SCHN Setup and Trade Plan Caution Advised!

Today’s Featured Trade Idea is SCHN.

That said, this is a very whippy and volatile market, which also has a ton of earnings coming today and this week.  Personally, I will sit on my hands.  However, if you take this trade be very watchful and fast to take or preserve profits.

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.

Be very careful if you take this trade.  This is a week to sit on your hands given market volatility (whiplash) and heavy earnings reports.

SCHN has formed a bottom and broke into an RBB pattern. It printed a strong candle Thursday on earnings and a very volatile (long-legged) Doji on Friday. This potentially sets up a Doji Continuation pattern (sandwich) for Monday.

If I took this, it would be with an Entry long just above current resistance (making it potential support) and with target defined by weekly chart S/R levels.

As we can see TV20/20 is telling us this is a risky trade, without a great Reward/Risk. It does show that earnings are out of the way. However, only 1 Bullish condition in the face of 4 Bearish ones must give us pause.

The trade plan itself is also marginal, but could be acceptable. We had to use very tight Entry and Targets (relative to Support/Resistance. However, with htose tight parameters, the trade could at least get us 2.82:1 Reward/Risk at the 2nd Target…albeit without making the trade goal for this trade/account.

So use caution. This could simply be a pass…especially given the very volatile market we have right now and all hte earnings coming this week.

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 SCHN Trade Setup – As of 10-26-18

SCHN Chart Setup as of 10-26-18

The Trade Plan

SCHN Trade Plan for 10-29-18

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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