In early April, my trading account was around $350. Over the last few weeks, I have been practicing The Strat, and I found my way to Jim Bradley. I had a solid start, and I have decided to share my trading here.
Today I made two trades in TSLA, one netting 8%, and the other netting 13.5%. I usually try to limit myself to that one perfect trade, but TSLA was moving so nicely that I could not resist :).
Here is the analysis:
As always, I zoom out to see the story of the higher time frames to determine bias. This will define the direction of the trade I'm expecting to make for the day.
This was the tsla chart about half an hour after the open. The monthly and weekly inside candles were negatives to me, but I loved the daily chart. TSLA was awful yesterday. But it turned around and finished the day as a hammer. As the stock crept up, I was watching for the 725.4 mark, which was yesterday's high. This concept is something that Rob explained very well in his StratTime report from 4/14 on AMD. The second that we hit the previous day's high on a bearish 2d like that, we are knocking out a hell of a lot of shorts.
|(the image is not so great, but if you'd like to pull up your own charts that is the 9:35 candle)|
Beauty. Any "stratter" recognizes that. Poke the high 2u, poke the low's 2d, hammer-counters-shooter, and BAM. Next candle opens at 722.8 and closes at around 726.88. So this setup was not hard to explain. But I want to express something that makes investing in the 1-min candle charts so much tougher. The easiest question looking at this chart is: There was a Momo hammer at 9:32 am! How did I know to avoid that, which would have resulted in an entry of 720.91 and close 721.08 based on breaking the low of the 9:34 candle, and choose the other Strat formation?
First of all, in the world of trading, nothing is absolute :). The stock could have gone to $1,000 for all I know. But I stayed away because there was no break of a candle low. As I have said in multiple posts, it is so important to break out the mechanics of The Strat. Yes, that pattern was a 2u-1-2u, but the most fundamental concept behind the Strat is to determine the aggressiveness of the buyers versus the sellers (and their stops). TSLA opened the day up green, and it kept going for the first 5 minutes. There had been no break of any previous candle lows on one of the smallest timeframes. It was difficult, as explained above, to say the buyers were for sure stepping up while the stock was still an inside candle of the previous day (It needed a break over 725.4). So you have to ask, Where are the shorts? From all of my previous scalping experience, I'll tell you where :). They are waiting for the first break of a 1-min candle to the low, and they are jumping in, betting on this going down again like yesterday. So I waited for the first low to occur, let the shorts load up, and then I'll jump in on the first Strat continuation pattern I find.
The second trade was also another Strat classic, a pivot machine gun at $730.
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Shoutout to @RobInTheBlack. I will never see another chart again without seeing #TheStrat. See More.
And, shoutout to @_JamesBradley__ whose approach to trading has made a tremendous impact on how I trade. See More.