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.
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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.
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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.
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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!
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Posted by Scary-Compote-3253