Art Of Trading: price targets

Thursday, August 31, 2017

Pop Quiz Answer: Symmetrical Triangle

Hey folks!

Earlier today, I gave AOT members a "Pop Quiz" ....

Two questions:

1: What is the technical name of this pattern seen in the BABA chart below?

2: And what are the price targets for this chart pattern?

The BABA chart shown in the POP QUIZ was actually from April to July of 2017....

I did that purposely so that I can show you what BABA did after it triggered and broke out...

And just for fun, I decided to also give my Twitter Followers the same POP QUIZ !!

First 5 correct answers will get a FREE gift from me!!

Thank you to all who participated in today's POP QUIZ and many of you did !

So here are the answers i was looking for:

The chart pattern shown in the above BABA chart is technically called a: Symmetrical Triangle

Here's what it looks like:

..... and here's another example ...

Symmetrical triangles generally are "neutral patterns with equally sloping lines on either side that converge into a triangle's APEX upon breakout time....

GENERALLY they break in the direction of the prevailing trend.... so in BABA's case, the prevailing trend was clearly UP so it was UP, UP and AWAY for BABA!!

It surely did not disappoint !

So based on that symmetrical chart pattern highlighted in BABA, the ideal technical entry would be to go LONG on a breakout thru the apex of that symmetrical triangle(so at the $145 area).

Two targets for this trade:

First target is: $153

Second target is: $160

..... and here's how BABA did after that SYMMETRICAL TRIANGLE .....

As you can see from the above BABA chart, the $153 and $160 targets were fairly accurate for that particular trading pattern! Don't ya think?

A few of you got it spot on so I'll contact you and email you your free Trading Ebook gift tomorrow morning!

I hope this helps!

As always, if you have any questions, comments or feedback, please let me know!!

Happy trading!

Join the 'ART OF TRADING' Today !

How To Calculate Price Targets

Hey folks,

I got this question about once or twice a week !

It's actually quite simple however just like MANY things in trading, there's a lot more "art" to it than science.

So here's a quick educational post on how to calculate Price Targets for trading setups.

Keep in mind, that Moving Averages such as 50 and 200 Day MAs, big volume Gaps such as Earnings Gaps, market strength(weakness), a stock's momentum and a stock's short interest also play a role in this but for simplicity's sake, I'll keep things as simple as possible for this educational post.

First thing to do is:

Find and chart a setup as you'll see in the VECO chart below....

Take a look at the attached VECO chart below... You'll see an "Inverse Head and Shoulder" pattern...

I then calculate the difference between the top of the pattern(technical setup) to the bottom of the pattern(technical setup)....

Then I add that number to the breakout number and you'll have a good first target to work with.

And here's a more recent example in HD(bullish flag pattern), which was an 'AoT Top Pick' actually in June 2017....

...and this BABA "BULL FLAG" setup which was sent out a few weeks ago

Of course, nothing in trading works 100% of the time but you'll be surprised how often price targets get hit when using the method I showed you above....