Market leaders often like to 'FAKEOUT' fomo traders on the first ATH break of 3588ATHs - price runs up and through to say 3595-3615, making retails think the market is breaking out then this big +3% green ends up being the end of the irrational bull run.. Especially into round numbers like 3600. That said its worth noting, this is my LAST bear ticket. Im not a perma bear who will be constantly shorting all the way up lol. This is a one off ATH/ round 100 short. If this isnt a a bull trap 'fakeout' then ill be buying the momentum/ trend at 3630 for example. Looking for 4000.
Great RR on this trade too. Exact SL can be alot tighter than mine at 3625. This is just a worst case SL based on mondays close & avoding becoming a fakeout victim. ill adjust in real time as the market trades but profit multiple shouldnt ever be less than 2x on this kind of opp - so if my SL is 30pts my TP at least 45-60pts. 3305/10 is a more realistic SL BUT track the market into th eclose and dont get stopped out until we see tuesday's market trade. entry at 3595 will be a +2.4% day so i dont expect going much higher than this (hence 3605 is the most likely SL) - but in the off chance we do go to 3630 im not gonna be stopped out until tuesday is trading as we dont know how big this 'fakeout' will be.
ALOT of traders try ATH shorts get stopped out bc their stop is only 2, 5 or 10pts above - guess what? Market makers KNOW and track their average SL price to manage their risk, they do NOT care about ath price. SO since every broker is tracking their average SL exposure, and all traders put a tight SL on 5pts above - this means the MARKET KNOWS where the 'markets' SL is. Which causes price to trade there and then everyone gets stopped out. we have to game theory the dumb money and asumme everyone will put their stop +5 or 10pts and either a) not have a stop - manage actively, b) put a stop far away from the dumb money or c) develop a SL strategy based on time - tuesdays close).
LONG 3595
TP 3430
SL 3625
Great RR on this trade too. Exact SL can be alot tighter than mine at 3625. This is just a worst case SL based on mondays close & avoding becoming a fakeout victim. ill adjust in real time as the market trades but profit multiple shouldnt ever be less than 2x on this kind of opp - so if my SL is 30pts my TP at least 45-60pts. 3305/10 is a more realistic SL BUT track the market into th eclose and dont get stopped out until we see tuesday's market trade. entry at 3595 will be a +2.4% day so i dont expect going much higher than this (hence 3605 is the most likely SL) - but in the off chance we do go to 3630 im not gonna be stopped out until tuesday is trading as we dont know how big this 'fakeout' will be.
ALOT of traders try ATH shorts get stopped out bc their stop is only 2, 5 or 10pts above - guess what? Market makers KNOW and track their average SL price to manage their risk, they do NOT care about ath price. SO since every broker is tracking their average SL exposure, and all traders put a tight SL on 5pts above - this means the MARKET KNOWS where the 'markets' SL is. Which causes price to trade there and then everyone gets stopped out. we have to game theory the dumb money and asumme everyone will put their stop +5 or 10pts and either a) not have a stop - manage actively, b) put a stop far away from the dumb money or c) develop a SL strategy based on time - tuesdays close).
LONG 3595
TP 3430
SL 3625
SHORT 3595