Bear Bull Traders Trade of the Week September 18, 2020
Counter-trend trade based on VPA that often occurs at the top/bottom of trend.
- Any time of day
- Stock is in play.
- Clear intraday trend.
- Should be in the accumulation (bottom) or distribution (top) phase.
- Climactic volume on the 1 minute and/or 5 minute chart. Should be 3-5x normal volume. Should be extremely obvious.
- Ideally candlestick anomalies, such as high volume hanging man, hammer, or reverse hammer.
- Ideally, the climactic volume should be slamming through a key level and then reversing right back.
- Candlestick immediately following the climactic volume
- Low/high of day. Size correctly, do not stop out early unless very clear signal.
- 25-50% off at 2-1 r/r
- 25% off at VWAP or nearby support resistance.
- 25-50% until a reason to sell
- Do not chase an entry. If the r/r is not in your favor, do not get in the trade.
- Do not take trade if spread is unreasonable. ($0.2 for low priced stocks, $0.75 for higher priced stocks)
- Avoid stocks over $500
$CCL was on my watchlist because it was gaping down on volume after being strong the previous few days. There was a big rotation from tech stocks into the travel sector such as $CCL, $NCLH, AAL, and DAL.
The stock was very weak into the open and formed a distinct downtrend. This really caught my attention because after a few strong days previous, it was a great reversal candidate.
Climactic volume appeared when it broke the low of day and a significant daily level. I took my entry right after that climactic candlestick closed.
- I took my first partial at 2:1 r/r (also happened to be at the top of a range).
- After taking first partial, I moved my stop loss to break even.
- Took another partial at VWAP/nearby support/resistance.
- Hold the rest until reason to sell.
Once $CCL could not hold above a significant resistance level, (200 SMA combined with the premarket low), I decided to get all out because there was a good possibility it would come back to my break even price and stop me out of the trade.
Below is the trade on the 1 & 5 minute charts: