Everything in this business of trading is about PROBABILITIES, there is ZERO certainty. And how do we optimally deal with the uncertainties? – by using SETUPS. On 12/31/21 NTRB was the #1 stock during the full session, up well over 100% most of the day, huge news runner “bko” stock. So why would I have bought a stock that was up “too much already“. For years I have tried to get people to understand that a strong stock tends to stay strong, a weak stock tends to stay weak. Now, there is a lot of nuance as to what the terms “weak” and “strong” actually mean. Not going to get into that right here, but the fact is the fact, tho quickly a few words, I will NEVER buy a weak stock – but I will buy a STRONG stock which is (I believe) currently “temporarily” weak. That could be a bounce SETUP, a pullback SETUP, a bucket SETUP, etc. I have a catalog of more than 10 setups which I have developed over the years. All these setups are based upon ONLY trading strong or very strong stocks.
The setup I used to enter NTRB was my specific “bucket trade setup”. Again, too complex to get into here, but you will see how this setup evolved.
In chart #1 notation (click charts to enlarge), you can see where and when my initial buy entry was – “long (buy) 8.57, spring, very low float (very important part of this setup), halt setup also ( I have setups dealing with trading halts) – I often combine more than 1 setup into a single trade. And those are usually higher probability setups overall then.
In chart #2 you can see that the stock did fall after I bought it, about 5%, but I stuck with it and it did begin working. You can also see that my “bucket” setup did evolve, which I anticipated would happen, and then it broke out and up again. And when it broke out I put in a limit order to sell my shares at 10.57 (too detailed as to why I chose that target price) – sometimes I use market sell orders, other times I use limit orders.
In chart #3 you can see that the trade continued to work, the small pullback was on light volume as notated – it is still bullish to me.
In chart #4 you can see that my limit order was hit and I sold the stock at 10.57, up over 20% – in around 30 minutes in and out. A nice trade, in 30 minutes, and on a stock which most people would be too fearful to enter – because it was already up “too much”. Again – an object (stock) in motion, tends to stay in motion, and in the current direction.
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