Happy Monday! I’m Anthony Speciale, and welcome to A Better Way to Wealth.
Today, as promised, I want to share an actual trade alert and show you how it transpired.
Hopefully, this will allow you to better understand this process and just how simple it can be.
This is a trade that I originally shared with my colleagues here at Traders Agency.
I thought sharing the inside nuts and bolts of this trade with you today would give you the opportunity to see what a simple trade alert looks like and an example of the opportunities that come with it.
(*Note: For a closer look at the document being referenced today and the details of this trade, please review the attached video footage.)
The Chart Analysis
The first thing I’m giving you today is the chart analysis.
I’m doing this because I want you to first understand what I see.
The best way for me to do that at this time is to lay it out for you as simply as possible.
In today’s referenced document, you will see the following information on this particular stock:
“The newly appointed, slightly ascending 73.50 support can contain weekly selling pressures, above which the 81.75 – 84.50 area is now a 3 to 5 week objective.”
With the above sentence, we know where support is and we know where resistance is. Now we need to find out what to do with that information…
The text continues:
“This was confirmed by a daily close 1% beyond old resistance that price action failed to close above last week. This BUY signal would be considered a FAIL breakout if price action were to fall below 72.25.”
Looking a the above statements we can see that, if this buy signal rolls over and fails, it would have basically been eliminated at 72.25.
However, if things should transpire and continue to move onward and upward, we would now have a target somewhere between 81.75 and 84.50.
The Eight Ways to Play
In this type of situation, there are eight different ways we could play this out…
This part may appear to be a bit overwhelming at first, but it’s not meant to be.
As an individual trader, your approach to the market will depend on your individual comfort level in the markets.
Now, your comfort level could be like mine where I trade the full E-Mini contract, it could be trading a partial contract should you not have the finances to trade a full E-Mini, or a Micro, which is an opportunity as well.
Now, if you aren’t the type of investor who trades futures, don’t worry!
With this plan, there are two different ETFs that you can trade, including the USO or the leveraged UCO ETF.
Now, what if you’re an options trader?
Well, that’s okay too, because there’s an option on the full futures contract, on the USO and on the UCO!
With that in mind, I want you to know that, when I offer you a trade idea, the way I’m trading it may be different than the way you will and that’s okay.
In the end, the objective is the same… The objective is to take advantage of the opportunity at hand. That can be done in whatever means best fits our unique trading styles.
Personally, when I chose to step into this trade, I did so by utilizing the full E-Mini contract.
Let me show you how that worked out in the end…
If you review the charts in today’s video you will clearly see that, in the beginning, we had a gap that offered us our initial profit potential with a long and target specifically placed based on our studies.
For the trade, we took that long as the price broke out and booked a profit of around $83.00 as it moved along.
It was at this point that I decided it was in our best interest to get out of this trade.
Now, the upward momentum did continue to transpire a bit higher after we pulled out, but it just wasn’t necessary for me to stay in this trade any longer.
I knew where I had a conservative target, where I was able to cash in my position and exit the trade. That’s exactly what I did.
Now, with a realized profit or loss of $72,488.00, I could understand how some of you could be a bit shocked.
Personally, I trade with a lot of 10 contracts and that is a large position size.
I know most of you will not trade with that, but you can divide this down to one contract, which would be closer to $7,248.80.
You can also multiply it into however many contracts you would be likely to trade if you’re trading an E-Mini full.
If you’re trading a reduced size or a micro, it remains the same. You would be able to reduce this number down to whichever number best matches your current situation.
There was even a gain with this trade in the options plays!
As you can see, by utilizing this strategy, there are a multitude of ways you can take advantage of opportunities such as this one when they present themselves.
The Key to Making This Work…
Don’t fixate on the profit potential…
I want you to focus on the opportunity of eight different ways to take a single trade.
Now, I’m not advising that you take this trade in more than one way.
You don’t want to overexpose yourself to it!
Instead, I’m suggesting that you find out which methodology you’re most comfortable investing with and run with it.
Of course, as is the case with any investment in the markets, there is a loss potential in any of these investment opportunities.
That’s why we want to also have a stop position.
Fortunately, in this instance, this position worked out properly, doing exactly what we anticipated it would.
The long-term analysis told us where the support and resistance would be and, after taking a good chunk out of the middle of that, we were paid well.
We, of course, look to continue to repeat this process over and over as the market continues to present these opportunities in the future.
One More Thing…
There’s another reason I want to show you guys this strategy today, however…
I want you to realize that these types of opportunities don’t happen every day.
These opportunities don’t even happen every week or month!
This does happen, however, whenever the market decides to give that opportunity.
It could happen repeatedly or it could be very sporadic. We just don’t know.
There have been times when I’ve sat on the sidelines for months at a time and not once has my cash ever deteriorated.
Taking bad trades, however, will deteriorate your account and that’s not something we want to do!
Honestly, there are times when it is better to be on the sidelines rather than deep into the market.
Today’s market conditions are offering us a great time to look into value investing or short positions.
If you’re looking at taking longs, however, unless you’re looking to buy the dip on undervalued companies, you may want to hold off until this recent volatility settles down a bit.
Moving forward, we will continue to play back and forth between the fundamental and technical aspects of trading.
I’m going to do this because I want to give you the best opportunities possible towards our end goal of A Better Way to Wealth.
Subscribe today and receive daily advice right in your inbox, guiding you to a better way to wealth.