into the detail of those trades. The first one was EA, Electronic Arts, ended up playing as an earnings play. I went along on it, and I ended up having an enterprise in $95.80, and my stock price would have been down there at $95.25. I actually ended up closing it just for a 20 cents winner at $96 a few minutes later. And so despite the fact that I had a win there, I really did not fully respect my plan, because my plan was to stop out here or, of course, to look for a 1.5 to 1 profit loss ratio, which wasn’t the case because as I said, I stopped out earlier for a small win. But as a comment, I put to the fact that I anticipated the stop since there was no push and the volume died. Hindsight, that was actually the right call to make. We’ll analyze that right now, right away where together.
So, EA was gapping up on earnings. The day we’re looking at is actually this 31st here of July. Just for context, with EA, sorry, this is my layout of trading view. Here on the left is the three minutes. Here on the right, you find the 10 minutes on the top right, and at the bottom right corner there is a daily chart. And so over here, as you can notice, we were gapping up, and this gray area is all the extended session area. Here, we ended up making premarket high at $94.92.
So, I was kind of liking this set up more to the long side actually than to the short side, especially if you were able to clear here this level here which is this purple line, which is the 100 simple moving average coming straight from the daily. My plan was if we’re able here to go and push into the open and hold above the 100 SMA at that point we are above every moving average. We had actually a very nice a promising here, a promising window, into the daily that with further momentum it could’ve went ahead fill. But as we can see it now, that’s what kind of basically the plan, the initial plan.
And then we had, of course, the open, we had this first big push, nice volume, almost 900,000 shares traded during the first three minutes, so it was looking nice, actually. After this, I was looking for a retest and hold here above the 13 EMA on the three minutes above view-up, above the 100 SMA, was all looking good, especially if we could print a candle like this where it’s a kind of inverted hammer candle.
This shows that there is still some sort of strength, right? Because of the action that you can see here it was still lower volume here into the pullback, the signals not many sellers as well as this one candle here, the three minutes. That potentially would have meant more momentum to the long side if the next candle would’ve been able to push above it. And that was actually the plan. The next three minutes candle open, we retest this level once again. They start pushing back up, and that’s where I got in, that in here $95.80. I would’ve place my stop, let’s put this one, $95.80, and that point the stop is right there, just below the low of this candle which coincides with 100 SMA and the view-up.
So, I was feeling comfortable with the stop, and what I wanted to see was, of course, this one stock going right into my first stock that initially was here at around $96.60s. But instead what I noticed is that the first candle actually started to push, and here I wanted to see some more buying so that we could’ve made a higher high on the day. Instead, it was the first rejection. I hold onto this rejection, and I hold also onto this one candle. We made finally the other today, but we failed push above it.
Now, usually when you have this kind of setup here where you had a prior high of the day print on the first candle, and then retesting the second candle. And the third candle, you want to see pushing above it, and also maintaining momentum. If this thing pushes above and rejects, that’s not a really good sign, especially if the volume dies just like shown here. And so whenever I saw this situation I stepped in, and I was thinking not to be holding this one anymore all the way to my stop, but only giving it a few cents eventually below my entry.
But the next candle open, it starts to push on. Once again, it makes a new high. It gets very close to my first target. I had my limit order up and out already in $96.62, and this thing goes above the previous high at that point in $96.54, and then it gets rejected. It gets rejected again. There was no volume. Volume, so still declining, and so when the next candle open, it made a little push, and we started to sell.
When it went back to 96, it just jumped out. Just jumped out here, locked in a small profit because at that point I just knew that this thing could ever reverse that hard. Now, I’m not playing the reversal because I trust my setup. I just don’t want to mess up. Also, emotionally it can be quite hard if you start to go long or short on a name just because a trade didn’t work.
So, I want to have stepped out for a 20 cents winner, good read of the price action here. I just avoided these one to two become the first trade, the first loss of the week. And so we scored that one. We made some money on it, we closed the month, and we were able to move on. Move on into all those.
So, now we have Thursday, basically yesterday, and we had a very nice trade on this WLL. Now, why did I like WLL? Well, WLL, it’s something that I would typically stay away from, because I would typically stay away from stocks that are trading below the $15 mark. Usually, the $15 mark is a kind of my threshold, and I would not take trades if the stock is below the threshold. But this one was really a good nice looking exception. I will explain to you why right now.
