How To Deal With Messy Trades

How To Deal With Messy Trades

How To Deal With Messy Trades 1024 546 Steven Dux
What's up and welcome back to

This week's lesson.

Today I want to go over the momentum and breakdown of some multi-week runners.

We’ve recently been trading a lot of micro float that show reverse splits and gap-ups in the pre-market. These patterns are unpredictable, especially when they don’t have enough resistance.

STOCK TICKER:

$ADIL

$ADIL doesn’t have a history of resistance and was a stock I skipped over when seeing the morning push feed back down with no panic.

$ADIL doesn’t have a history of resistance and was a stock I skipped over when seeing the morning push feed back down with no panic. There was pressure to sell, which resulted in a random mid-day gap up before it continued to fade. Even though I didn’t play this ticker, I can still recognize momentum when I see it, and if you wanted to pursue this, then the $5 area would be the place to short. However, you would need to be consistently watching, and I figured it wasn’t worth that. $ADIL reinforces the negatives on trading the front side because volume here means there’s no resistance, and you have nothing to risk into.

STOCK TICKER:

$AQLA

$AQLA is a different story when we see the morning push 100%…

$AQLA is a different story when we see the morning push 100%, making it a pre-market breakout due to a 20-50% gap-up with accumulated volume. I took around $50,000 in profit by the end of the day because the attempted mid-day spike failed and broke the momentum. Always use the charts when planning your moves, and don’t get rushed when seeing a fresh chart. You want to use history to your advantage by learning the resistance, volume traded, how many backorders are there, and whether to go long or short.

STOCK TICKER:

$ASNS

I want to move on to $ASNS, which people bought as a multi-day breakout, and should trade just as that.

Because it’s a multi-day breakout, any intraday action shouldn’t shake you; however, we see $ASNS going parabolic, leading to bad odds. A breakout should hold a consistent support level throughout the day, but parabolics pull back and cause a fake-out that starts a chain reaction of people selling their position. We can use $ASNS as an example for overstaying gap-down as well. People tend to use yesterdays close, but different scenarios can form when these gap-downs don’t have a consolidation resistance or enough volume traded.

If there's not enough volume traded, then there's not enough backorders, and that means it's easy to break.

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