Who Else Caught This Move on $SPY?

Do you see the pattern? Another bearish divergence that played out perfectly near the $554 level.

Let me share a couple rules I have learned to follow over the past few years.

1. Don’t trade before 10:30am (1 hour after market open. – This eliminates the higher volatility and usually is able to pick a more profound direction.

2. Only take trades off of good setups. – This divergence is a good example of a good setup. You have a clear picture where you can place your stop loss (right above the high) and place the trade. Also breaking VWAP, and the 200ma are good places to trade as well.

3. Set percentage goals on your position size. I NEVER look at the percentage of my account gain, I only look at the percentage that my position size gain is. My usual PT is 30%. Looking at it from this standpoint in my opinion helps grow your account much more consistently.

Those are just a few things I follow to a T. I definitely encourage everyone to start looking for these types of divergences and just sticking to a strategy instead of flip flopping around which is where most go wrong.

Stop looking for the home run, baby steps!