This trading strategy captures a stock that is about to explode higher after a slight pause in its rise. However there must be a previous high that exist.
GPK above shows how the stock traded sideways for some time. The stock was trading sideways at a previous high. You can draw an "inverted V" shape on the previous high.
The trader can buy the breakout above the consolidation and put a stop loss below the consolidation. Once the trader reaches a 1:1 Risk:Reward ratio he or she can sell 1/2 or 1/3. What this means is if you risk $100 in the trade and your profit reaches $100, take 1/3 or 1/2 of it off the table and ride the others higher.
The chart above is the 60 min chart of GPK. When you switch to the 60 min chart, you can see how the stock breaks out of the trading channel. You can also use the 60 min 50 MA as a trailing stop loss. Sell the entire position if it drops below the 50 MA.
Below are more examples of this trading strategy. Take a look at them and study them.
Oct 20, 21 11:48 AM
Are the markets in an uptrend or downtrend? Where are the support and resistance areas? Stock market analysis for October 2021.
Oct 19, 21 08:25 PM
A combination of technical setups help to propel AMD higher. When it hit the 200 MA, it bounce up and shot up to $122.
Oct 19, 21 01:01 AM
After correcting to the 50 day moving average, Alcoa was able to find support and rise to $57 in less than two months.
Oct 18, 21 12:24 AM
Technical analysis of Visa stock. A look at its trends and support and resistance.
Oct 17, 21 10:38 PM
Analysis of Bitcoin's chart. Is it in an uptrend or downtrend and where is the support and resistance.