Trading Apple Inc AAPL Against Common Chart Setup
AAPL Apple Inc Stock Chart 1-6-1-20
Tape reading is different than chart reading. Tape reading looks for trades, chart reading looks for setups.
Sounds similar but it's not.
The reason many traders struggle to get paid is depth. The depth of the trade idea is weak and shallow. I call this "building an argument."
Chart readers look for one, maybe two reasons the place the trade. Tape readers find the trade setup and also determine the odds of making money.
The setup is only one small part of the argument.
Tale this chart of AAPL Apple Inc. The breakout to new highs is impressive, but the breakout was followed by an inside day. That should not happen if the breakout is real.
The next likely move in the stock is lower. If long, now is the time to tighten your stop loss. If looking to buy, now is NOT the time. If you are a professional, you can consider shorting for a day or two. (VERY advanced trade not for newbies)
Before you place a trade consider two things;
- Answering the question "Is it a buy or sell?" should be obvious, BUT there is a deeper question to ask, "Is it a buy or sell NOW?"
- How many reasons can you find for a probable profit? Look beyond the setup and build an argument for accepting risk.
Have a great day.
Pete
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