Master Trader Buy Setup: A Master Trader Buy Setup is a retracement and bullish reversal on support in an uptrend, something we can easily teach to an 8-year-old using Master Trader Strategies (MTS). With all bullish setups, we need a Price Void (i.e., insignificant resistance to the left) to allow the issue to move higher.
Setup: The third blue arrow is the Buy Setup we recommended to traders. It followed an initial Breakout and was a retracement and bullish reversal on support in an uptrend, just like we defined previously for “little Johnnie.”
Bullish Price Action Leading to the Setup: Setups are not taken in isolation; rather, the overall pattern and concepts are used to assess the quality of setups.
The first blue arrow shows a bearish Breakdown followed by a 100% retracement back to resistance and bullish consolidation over time above the 20/50-MA. That’s bullish!
The second blue arrow shows a bullish Wide Range Bar (+WRB) Breakout with a Void. That’s a buyable initial Breakout the next day over the high of the +WRB, with stop under the +WRB.
After a bullish inside bar (what we call a Master Trader Bullish 1-2-3 Continuation), it advanced and retraced, setting up the high-probability Buy Setup described above.
Multiple Time Frame (MTF) Alignment: Although not shown, the weekly and monthly charts were also in bullish uptrends with a Void, helping to ensure a high probability of success of the stock moving higher on the daily Setup.
Trade Execution: We recommended buying the stock over the high of the bar shown with a stop under the lows of the reversal. Because of the explosive quick move up, we sold 1/3 of the position into strength two days later, and trailed the remainder.
Profit: As you can see, subscribers yielding a generous $850 profit (7% return on capital) in an easy-to-manage 10-day swing trade. Had you bought 1000 shares and followed our trade management, you would have made $2,780 profit.
Conclusion
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