Thread by @HappyGTrades

🔥📚EDUCATIONAL THREAD📚🔥

how do i make my watchlists?

what aspects of charting take prominence over the others?

let me first mention...no i do not have a scanner, no i don’t scan for setups

i have a big list of tickers i go thru every night. that’s what works for me

summary:

1) gap fills + awesome risk/reward
2) overall chart patterns/trend breaks
3) sector similarity
4) “inside days”/mini consolidation
5) levels and price targets
6) go back thru, which will most likely occur based on momo+sector

1) Risk/Reward Ratio

the first thing i look for are tickers with a NOTICEABLY good risk/reward ratio

when identifying this i pretty much immediately notice it if the ticker has a major gap to fill

gap fill setups imo are the best risk/reward

pics attached

2) Overall Chart Pattern/Trends

second thing i look for are any major trends or chart patterns

this is where i look for my symmetrical and ascending triangles as well as head and shoulders/inverse head and shoulders

i draw the TRENDLINES i see, not levels yet

this helps give me an overall sentiment on the ticker

if i see a head and shoulders i’ll be overall bearish, bull flag i’ll be overall bullish etc

use this to give you a direction of where the stock might go

here you want to look for stocks that are pressing up against their TLs and/or have been trading very tight

this will help you to determine how far out on the contract to go as well

if it looks like it’s about to breakout, obviously u can go short expiration date

pics below

3) Sector Similarity

this sorta goes hand in hand with looking at overall chart patterns/trends

use this to predict the next sector to run

if every major chart in the sector looks setup to breakout...there’s a good chance that will be next hot sector

for example the oil tickers now

$OXY: poss sym triangle breakout
$CVX: poss sym triangle breakout
$MRO: bull flag
$BP: bull flag

since all these tickers are technically bullish setups now, will be watching for next week

i’ll see which is leader and can play the laggers

4) Inside days/“mini consolidation”

thanks to my boy @YushTrades for telling me the correct term for this lol

when looking at the daily chart or weekly chart, look for the bodies of the candles to be getting smaller

think about how this may look on a shorter time frame chart

an inside day or a double inside day on a daily chart may just be a symmetrical triangle on 10 min chart

an inside week/double inside week may be a sym. triangle on the 1hr time frame

notice the pictures below:

1) a bigger candle
2) smaller candle
3) even smaller candle
4) bigger move

that’s on daily chart

notice how the same pattern is reflected on 10 min chart!

simply a symmetrical triangle

this is one way to find what will move very soon!

5) Levels and Price Targets

this is where i chart out my horizontal levels

i look for the stock pushing against key levels or retesting backwards to the previous key level, i’ve went over this before

use previous support and resistance levels to chart breakout points +PTs

6) Narrow List

to narrow the list figure out

-which patterns will likely breakout tomorrow
-inside days to help you see what will get a big move tomorrow

ones that aren’t as ready as the others can be eliminated

make sure your tickers have enough OI and volume!

damn i forgot the $MRO and $BP charts