First of all, it is true that we are not about $50 that day but basically until yesterday this thing was trading in the $17, $18. So, it was respecting the rules just the prior day. And then what I did love about this was the premarket pattern. I love the drifting down pattern without overextension just as such a nice controlled move to the downside. As you can see here, we made the first flash and a low. Then we make a lower high, and then lower low, lower high, lower low, lower high all the way into the open with very nice volume.
Here, into the open we had just about 800,000 shares traded, which is cool. I’m really looking for at least 50K to usually 1.5 million shares traded. It was right there in the middle, and even more importantly, I got zooming in the daily chart, the daily chart was actually the one that convinced me the most. Look at this chart here. We are talking about 17 years of history of this thing in the market, and we have never been traded that low.
Now, the prior low, all time low, came here just about three and a half years ago, and we had this candle here make a low, printing a low at $13.40s, right? So, even more important that day we were really retesting this level, $13.40, without getting away, also, overextended from it. It was an ideal scenario. When we have this kind of important level getting broken, you want to see that price actually to hold into the open so your level is still there to provide resistance because we are trading now below it. But it also provides a good opportunity in terms of risk reward, because you are only going to risk against this level.
Now, when we have a situation where we overextend too much from such an important level, that point I would have just left this one trade alone, but that was not the case. And so I was keeping my eyes on it and I was ready to take a trade if the right setup would have shown itself. For me, as you guys may know already, I’m not going to trade, I’m not going to attach here anything during the first three minutes. I just believe if there is too much usually going on; too much volatility, too much unpredictability.
I use that time to really invest in and watch how the stock is really behaving, but I’m not going to use it to take any trades. Especially in this case, we had a big imbalance, order imbalance, and so that that made the spread really impossible to take a trade on. And so I just wait. Even more important as we can see here we had an incredibly big overextension. Into the open, as soon as we open here, we made this low and we were basically 8% here of overextension of extension and divergence from the 13 EMA under three minutes. So, as you guys may know, I’m not going to look to take a trade if they’re essentially above 2.75%, because I think it’s just too risky to take like a short with the trend when the extension is so big. I have to wait eventually for a pullback.
Now, when did this opportunity present itself? Well, this is kind of ideal scenarios we are going to analyze now together. Because what I look for is a retest close enough to the 13 EMA and the view up. What I would potentially be loving to see is that, is the range of the candle getting lower and lower? Why do I love this rather than the opposite? When you want to bounce you have actually the range getting bigger on every candle. Well there’s a situation where there is actually strength, and there is actually more short sellers giving up and more long seller traders getting in and excited to take the bounce.
And so those kinds of situation I’m really more cautious of. I really want to see the price to settle on a relatively tight range, so that I can take my shot on the first candle to make a new low with a very, very small risk. Actually, I ended up waiting the situation, and I was liking the fact that here at $9.57 we had such a small candle. This candle was seven cents from top to bottom with still a decent volume. We had 300,000 shares traded on these three minutes along. The next three minutes, situation is very similar. So, I think we have like eight cents or something. Yeah, we had eight cents from top to bottom.
And so at that point I know that if we happen to have a new low that’s going to be most likely a very powerful setup. Now, as soon as we made a new low, I hit the sell button, and I got a slip, and so a couple cents. My stop would have been here but still 10 cent stop here, we let 86, my entry, $11.86, the potential stop area. And this thing, boom, just went to the floor. Look at this. It basically takes my four targets 1.5 to 1, 2.5 to 1, 4 to 1, and 6 to 1 in a matter of half an hour. In half an hour I was basically done with it. I sold the $11.71 one third more $11.61, and then $1.46, and my last sixth, so my last 500 shares here at $11.26.
So, it was very, very, very nice trade. It really, really can’t can set up any better than this for my strategy. Just a note there, if you know what you are looking for, when the opportunity present itself, you know that’s going to be a potential powerful setup. Now, if this thing makes a new low and reverses, and it stops you out, it is still okay in the end. I knew I was risking about 10 cents on this one trade, but I knew also the potential was much bigger. To be honest with you, in the end this thing ended up going like one point from my entry. For a $10 stock, this is really impressive, and it equals to a 10 to 1 profit loss ratio. So, the 10 cents risk, $1 potential reward. It is quite big. Very nice trade there on WLL, and then we move on to today.
Today, we took a trade on a Square, SQ, and it was a little bit similar to this one set up. So, it is good to know that in the end if you have a nice approach with a nice strategy you don’t need to reinvent the wheel every single day. You just need to follow your rules and wait for that setup to hit. Now, SQ.
