COLL Setup and Trade Plan

Today's Featured Trade Idea is COLL .

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.

Note: Beware the overall market indecision. Mixed trends (short and long-term) and very volatile action (many "gap and fade" as well as intra-day reversals) make this a treacherous market.  Bear Market bounces are not when we should be getting very long in our account unless we are very quick and agile in our trading style.

COLL has been in a long-term downtrend but has been forming a bottom over the last couple of months. We can see a double bottom in September and an Inverted Head & Shoulders pattern of sorts forming since August. In early October it also broke into an RBB pattern and then consolidated at resistance (neckline of the Inv. H&S). Tuesday it completed a Morning Star type signal to break through that resistance.

I will look for an inside day Entry, perhaps on a retest of the b/o to prove Support) using a Stop below Tuesday's candle and Targets defined by S/R levels from Weekly charts.

Trader Vision warns us to think before taking this trade. We have about 3 weeks until the next earnings report. However, the biggest concern is the very volatile overall market that has been Bearish both long and short-term until yesterday. Caution is advised.

TV20/20 also tells us this trade plan offers over 11% in potential reward. However, within my position-sizing rules, it does not have the potential to reach this account's Trade Goal. It offers relatively small risk to Stop Out($90), but does not quite achieve a 2:1 Reward/Risk at the 1st Target. However, at the 2nd Target, the overall trade can achieve a 3.25:1 Reward/Risk.

Again, both common sense and Trader Vision are urging caution in this market. While this is a nice chart setup, not every day is one to be trading and a Bear Market Trend bounce it's certainly not a great time to be taking on as many Long trades.

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 COLL Trade Setup - As of 10-16-18

COLL Chart Setup as of 10-16-18

The Trade Plan

COLL Trade Plan for 10-17-18

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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