Trading Education Thread time 1/8

There are really only two types of trading styles:

1. Mean Reversion Trading
2. Breakout Trading

All other "styles" are merely indicator-based trading systems.

This thread will specifically discuss Breakout Trading

THREAD on @Tradytics
Let me start by saying I do get a small kickback on every referral but I only do this for services I use, trust and love. In the following thread I’ll go over what my favorite features are and how I use them.
•
Sign up @ https://t.co/dO4RSNuQfH for 10% off

DARKPOOL:

DP are private exchanges for trading that are not accessible by the investing public. DP came about primarily to facilitate block trading by institutional investors who did not wish to impact the markets with their large orders and obtain worse prices for their trades.

How I use DarkPool with @Tradytics :

Levels. Levels. Levels. I use DarkPool as areas of support/resistance. Ideally I like to find stocks over (calls) or under(puts) large prints. These prints will help keep the stock moving the direction you want. These levels CAN break. See 👇🏼

website puts them on a nice visual graph. This helps get a quick snapshot of the stock price and where that level is with how big it is (in $$). The site gives you sentiment of the print and labels it 🟢 or 🔴

Tradytics DarkPool 2:
You can even scroll down on the site and find more information. It aggregates the prints into a DP levels chart, a graph showing the daily DP amounts and daily sentiment of those prints.

Educational Resource Thread! 📌

Key Takeaways from Fintwit's Best Traders

If you want to be the best, you need to spend time studying the best. This article is about some of my favorite posts from the best in technical analysis and the keys to their success.

@ChartingOptions
@ThetaWarrior
@Trendspider_J

🎲 How to play trigger watchlists 🎲

1. How/When to enter:

This is NOT an exact science, there is no way to avoid fakeouts. These are KEY levels, and for that reason, provide strong moves. However, they can be hard to break due to their significance. You must manage risk.

There are two strategies I follow.
a) Conservative: Wait for a 5 minute candle to close through the trigger level. Ex: if an $AMD put trigger is under 100 and 5 minute candle closes at 10:45AM at 99.85, take the position.

b) Risky: Playing the first sign of follow through. Ex: $AMD closes 5m candle at 10:45AM at 100.15 - No trigger. At 10:47AM, $AMD fails 100 support and closes 10:47 1m candle at 99.80. I would likely take a position off of key support failure.

2. Fakeouts/Stop losses

Taking losses is inevitable in trading. Our job is to minimize them. My rule here is -10% hard stop loss because you can always re-add the position.

Suppose you take a position from Ex a) $AMD immediately reverses and closes 10:50 5m candle at 110.15…

Your position is red, likely down ~10%. Cut the loser and reassess. Your reason for playing was the 100 breakdown, it is now INVALID. As soon as your thesis becomes invalid, cut, take a deep breath, reassess, watch.

🐳 Watchlists + @unusual_whales 🐳

Unusual Whales is an incredible tool that can take anyone's trading to the next level. It presents a ton of data, which can often be hard to synthesize.

This thread will provide a simplistic approach to analyzing and utilizing flow data. 🌊

1. Where To Start

Start with the "Hot Chains & Tickers" page. Not only does this display the tickers with the most option volume, but it also shows the most active chains. Better yet, you can filter by sector and market cap.

Below are some specific filter examples:

2. Analysis

The "Intraday Analyst" page is your best friend here. The first thing I do is scroll down to the "Most Active Chains" table.

I'm looking for short-term exp. OTM contracts with heavy volume that look "unusual."

Examples are included below:

$LCID - Closed Wed. 11/3 ~$36.50. 40c weeklies required a 10% move in 2 days to go ITM. $LCID closed at $41.80 on Friday.

$AMD - Closed Tues. 11/2 ~$127.60. 130c got hit hard. Closed the week over $136.

$NVDA - Closed Thurs. 10/28 ~249.40, 250c 🔨. Closed Friday ~255.70.

Weekly OTM strikes with heavy volume can lead to huge moves. Now what makes these so unusual?

- OTM with little time to exp. = urgency
- Heavy volume on a certain strike can mean volatility in that area = good for options
- Vol. much greater OTM than ATM = big move possibility