Trading Guide - Chapter 1
A basic understanding of technical analysis, price action and candlestick charts is recommended for this guide. Extra reading links to these topics can be found at the end of the guide.
This guide will concentrate on the long trade setups.
Trade Cycle
Momentum stock at support
  1. Enter with bullish indicators (bullish overall, high trade quality) at support with an initial stop.
  2. Stock rallies with less than bullish indicators, use a trailing stop.
  3. Exit or tighten stops near T1/T2 targets or at a short term overbought resistance area.
trade idea
At the beginning of a rally there can be high uncertainty and the initial stop should be kept as wide as possible.
There is a narrow price area for optimal trades.
High trade quality areas happen at support with tight stops and maximum T1/T2 target profits.
Breakout Trade
  1. Enter trade on breakout level or at a local range support area prior to a breakout.
  2. The stock breaks out, use trailing stops.
  3. At the breakout target or a newly formed resistance area tighten stops or exit the trade.
trade idea
Breakouts can occur with bearish indicators especially near new high areas as these can also be good short entry areas.
Trade Types
stock alerts sample
Trade Timeframes
Trade Profit Expectations
Long momentum and breakout trade profit will correlate to a stock's size and industry/sector.
stock profit graph
Chapter 2
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Disclaimer: This is NOT investment advice, just general help and opinions. Please check with a registered investment advisor before making any investment decisions. This document may contain errors. Chapman Advisory Group LLC employees are not investment advisors. Please review:
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