Today’s Featured Trade Idea is AXGN (Short).

Members can join us in Trading Room #1 as Rick reviews this setup and other Trade-Ideas at 9:10am Eastern.  For now, here are my own analysis and a potential trade plan made using our Trader Vision 20/20 software.

AXGN broke its long-term uptrend by falling off a cliff in mid-summer. It has failed multiple attempts to break the downtrend (most recently the end of last week). It is currently in a “Dreaded h” pattern, shows a Death Cross signal as of Monday and also a quasi-Doji Continuation signal.

I will be looking to Enter Short on a breakout of the “h” (below Monday’s low) with a Stop set above a couple potential resistance levels (still tight) and Targets defined off Daily and Weekly chart S/R levels.

The 1st thing to note that this is a large position. Trader Vision tells us it represents almost 8% of the account. This is more acceptable on a Short, because the company going out of business would be in our favor as a short. In addition, while it theoretically can go to infinity in price, the practical limit makes this risk more palatable.

Trader Vision tells us we should have 3-4 weeks until the next earnings report. It also shows us that this chart setup has 5 Bearish and only 1 Bullish condition.

TV20/20 tells us this trade plan offers very low risk to stop ($64) with very high potential reward ($986). At the 1st target, the Reward/Risk is 5.83:1 ($373/$64). So we can make our trade goal by covering the short at Target #1. However, if we can cover only half there and hold the rest until target #2, we can achieve a huge 15.41:1 Reward/Risk.

Having this knowledge before a trade is even entered makes it much easier to control emotions and maintain discipline.

Below is my markup of the chart and the trade plan as laid out by Trader Vision 20/20.  As a bonus, if you click the green button below, you’ll be able to watch a video of the chart markup and trade planning process.

The AXGN Trade Setup – As of 10-8-18

The Trade Plan

Note how Trader Vision 20/20 does so much of the work for you.  Knowing the ratio of Bullish Conditions to Bearish ones as well as the overall risk of the position size, the risk to Stop out and the Reward possible at each Target price can help a great deal with controlling our emotions.  Knowing the dollar impact of every scenario ahead of time, allows us to make calm decisions during the trade.  It really takes the pressure off.  No guesswork.  No surprises.  No emotional roller coaster.

To see a short video of this trade’s chart markup and trade planning, click the button below.

Put the power to Trader Vision 20/20 to work for you…

Testimonial

Trader Vision immediately simplified the process…immediately it provided that information and guidance to me. I knew what I would risk for how much reward, I began taking trades off at the 1st target, 2nd target, I was no longer holding all my trades for the homerun. I also began implementing the stop losses if and when they were reached, not just hoping the stock would recover.  It then became easier to see what patterns were working for me and which were not.  It provided a much more relaxed and stress-free environment. –Joan G

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Investing and Trading involve significant financial risk and are not suitable for everyone. Ed Carter is not a licensed financial adviser nor does he offer trade recommendations or investment advice to anyone. No communication from Hit and Run Candlesticks Inc. is to be considered financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.

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