Mouse-Over the Trade You Would Take
You currently have 0 Shares of this stock, but you are looking to make a trade on it based on the daily chart on the left. You have the intra-day action on the right and it is near lunchtime. What do you decide to do?
| Long | Nothing | Short |
Did you manage to choose what I would have done on this trade? If so great job, but now let me explain what I was looking at on this trade and why I made the decision that I did on it.
The Risk vs. Reward Trade Reasoning Below
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Now the full chart after the point of this trade was on the VXX, which is a chart measured on the fear index. I only chose this chart based on the pattern and nothing really to do with the fear index as this chart patter clearly gives you a great risk vs. reward on the trade and here is why.
You can easily take this trade just under the $30 area and give yourself a risk of .25 for the entire day. This essentially gives you a great risk vs. reward trade and your max loss would be around 25-35 cents if a new high forms and you know the chart was very extended, giving you a very large potential reward, several dollars possibly, all for the risk of .35 max, a great setup in any traders book.