The Strat 1-minute Trade in BABA Nets 35% Gain

The material and results shared in these posts are made possible by using Trade Unafraid. Trade Unafraid evaluates personalized criteria and selects the most favorable option, allowing traders to come out on top. With a “hands-off” approach, Trade Unafraid intelligently navigates the bid-ask spread and gives users the power to place “conflicting orders.” By fully automating trade entries and exits while still allowing you to manually override anything, Trade Unafraid compels user discipline and adherence to strategies.

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. 

As of around April 1st, my trading account was at 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 last week, and I have decided to share my trading here.

This morning's trade was in BABA. Due to the news of the investigation, there was a sharp jump this morning, with the shares opening up at around at 237.89. According to a purist, this might not have been the best Strat trade. But I will explain why I liked it. 

This is an image of baba around 50 minutes after the open (after my trade occurred). It was a Monday, so we didn't truly have a weekly candle yet, and the monthly chart was still an inside candle. That being said, to me, the main benefit of The Strat is, as Rob Smith has said, to determine who is more aggressive between the buyers and the sellers. If I were to enter a trade in a good setup, I could most likely achieve full timeframe continuity. The week was for sure going to open up 2U, and I loved seeing the shooter candle on April 9th. So, to me, I had a strong Strat narrative that the buyers were going to be more aggressive. Now if we zoom in to the 1-minute charts...

We here find the perfect setup. With the 3 candle we now have price discovery, and a broadening formation. In the next candle we have the slightest 2u, breaking by 5 cents before the sellers take control. And then, you can literally see those sellers drying up. The next candle is a red hammer of 70 cents, followed by an even stronger hammer. Now, I think it is important to highlight this second hammer. My biggest question when trading The Strat is to how to set a tight stop. I know I am terrible at this, unless it is COMPLETELY clear and defined. I don't like a $15 stop, let's say, because I see that reverse so often. The solution I am working with is looking for Strat setups in which the stop is naturally tight. Because the sellers have dried up (as you can see by the small hammer), if we get a break of the next candle, I have reason to believe that the buyers are back. And if they are not, the setup has built a 40-cent stop on the underlying into my trade (using Trade Unafraid's Green-to-Red exit tactic, which will watch for a poke above, and then a hard reverse).

This was a beautiful entry, and the rest was history...

Trades

Result

Account Value

Below, there is a video attached showing the trade executed in Trade Unafraid software. 

Things to note in the video:

1) I used the manual Close button a minute into the trade to simultaneously cancel a resting limit order and place a market order for qty of 1 when BABA looked to be retracing from its highs at the 1:30 mark.

2) At around 3:55 in the video, I had a surprising fill at 1.68, when the option jumped from 1.6 x 1.65 to 1.61 x 1.75 and then right back to 1.6 x 1.65 in seconds.  You can't catch those manually...

3) Sit back, relax, and enjoy this trade playing out on its own.  That's what I did :)

Video: