The Real World
Most things in life aren’t
perfect. Trading patterns, and high-probability setups are a direct reflection
of this fact.
The textbooks might be able to show off some picture-perfect setups out of
classic patterns, but more often than not, it’s the ones that are slightly
flawed, but still ‘in the spirit’ of the pattern that come in handy in the real
world of consistent, disciplined trading.
In today’s trade, one stock that exemplified what
I considered to be a high-probability trade was Veritas (VRTS). By the time the
5-minute chart trigger was being elected by aggressive buying through pattern
resistance, the upward or ascending supports, had been broken by a few pennies
on a hammer bar. So, was the pattern and potential trade something to pass on,
if the stock went through its intraday resistance?
In my opinion, the edge still
existed as the stock reversed back into, and then through the pattern
resistance. I like to use the saying, ‘in the spirit of’ when I look for solid
setups, and for me, VRTS fit the bill. The breach came on a 5-minute bar low
with volume that typically plays out well as a candlestick-pattern reversal
low. Using this knowledge in conjunction with the daily perspective lent itself
to a trade with long-term edge, in my humble opinion.
11:38:21
Intraday Setup Alert
Veritas (VRTS)
is forming an ascending
triangle off a daily support zone comprised of the 62% Fib retracement from
the September lows, and the 50-Day EMA. VRTS is down .11 at 33.29
Of course, it’s always nice when the long-term
edge appears in the here and now of today’s trade. Thank youn Veritas.