As Master Traders, we trade liquid stocks, ETFs, options, or futures with a compelling pattern on Multiple Time Frames (MTF) using Master Trader Technical Strategies (MTS).
In this Chart of the Week, we’ll review a trade shared with subscribers last week on Morgan Stanley (MS) and manged real-time in the Green Room.
This is what we call a No-Brainer +Gap Igniting Breakout quality Setup using MTS:
After the Breakdown and Failure to follow through lower as bearish breakdowns typically do, MS moved up to the price resistance area where it had failed to get above before.
Notice the sideways price movement above the rising 20 -and 50-day moving averages at the price resistance to the left just before the gap up.
That type of price action — at price resistance — signals that demand from buyers is now absorbing the supply to the left, and that is bullish, suggesting higher prices.
The gap above the consolidation (red line) was a Pro Gap Signal to day traders and swing traders to buy in their respective time frames.
With Easy Trade Management Using Master Trader Intra-Day Pivot Management!
Trade Management is based on factors such as the time frame you are trading, the Price Void (target) and the broader market bias.
Although the daily and weekly charts still are bullish, that gap higher presented an opportunity to take partial profits and protect our profits with trailing pivots intra-day on the 15-Min. time frame.
Master Trader Tip: The time frame used is a choice; there isn’t a right or wrong time frame. However, shorter time frames will have a higher probability of exiting a trade sooner, which may be a whipsaw. Lower times tend to have more wiggles.
As you see, and using the bullish gaps to sell part of our position, it was easy based on the systematic plan of trailing!
The upward gap and selling also occurred in the broader markets and the Financial Sector ETF (XLF), which brought selling into MS as well. Swing traders could be holding based on the bullish gap above resistance on the daily time frame.
One “red-day” does not negate the bullish big picture analysis for swing traders.
However, taking profits or not short-term is a choice.
Swing trading requires the willingness to potentially give back profits to attain a probably larger one based on the bigger picture analysis.
Learn how the Master Trader Gap Trading Course can teach you to profit from morning gaps.
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Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
