THE 4HOUR 180SMA Setup
A FREE LESSON FROM MY UPCOMING 6 WEEK OPTIONS TRADING COURSE
. Timeframe = 4 HOUR CHART
. Moving Average = 180-PERIOD SIMPLE MOVING AVERAGE
To become a successfull & consistently-profitable trader, you only need a few go-to setups that work for YOU, that you can eventually master and make your own. The 4 HOUR 180SMA setup is quickly becoming one of my go-to's, responsible for $1,700+ of profits last week in my small account.
The goal of this setup is to trade stocks long or short as they cross over their 180-period simple moving average. I love this setup for a lot of reasons, but mainly because it is easy to identify, and all the variables of the trade are set-in-stone before ever entering the trade
ENTRIES & EXITS
We'll use the example of a long-trade I took last week using this setup on $XLF. In the image below, I have circled my entry. My goal with this setup is to go long the stock when it makes a strong move through & above that 180SMA. I am NOT trying to take an entry on the very-first few ticks above that MA, rather, I am waiting til it has clearly crossed that level to enter.
Because we are playing the 180SMA on these setups, once we can find and identify this setup, we already know where we want to take out entry. This is big, because most new traders struggle with the emotions of wondering when it's time to enter a trade.
Even better, we already know where we will exit if the trade doesn't work. THAT IS THE BEAUTY OF THIS SETUP. It completely removes the emotions not knowing when and where to enter & exit.
After you take your entry, only TWO THINGS CAN HAPPEN NEXT = the trade works, or it doesn't. And because we are taking low-risk entries just above the 180SMA, if the trade fails and ends up falling back below this level, the loss is modest. However, when the stock continues to trade above and away from the 180SMA, the gains can be big.
On this $XLF trade, my options returned 53% in just a few hours..
Take a look at the chart from my trade on $JMP last week using this setup. Once I took my entry, the game plan is already set. Despite the pullback, $JPM NEVER threatened to break below the 180SMA. By practicing patience, and sticking to my game plan, I was able to close $JPM a few days later for a 25%+ gain on my options. Had $JPM broken below that 180, I would have taken my tiny loss.
$FB was a beautiful example of this setup a few weeks back, where I made 70%+ on my options on this trade. Though I only held it for a few days, as you can see, if you have patience after your entry and stick to the exit-plan, these setups can lead to some strong, long moves in your favor.
EASY TO IDENIFY
LOW RISK/HIGH REWARD
PRE-DETERMINED ENTRIES & EXITS
LONG & SHORT
ALL THE VARIABLES OF A WINNING TRADE
6 WEEK OPTIONS TRADING COURSE
If you want to learn the basics of options trading, more low-risk high-reward setups like the 4HOUR 180SMA, and get first-hand insights into the daily-preparation of a full time trader, join me for my 6 WEEK OPTIONS TRADING COURSE starting on 2/18/2019!
Members will receive private video-content and downloadable PDF materials at the beginning of each week, and will learn first-hand the daily process it takes to become a consistently-profitable trader as we review actionable-setups and create our game plan together every morning in our private TRADE PREP live streams.
Next month's course if FREE to all Focused Trades members!
For ONLY $10/month, become a member of the Focused Trades family, and gain instant-access to our private video-library, training materials,private chat room, morning TRADE PREP live streams, and FREE access to ALL 2019 courses.
Join our free Facebook group for daily-insights to my trading, and subscribe to the YouTube page for free trading lessons!
FREE OPTIONS TRADING LESSON: OPTIONS 101
NEW TO TRADING? START HERE