Today’s Featured Trade Idea is WMGI.

Here are my analysis and a potential trade plan made using our Trader Vision 20/20 software.

WMGI has been in a Bullish trend since early May. After the most recent profit-taking, the Bulls stepped back in. However, Monday was a bad day (on the announcement of pricing for an upcoming stock offering). Still, the Bulls bounced it up off of the 50sma on the day. Then Tuesday the Bears tried to push it back down only to be met by very strong Bull buying (causing a strong Bullish Engulfing signal).  On positive trading, I will look to Enter with a stop in the $27.50 area. Targets are set by S/R levels and Fib. Ext. shown for corroboration.

Trader Vision shows us that earnings are out of the way and we have 2.5mo. before they will be a concern again. It also tells us we have 7 strong Bullish conditions and no Bearish conditions in this setup. This could make for a nice trade.

However, TV20/20 also shows us that we had to play with the trade plan in order to set up a trade that can meet our trade goals. We have to accept a slightly larger position size than we’d like. In addition, even though we will get 2:1 Reward/Risk, we have to sell only 60 shares at the 1st Target and the remaining 90 at the 2nd Target (giving us a 3:1 Reward/Risk overall) in order to achieve our Trade Goal on this trade. Obviously, neither of these adjustments are ideal.

While your account size and goals will differ from this example, the important thing to note is that TV20/20 shows us that a trade which looks good on the chart, in fact, may not meet our standards. Knowing this, instead of just taking the trade and finding out afterward is a powerful tool in our Trader’s Toolbox.

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 WMGI Trade Setup – As of 8-28-18

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, 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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