Do you know how to tell if something is bottoming versus just a bearish consolidation in a downtrend?
Traders and investors often “pick the bottom,” thinking they are getting a great price. Most are traps to the uneducated trying to pick tops and bottoms. Learn the MTS criteria to define quality setups based on the structure of the price pattern.
With all Breakouts and other bullish setups, we need a Price Void (i.e., insignificant resistance to the left) to allow the issue to move higher.
Real Master Trader Trade:
Setup: A downtrend is defined as lower Pivot Highs (PHs) and lower Pivot Lows (PLs).
TMDX was in a bearish downtrend for months. Notice the parallel and declining 20-MA (short-term visual aid) was declining below the declining 50-MA (intermediate-term visual aid).
In January the issue starting going sideways, building a new base of support, with the 20/50-MAs flattening out – a visual sign of supply and demand stabilizing.
On 1/29, it actually was a bullish 1-2-3 Continuation Setup where you could have initiated a position with a stop under the bullish Wide Range Bar (+WRB).
On 2/3 where marked, it gapped down and closed with a +WRB/engulfing candle. That was out “Tell” (i.e., the poker analogy using bar-by-bar analysis suggesting that the pattern is poised for a Breakout and that it is done moving lower).
That was our entry! Because of the overall bullish consolidation and Breakout after -Gap reversal, it had a huge Price Void (i.e., insignificant support to the left) to allow for a fluid swing trade higher once triggered.
Multiple Time Frame (MTF) Alignment:
Although not shown, note that the Telegram trade alert to subscribers (which always includes the technical reason for the trade recommendation) said that the weekly was a bullish New Low reversal; thus the bigger time frame was in alignment, helping to ensure a high probability of success of the stock moving higher into the Void for a swing trade.
Trade Execution and Additional Analysis:
We recommended to subscribers to buy where shown. After entry, we are always in management mode, trailing pivot lows and monitoring price action with bar-by-bar analysis. After entry, you can see in the Closing Trade record how we recommending selling partial lots into strength to protect gains and trailing under a prior day’s low for the last part to manage gains.
Profit: As you can see, the trade made $457 profit (17% return) in an easy-to-manage seven-day swing trade. Had you bought 1000 shares and followed our trade management, you would have made $6,020 profit.
At Master Trader, we define high-probability Setups as aligning with multiple MTS concepts, increasing the odds of success.
Each setup revolves around specific candlestick patterns that reveal trader sentiment, expectations, and the flow of money—patterns that often lead to profitable trading opportunities. Out technical approach applies to anything that moves.
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Master Trader Strategies (MTS): Learn our proven methods for high-probability trades in all market conditions! Directional Swing and Options Trades daily in the Advisory Swing and Options Trader Letter. Master these strategies and achieve consistent trading education and success.