It Pays To Have A Plan

by | May 2, 2020 | Uncategorized | 0 comments

Another word for trading without a strategy is called gambling.

And that’s not what I’m about. 

I’m a firm believer in having a strong, consistent, and proven trading strategy to generate profits in the markets.

Just take a look at how my trading plan traded the markets in April.

 

 

And with Daily Deposits you get a daily strategy that puts you in a position to generate consistent returns day after day.

Today I’m going to walk you through my strategy that has crushed the market returns over the last two months. 

 

Daily Deposits

 

Daily Deposits is a momentum trading strategy that is based on a unique blend of technical analysis and indicators.  

Technical analysis is a tool used by traders to time and predict the direction of the markets.  

And if used correctly, a trader could pull down massive returns in a few minutes of trading!

So… in order to successfully achieve these high returns, I have combined a set of indicators that can pinpoint explosive moves in the SPY!

 

Premarket Analysis

 

Daily Deposits is based around a set of momentum indicators that were selected to identify market direction prior to the market open.  

And recently, these have been put to the test in one of the hardest markets to trade in history!

The pre market analysis starts with:

  1. The global overnight outlook
  2. Sector review to identify strength in the US Markets
  3. Premarket momentum and technical analysis review on the SPY

When analyzing the premarket session there are two primary things you want to reference when determining the trend of the markets.

The three pre market trend signals are:

  1. The overall trend is positive or negative
  2. The moving averages support the direction of the trend
  3. TTM Squeeze signaling a rush of momentum soon to hit

For example…

 

Source: ThinkorSwim

 

What I noticed in the premarket session:

  1. The overnight trading session started with a TTM Squeeze
  2. TTM Momentum Indicator pointed to strong trending market to go lower
  3. 10 MA < 20 MA pointing to  large negative price action

In the chart above you can see that using my pre market momentum indicators you are able to quickly identify the trend of the markets.

 

The Trade

 

This massive trade was spotted by the system in the Trade of the Day in the pre market session. 

Since there was a squeeze still active, it’s best to wait and see what price action does after the open.

In this case, the best trade was to wait for a pullback and then wait for confirmation that the stock is still in a downtrend.

 

Source: Thinkorswim

 

As we can see, right at the open the stock continued sideways in the squeeze pattern and traded right up against the overnight resistance line.  

This gave us a great entry level to get into this trade while we wait for the squeeze to fire off in the direction of the trend.

I didn’t chase the price or get anxious that I might “miss the trade” in the first 5 minutes of the trading day.

Why?

Because I had a plan and course of action to trade this price action.

And members of Daily Deposits received this game plan as the trade was setting up.

 

 

And how did we make out on this trade?

 

In at 1.40 out at 1.96 for 40%. Still holding some.  Sold the rest at 2.10 for 50% gains!

 

Source: Thinkorswim

 

And you can see on the plot of the price of the put options how I might not have captured 100% of the move but got a good chunk of it as the markets continued lower all day.  

 

Wrapping Up

 

It’s important to remember that technical analysis is a tool used by traders to time and predict the direction of the markets.

And if these indicators are used correctly – a trader could pull down massive returns in a few minutes of trading!

So… in order to successfully achieve these high returns, I have combined a set of indicators that can pinpoint explosive moves in the SPY

Ready to learn more?

Click here to learn more!

 

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