«Here are 4 Entry Techniques.»
Coach Tyler here. We’ve spent the last month exploring the S.T.E.P. Swing Trading System in our weekly Coaches Shows. Last night our focus turned to the Bullish Breakout pattern and how to trigger into the trade. It reminded me of the inescapable tradeoff between confirmation and price. Recall that “confirmation” involves waiting for a stock price to move in the right direction to confirm the pattern before you enter.
It seems that more confirmation is better, but that’s not necessarily the case. More confirmation always results in paying a worse price; less confirmation results in a better price.
Take the Bullish Breakout, for instance. Suppose resistance sits at $44.48, and the stock has an Average True Range (ATR) of $2.77. Here are the potential triggers listed from most to least aggressive. Note the most aggressive has the least confirmation but offers the best price. The least aggressive has the most confirmation but offers the worst price.
- Buy when prices break 1 penny above resistance ($44.49).
- Buy when prices break 10% of ATR above resistance ($44.48 + $0.27 = $44.75)
- Wait until prices close above resistance, then buy when prices go 10% of ATR above that day’s high (? + $0.27 = ?)
- Wait until prices close above resistance, then buy when prices go 25% of ATR above that day’s high (? + $0.69 = ?)
Which of the four trigger techniques you use comes down to personal preference. While it may feel like there are a lot of choices, you can simplify them by simply remembering the confirmation/price tradeoff.
🇺🇸 2 Days left › the 4th of July sales end on July 8th!
Until July 8th, we are offering 1-on-1 Coaching Program, the Annual Pro Membership, and Premium Systems at a great discount!
✅ [ NEW! ] Hard 14 Moving Averages Trading System – From $1,497 to $997
✅ Trading Labs Annual Subscription – From $1,164 to $997/Year (Last chance to get Trading Labs at this price! After the 4th of July sales we will be increasing the price point.)
✅ Coaching Program – From $3,997 to $2,997
✅ S.T.E.P. Swing Trading System – From $1,497 to $997
✅ Cash Flow Condors Trading System – From $1,497 to $997
✅ Bear Market Survival Guide – From $1,497 to $997
✅ Tackle 25 Covered Calls System – From $497 to $297
✅ Annual Pro Membership – From $1,164 to $897/year
Video Of The Day: Trading Concept Check: Entry Techniques
Entry Techniques are an important part of the S.T.E.P. Swing Trading System that will help traders avoid impulsive trading decisions and avoid fakeouts or failed breakouts by waiting for an appropriate amount of price confirmation above an identified trigger price.
The S.T.E.P. system offers three techniques for entry criteria ranging from conservative to aggressive. Disciplined application of these techniques will help traders be more systematic a disciplined about their approach to trading.
Chart of the Day: Bullish Breakout Entry Techniques
This bullish breakout example shows various ways of calculating the trigger on a bullish breakout trade.
Today’s line up
Tales of a Technician: Why Yields Dropping is a Good Thing
There are some interesting developments in interest rate markets this week.
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode with Coach Tyler Craig where he talked about the S.T.E.P. Swing Trading System or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trade Masters 7:00 PM EST
Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.
Trading Justice 483: Covered Call Management
In the latest edition of the podcast, the boys break down the importance of management of the covered call.
- Manage the Strike Price: this is a subjective decision traders must make if they do not want to get the stock taken from them in an investment, as a position trade, the decision is typically made at strike sold.
- Management of Net Liquidation: This concept goes to managing the downside risk in a stock investment and is based on an understanding of the Option Greeks.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
