In this post, I’ll share some fresh ideas, concepts, and strategies for timing your trades correctly, with the potential for significant directional moves this week. I’ll walk you through the exact entry and exit strategies and how I manage risk to ensure consistent, profitable trading.
Managing Risk to Prevent Career-Ending Losses
First, let me talk about how I manage risk. I’ve managed to create a simple risk table over the years, based on historical data and performance, that lets me know how much of my daily loss limit I should be risking on each setup. And I always stick to it, so as not to lose these gains catastrophically.
For my A-graded setups (A, A+, A++), I limit my losses to three times my average “Green Day.” This keeps the losses manageable in case a trade does not go as planned. The risk is constantly calculated in real-time, based on recent market activity and trends. If I go wrong on this trade, I will only be losing a few green days’ worth of profits, which isn’t too hard to take.
Trade Ideas for the Week
Okay, so we’ve talked about risk management. Let’s now look at some trade ideas for this week.
Tesla (TSLA) Breakout Setup
Breakout setups have been very successful lately, and Tesla is one of those potential opportunities. I normally shy away from crowded setups, but Tesla has proven to be pretty resilient, especially after the Cybertruck event. It has not sold off recently and is consolidating above some key moving averages.
Trade Plan:
- Entry: Buy above the hourly consolidation at $247.50 once the stock breaks out from last week’s resistance.
- Stop Loss: Put one at $245, in case it falls back into the old week’s range.
- Target: First target at $260. If the stock breaks above $250, and closes above it too, I will add to the position.
- Timeframe: 2 to 3 days.
Once the stock trades at $260, I’ll trail my stop using higher lows on the hourly chart to book profits as the trade evolves.
AIRM Short Setup
AIRM is an old long setup that spiked above 63% after it breached $26. The stock holds a good level of short interest above 20%, hence an ideal setup to see it going into a retracement. In this situation, I look to short the stock once there’s a near-term exhaustion.
Trade Plan:
- Entry: Look for a range expansion up, then an engulfing red candle or a breakdown from a consolidation range, such as $41 to $43.
- Stop Loss: Place a stop above the high of the day or recent consolidation range.
- Target: First target at $38, second at $36, and if reached, I will trail the final 1/3 of the position down to $34.
- Timeframe: Tailing stops in the hourly chart with lower highs.
Backside Short Setup: Small Caps
INTS, SVFD, MLGO, GDHD, WBUY- Last setup before the week goes into the graveyard is shorting small-cap failed stocks. Looking for failures to happen at key resistance levels on some of these including INTS, SVFD, MLGO, GDHD and WBUY stocks.
INTS Example:
If the stock pushes into the $9.50 area (previous resistance level), I’ll look for a failure with volume. If the price starts to roll over, I’ll get short.
- Stop Loss: Place a stop above the high of the failed move.
- Target: Target Friday’s low, and once that target is hit, trail the stop using hourly chart lower highs.
The intraday management of this trade will be on an hourly chart basis, and may change based on market conditions.
Conclusion
Timing your trades is very crucial to maximize the profit potential. You can position yourself for huge gains by picking the right kind of setups like Tesla breakouts, AIRM pullbacks, and backside short setups on small caps. Still, risk management is paramount. With the right discipline and approach, you can protect your capital while striving for consistent profits.