BROS Trade on Oct 19, 2021 10:47 from AtlasVanguardPaperTrading: Tradervue User Stock Trades.

Playbook: BROS 10-19-21

Name: Clearing Range Bull Flag Breakout

Big Picture:
What does the related and broader market look like?
Going into Tuesday the IWM gapped up huge and touched the top trendline of the flag that has formed on the 4h time frame and slammed back down to the bottom of the trendline where buyers stepped in.

What were important levels intraday in the IWM?
Around 227 I anticipated a pulled back or a launch because it is forming a pattern and that is where the top of the trendline was on the daily time frame. Support at AH low from monday which was 224.50.

What is /ZB doing? Chart below:
The 30 year US TBOND futures were in the demand zone creeping back up to 160 which is the top of the demand zone where if interest rates were ready to fall back down the /ZB would find buyers and push out and above 160.

Where there any important events on the macro level?
Earnings season is approaching! First round of earnings was sending traders to bidding up index weighted stocks and sectors that had a good earnings report.

SPY/QQQ/Bonds market chart here:

Intraday Fundamentals:
Premarket Volume (for plays off the open)?
Largest PM volume bar was 5k.

What is the ATR?
6.35
How does the option market look?
Only monthly options with the first month having +/- 92% IV. Decent volume and OI above 1k on ATM options.

What makes the stock in play?
Post IPO volatility and a large social media interest.

TA:
What levels were significant in the trade?
VWAP at 59.50
Previous ATH at 61.95

Did you trade based off a candlestick pattern?
Yes I made this trade based off a bull flag that formed at the lip of previous day high and then price came down and held VWAP with volume. That signaled me to start adding a long position with a stop below VWAP.

What levels/TA did you used to plan your entry? Why?
I basically used the bullflag pattern combined with a hold and bounce off VWAP with volume after price flushed the VWAP and bounced off the 61.95 which was a level from a swing high yesterday. I was looking for price to give me an inclination that it was ready to step above the upper trendline of the pattern with enough volume to push a continuation. As far as levels for managing risk I wanted to be completely out before price flushed VWAP again if it needed to do that.

What was price action telling you?
Price was telling me that this test of the upper trendline would be different because volume just started POURING in near and eventually over values that we saw off the open! The uptick in volume as it pushed off VWAP was the biggest indicator.

How and where did TA give you the biggest edge?
TA gave me an edge in finding the pattern and then holding an important level like VWAP gave further confirmation. The volume uptick was enough to start scaling in with the price holding VWAP and the proximity to the upper trendline offered a great risk reward trade.

Where did your TA fail you?
TA did not really fail me at all on this set up!

Detailed TA Chart with any further explanation:

Reading the tape:
What did you see on the tape to initiate your entry?
I saw bids hold the VWAP level without a single fail and rebid. Just a hold at VWAP and retest of the 9EMA which crossed over VWAP.

What did you see on the tape to take profits early if you did?
Price held and consolidated above the previous ATH and then continued higher but on the tap I interpreted this as a premium killer consolidation so i decided to just go ahead and scale out on upticks. Next time I will be sure to use a trailing stoploss because those have been working really well for me.

What made you add size?
I never added size to this trade I just put on a full position and tried to sell it inot momentum and leave on the run.

Why did you sell?
Because I got a nice uptick and decided to hand over my contract for the pump in premium. I really should have looked to scale back in to the 61.95 level that was previous ATH. Bids were holding that level.

Intuition/Trade review:

What intuitive lessons can you take from this trade?
These patterns that form near the open can be very profitable Trades2Hold and especially when there is a VWAP related set up along with it.

How did this trade help you grow?
This trade helped me get better a knowing when it can pay to continue trading a ticker after you have exited a full position. The strength this ticker presented does not come everyday and it is important to try to capitalize on the whole move safely and with profits not risking new capital.

How are you going to take what you learned and apply it tomorrow?
I am going to show more interest in patterns that form and set up both a bullflag continuation near ATH and also a VWAP bounce/hold set up at the same time. These can be gold mines!

How can you get better entries and exits?
I need to get better at really trusting my levels and making sure I buy the less risky parts of patterns so I can ride it out until it breaks better instead of getting smoked on a pour entry as it breaks out although that would have paid also on this set up.

Where can you be bigger in this trade next time?
If I am building a position here and can add an extra contract with VWAP as a stopout because of the way bids were stepping over the VWAP so aggressively. Also it would have paid to throw some size at the 61.95 level after the initial break out. Adding size here would have probably doubled the profits I realized on this trade all in all.