Trade Taken At The Art Of Trading : EZPW

Got a question from a new fellow ART OF TRADING member asking what i saw in the EZPW trade to make me alert it as a long Friday afternoon: Here it is explained. Hope it makes sense!

One popular pattern i use here all the time is called A HIGHER LOW SETUP: That's when a stock that has been trending nicely with conviction. i.e.: Strong volume up days that take the stock higher cleanly and with conviction........ followed by a few days of low volume days that either move slight lower or SIDEWAYS.

Then i start to look for hints of a reversal BACK HIGHER on stronger volume indicating a strong chance that buyers are returning back into the stock, thus creating enough demand to create a HIGHER LOW and now this gives us:

A: A decent entry LOWER RISK ENTRY.

B: Gets us on board of a potential BIG winner.

C: We do not need to be too stressed out about the eventual breakout to new highs since we got in at lower prices and can potentially eliminate any trickery that often happens during breakouts caused by the breakout traders.


Hope this helps!

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