SQ was a trade off today. What do they see on SQ? First of all, let’s spend a little bit of time analyzing daily chart. Daily chart, when I first actually looked up to this name, we were trading a bar. We were trading at 73 earlier this morning. I’m quite sure we’re about, yeah, when I opened my platform it was about 7:00 AM, 8:00 AM. It was trading at $74, $73.50, so I wasn’t too much interested actually because we had all the support still below. We had 100 SMA. We had 200 SMA, and also we had this very well defined pivot. It’s about $69.30s.
Now, since it was a gap down in this thing, it’s a really good trader when you have a big day. I kept it on watch, and I just noticed that prior to the open we had an acceleration in selling. So, we lost first this base here at $73.40s, and we started to sell off, and by the time of the open we were trading at about, yeah, about at about 70 bucks. And so whenever the situation happens, presents itself, once again, I don’t just blindly take a short. I wait to see if this move is sustained, and I eventually take a short on confirmation.
So, actually back in chatroom, I was commending it as soon as I notice this flash here we were a little bit too much overextended, actually. This is the extension you see at the time of the close, but if you were there, you would have noticed that these extension went all the way to here, this one was way above my 2.75% divergence, max divergence. And so I would’ve not been open to take the three minutes open range breakdown, and instead I waited for a retest. And what do they wait for? I guess now you know, because I was waiting for a candle with a shorter range, right? This one was the one that I liked.
I remember posting a comment in chat room. Let’s see if we can actually find it together. I’m not sure if I can go back that far, but just for you to know because what happens in the chatroom, it’s very, very interesting. This is 9:38. This is after the open, and here’s the one. At 9:37 guys, 9:37 AM. We were trading basically here on this one candle. Here’s where I posted SQ. I can watch for the first three minutes low. Now, this one is sprinting, and this one range is smaller, now I can watch for the first three minutes low. I was also watching on top, and I actually tried to get in once but it wasn’t short term restriction, I didn’t get filled.
So, I canceled my order, and I focus on SQ. And right there, three minutes later, boom, this thing opens the next three minutes. It makes a new low, and that’s when I got in. Getting here, 9:41, $69.55 here, and from that point on I just needed to follow my predefined target, right? I ended up into here $69.55, and, of course, I had to stop right here at about $70.11. And this thing, boom. As soon as it started selling, I kept on commenting, “Now, I know that if we are able to flush here below this $69.30 pivot and hold, and ultimately crack $69 this thing will set for a very nice move.
And so I put out my order $68.71, and I got filled my first target, and I put out my second order in $68.16, and my third order, actually it was $67.29. So, little bit different than here, but very similar in any case. I ended up how almost getting the lower tick here on the bottom tick here on this trade by that point. So, nine minutes later, basically, 10 minutes later I was still only holding the last third of my position. As you can see here, I got out one third $68.71 I got out one minute later. I got out one more third and one minute later.
So, by 9:48, seven minutes later of my entry I was out five-sixth on my original position with a very, very nice, almost $2.50 move. That’s a very, very big move for the stock. $2.50 move on a $69 stock really, really equals like almost 4%, so that’s a very big move. And then of course we went too much into our extension. I was looking actually for a cover eventually here, our last piece on my trade, but instead this thing started pushing. I held into this. This thing rejected here right at the price where I got in, and then during this consolidation I didn’t really like anymore the way it was holding. It was starting really to feel too much choppy, and so I got out the last piece at 10:16 at $68.65. Still very, very, very, very nice trade, and I was very happy a lot of other members in chatroom were able to take advantage of the move as well.
Now, before closing, I actually noticed that the trading view charting platform that I use recently have added the possibility to have seconds, so sub one minute charts. You can see one second, five seconds, 15 seconds, and 30 seconds. Now, it’s a very nice addition available to any account. Just in case you are interested to get my exact layout, go ahead and click on the link you find in the description down below, and then email me at [email protected] I will be more than happy to share with you my exact layout, the one that now we are consistently trading and making money off of in a way. I ended up sharing my own thoughts for a very, very big amount of weeks in a row which I’m very, very thankful of.
So, that’s actually eat. Yeah, that’s actually it for my weekly recap. I really hope you enjoyed this session. I really hope you could learn something valuable out of it. If that’s the case, please show me some love pushing the like button, and leave a comment down below if you have any questions, I make sure to come back later on to answer to all of you. I want to thank you for watching. I’ll see you guys next week in chatroom.
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