Shopify Inc.Long
SHOP - Oct 24 Opening Sustainable Momentum (Trade 2)
Updated
First SHOP trade hit our SL. Conditions still stand and we have another momentum signal.
Opening Sustainable Momentum 🧑🏻🚀
Strategy
Signals identify market opening H2 candles through momentum and behaviour change that potentially could indicate a shift in the current price overall structure (Price gaps and ADR %).
Risk
We use the signal candle's highs and lows for entry and stop loss. If price hits the stop loss, it is clear that the shift we expected did not come to fruitation.
Current SL is at 0.25Fib
Stock Pool
Shortlisted Mid to Small cap Tech stocks that have clear D1 and H2 price movement (Not choppy). Historically has shown price movements aligned to high impact moves in on the RUT index.
Focus
Focus is never on the signal candle alone, but it's role in the larger structure and the direction it is inclined towards with a minimum Risk & Reward of 2R.
Stock must be in a pull back or consolidation area waiting for a broad market momentum to ignite it forward.
Character
Trend, Positive Skew
- 10 Oct
- RUT D1 is currently in a range setup.
- The CPI report showed that US inflation is cooling more slowly than expected, missing forecasts. This caused both the RUT and SPX to gap down at the open.
- While the SPX held above the support level it had broken the day before, the RUT’s bear gap was significant enough to test the 2172.90 support level. However, price quickly reversed, and the RUT closed with a bullish hammer pattern.
- The alignment of RUT's H1 bullish hammer pattern and SPX holding above the support line was a signal for a price pivot on the RUT for price to ride the range upwards.
- Trade 1 - SHOP had tested a previous support and continued to move upwards on the H2. I placed an entry position on the high of the H2 candle and got filled.
- Trade 1 - Hits SL
11 Oct - RUT and SPX both started rallying together and most of the market became green. RUT confirmed the bullish hammer by breaking a previous high. SPX's rally further confirmed a successful bullish breakout.
- Trade 2 - SHOP had a momentum signal had tested and retraced previous support. I placed an entry position on the high of the H2 candle and got filled.
Opening Sustainable Momentum 🧑🏻🚀
Strategy
Signals identify market opening H2 candles through momentum and behaviour change that potentially could indicate a shift in the current price overall structure (Price gaps and ADR %).
Risk
We use the signal candle's highs and lows for entry and stop loss. If price hits the stop loss, it is clear that the shift we expected did not come to fruitation.
Current SL is at 0.25Fib
Stock Pool
Shortlisted Mid to Small cap Tech stocks that have clear D1 and H2 price movement (Not choppy). Historically has shown price movements aligned to high impact moves in on the RUT index.
Focus
Focus is never on the signal candle alone, but it's role in the larger structure and the direction it is inclined towards with a minimum Risk & Reward of 2R.
Stock must be in a pull back or consolidation area waiting for a broad market momentum to ignite it forward.
Character
Trend, Positive Skew
Trade closed: stop reached
15 Oct SL Exit - Tech stocks suddenly had a significant drop that clear all our SLs.
The second day it was clear that momentum was no longer sustained. I want to review the early exit to see when I should exit if our trade pattern does not pan out. Waiting till a close below 0.5Fib seems a little too late.
Note
Reflecting on this trade, the momentum candle did not even break the previous high. I should have redrawn the new resistance point and not entered.
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