Warrior Trading Blog

$TWTR For The BIG Winner +$4.9K! | Mike’s Trade Recap

Hey what’s up guys? Well, a really great trade to start off the week here, especially after coming off a long holiday weekend. And we were able to lock up nearly 5000 bucks on Twitter. And there are some very technical points here on Twitter that I wanna talk about in our recap that will substantially improve your entry technique. So, stay tuned and let’s break down this Twitter trade.

Alright, good morning guys. Well, I want to do a quick recap here of this morning’s trade. It is still pretty early here in the day, about 10:45 AM and we are done. We were able to trade Twitter this morning into a gap entry for a really nice win, locked up just shy of 5000 bucks. One single trade, momentum type push on this stock, we were able to get a very sizeable position and ride it into the gap entry and lock up a really nice day. So, I wanna take some time here to break this down. A lot of really great things occurred on this trade and it’s a really great chart to study and learn a lot from. So, let’s take a few minutes and break this down for you guys.

So, we saw Twitter here gapping up this morning. There was earnings on this and it had started to approach a, what we call a gap entry, and that’s a point in the stock price where there’s a break. And if you look at the chart here you can see that the last time we reported earnings or a few times ago what happened was they were poor earnings and the stock opened up much, much lower, leaving this void in through here, which is referred to as a gap.

Now, when you have these spaces, a lot of times when the price re-enters the gap, we start to see a move, a momentum through this space and these tend to be tradable opportunities and especially on a stock like Twitter which is of such high profile. You really wanna pay attention to it ’cause it’s even more likely to make the move if you have a high profile stock and that’s something like Twitter, Facebook, Apple, Netflix. Any of those high profile names you really wanna watch closely when you start to approach these very technical levels.

So, the fact that Twitter was gapping up into the level and we had tested it before, had pretty much established a very significant pivot point as well as the gap entry, and you had room to move. There was nothing else in its way really to stop this thing from continuing to push through the gap. So, we had that up and what we wanted to see on the open was a move over the gap entry and a hold. We wanted to see a confirmed hold above it before we take the position. Now, that doesn’t mean we need to wait the entire time for a five minute candle to close, we just need to see that we at least have some sort of back test, some sort of confirmation, and how we get that is by using the fast time frame.

The fast time frame I use is a 24 second and if you look what happens on here, you’ll see that there’s a confirmed retest and hold along with a few other things that we’ll talk about here shortly that gave us the confirmation that this was ready to try a trade. So, what we saw on this was, here’s the open, we’ve got this huge volume surge that starts to push higher and as with any trade that we take, we always have to wait for a retest or pivot. And essentially those two things are gonna be the same, but whatever way makes more sense for you to understand it, it could be a retest or it could be a pivot.

So, what we have here is the first push and pull back. Pull back, remember this white line right here is the gap entry, so we wanna see it pull back and hold that level to confirm that we have now entered the gap and we do have the potential to continue moving higher. So, we pulled back, we held, we started to push back up off the gap entry. This tells me that we have a confirmed move higher. We are now holding back above the gap entry. This is now time to try a trade and see if we get this to continue higher. So I entered this trade, 3767 is where I got filled anticipating the break since we did hold that gap entry and I got filled 7000 shares. I tried for 10, I got filled seven ’cause it kinda moved quick here, and that’s where we started the trade off.

Now, one thing I wanna talk about here before we move any further is volume profile. This is such an important factor when identifying stocks that have big home run potential. And what you can see down here, and you won’t really be able to see this on any other time frame, maybe the one minute, but you have to pay attention to what the volume is doing. So, notice here what happens at the open. Huge volume spike and then notice what happens as we start to pull back. The volume significant dries up, dies. Now look what happens once we hold, we hold the gap entry and we start to move back higher. Once we confirm that gap entry and put that pivot in, we start to push back higher here, look at the volume. It starts to ramp back up. So we gotta decrease on the pull back, which is essentially telling us that the sellers are a lot less than the buyers, and then we get a volume ramp as we hold and we push up away from that level.

That’s about as much confirmation as you can get on a trade. So once I saw we had that volume profile established and we were holding that pivot level, I was very confident that we’d see this move continue. So, that’s why I anticipate … Usually I won’t anticipate a move, but if we have volume there to support it and we have room to move like we did on this Twitter through the gap, then I will definitely anticipate the trade and this had that, so I did anticipate it.

Alright so I did, again, enter the trade, anticipated the break, we started a break, I sold a quarter of my position at 38, I sold another quarter of my position as we moved through 38.10, and then I had half left, so I held the balance to see if we get a continued move higher. And what happened as we started to move higher here, I sold more as we came into 38.30’s. I sold a little bit more as we came into 38.60’s. And then I had a very small balance and I wanted to see if we could get through 39 is where I would take the rest off. And what I saw over here was we kinda double-topped, we kinda double-topped right here and this is where I sold the balance at 38.80 or 38.70, somewhere through here. I had about 5000 shares left, I just took it off ’cause we didn’t break 39 and I didn’t wanna really give back much and we started to look extended on the five minute.

So if you go back to the five minute chart, you’ll see that it was due for a pull back. We had started to put in this type of candle right here. I had thought we might get a quick pull back to view at before another move up, so I decided to take off the trade. It was a really great start to the day, so I ended up taking it off. But as you can see, after some consolidation here, we ended up moving nicely higher and there was plenty of opportunities to re-enter this and capture another move, but I traded the momentum move and those are the moves that I typically trade out of the first half hour to hour of the day and take my profits and shut it down for the rest of the day.

But, something to really pay attention to here guys, and this is really, really important, is this whole set up here. This is very, very important to understand and really something you need to study ’cause this is what is the driving factor behind the move. So, volume profile, a retest or a back test or a pivot that’s put in, which a pivot essentially is just a higher low or a lower high, depending on which direction you’re going, and that’s also what you’re gonna use for your stops. So when I entered this initially at 37.67, my stock was down here at the low of this pull back or what I call pivot. So, the low right here was 37.33, so just over 30 cents of risk on this and we had really good potential for this thing to continue.

So, really good risk/reward and really, really identifiable risk points on these when you use these pivots like this. So, take some time to study this chart because the volume profile, the back test against a level, all really important stuff to gain a high level of confidence that this trade is gonna work. Alright? So that was Twitter. That’ll do it for me today guys, and we’ll be back first thing tomorrow morning.

Hey everyone, thanks for watching the videos. I’ll continue to make sure that all of the watch list as well as the recaps are available to all of you. Make sure you subscribe to keep up to date on what’s hot and what’s not in the market.