My favorite set up

[johnblockbuster]

Looks like this company got beat up after earning. I dont pay much attention to news but from what I can see is a bunch of people complaining about this stock being undervalued and beaten up.

Well this is where I just come in and look for an entry model.

Now this is a dangerous trade… because of course; it’s in a down trend.

But this entry model is a reversal model. (I have entered on this last 4 hour close and mainly trading the 4 hour on this)

I love reversals because it gives me a clear stop loss and a clear take profit. They almost always treated as a risk 1:2 trade for profit minimum for me

I will not be greedy with taking profits since this is in a down trend (I will defiantly leave shares on the table as runners and update a new idea as we get close to TP1 range.

This is not an investment for me, just a swing trade that hopefully will play out quickly.

Reason for entering

1. Inversion on the 4 hour FVG on the last green candle
2. Smart money took out all stop losses after earnings which is what you will see I have marked as SSL (Sell Side Liquidity)
3. We have clear targets now that we see the Bulls have stepped in with big time buying pressure after we made the new lower low. -Clear targets meaning we must now rebalance atleast 50% of the leg down that we related from the last swing high. This is what price tends to do.

Since it is showing me strength and now starting what’s called an OB FVG (Orderblock Fair Value Gap) on the 4 hour time frame than this indicated to me we could take way more than 50% of the drop and potentially do some damage to short sellers.

Now this idea can get totally obliterated and thats why stop losses will be tight under neath the swing low we just made. But if the 4 hour shows us a v-shape recovery this week then this trade could move pretty damn quick for us.

NOTE: MY STOP LOSS WILL BE MOVED TO BREAK EVEN AS PRICE GETS NEAR $3.50!

I will be trimming probably 60% of profit between $3.50 and $3.70

Stops at break even

The rest of my shares I will target the sub $5 range for, and keep a few hundred shares for the lotto ticket long term play

Ask me questions if your confused about my analysis.