The Trading Mindwheel by Lamothe Michael;

Author:Lamothe, Michael; [Lamothe, Michael]
Language: eng
Format: epub
Publisher: John Wiley & Sons, Incorporated
Published: 2023-03-20T00:00:00+00:00

Our setups are what allow an idea to move from our Universe List onto our potential trade candidates lists. They take what was able to make it into the arena and allow it to play the game.

The types of setups I personally trade the most are:

Pullback Buy;

Cup with Handle;

Flat Base;

High Tight Flag.

These account for more than 80% of the trades I take and are more than enough to get you started. If you'd like more, check out the resources over on tradingmindwheel.com/resources.

Within each of the setups I look for, there are certain common characteristics I like to see across the board. They include volatility contraction, dry‐up in volume on the right side of the base, net accumulation within the base, high relative strength, and the major moving averages (21 ema, 50 sma, and 200 sma) trending higher. As I'm flipping through charts, I've trained myself to be able to spot these characteristics at a glance. If a trade lacks them, I move on immediately. If it has them and is one of the above setups, it will get added to a “Trade Ideas” list.

Examples:

Name of Setup: Pullback Buy;

Time Frame: Visible on both weekly and daily time frames;

Length: Bars needed (minimum and maximum) 7days‐5wks

Depth: Percentage drop from the top (minimum and maximum) 10–20%;

Look/Characteristics: Typically pulls into the 21 ema or 50 sma with a slope of about 45 degrees; the price action should be smooth and controlled; volume typically dries up as we move further to the right of the chart;

Placement within the Trend: Up 1x or more the range of the original base;

Requirements to Trigger an Entry (breakout levels, support placement, % stop, targets) support to be established at the 50 sma or 21 ema; a positive reversal bar at those levels; a shakeout + positive reversal is a plus; 2–4 days of sideways action;

Market Type Needed for Trade: Uptrend, Sideways, or IF found in a down‐trending market, it must be close to a model setup OR market is close to bottoming / potentially turning;

Examples: Zscaler Inc (Ticker ZS, Oct 2021) (see Fig 2.19); Charles River Laboratories International, Inc (Ticker CRL, March 2021) (see Fig 2.20); Paycom Software, Inc (Ticker PAYC, Sept 2021) (see Fig 2.21).

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.