Hi Folks,
I just wanted to give everyone a quick update on the Art of Trading Short Term trading portfolio. This portfolio was a new strategy that I introduced to AoT members for the 2022 year.
Our focus has been short term type trades, focused following new trends in the market and taking gains quickly when we have the opportunity to do so. So far, our strategy has been quite successful and has returned +20% so far YTD!!!
This review will give you a good idea of how AoT operates and the way in which I manage the real time alerts given to AoT private community members. Enjoy!
Let’s take this time to review our top 3 trades this year!
I’ll list them here then we will do a review on each trade!
$SQQQ: from Jan 20th into Jan 21st +9.75% Gain!
$PTON [Short]: From Jan 26th into Jan 28th +10.16% Gain!
$SOXS: From Feb 11th into Feb 14th +12.38% Gain!
$SQQQ Trade Review – Long Side Trade
From 1/20/22 into 1/21/22 – Position Closed
We went long $SQQQ on January 20th around 1:50 PM EST. Why did we choose to go long $SQQQ near the end of the day Thursday? We picked this spot because first the market had rolled over into the close each day last week. More importantly the timing was right around the time when you generally see market algorithms light up! 11AM EST and 2PM EST. I figured if selling pressure was going to pile on this would be the time for it to happen that day!
The market proceeded to sell off violently into the close giving us an ideal entry on this trade!
The next morning the market open with a decent gap down so we used this opportunity to book our $SQQQ gains!
Part of the reason I took the gain at the open was because $NYMO and $NAMO charts were starting to signal an oversold condition. These conditions can lead to quick upside bounces so protecting the short-term gain was the #1 goal here!
Here was the tweet showing the game plan going into the open with the reasoning behind it!
We closed $SQQQ for a +9.75% gain. The trade was initiated shortly before 2PM the previous day and closed into 930AM EST the next day!
$PTON Trade Review – Short Side Trade
1/26/22 into 1/28/22 – Position Closed
We took $PTON short on January 26th. This stock recently put in a bearish Power Earnings Gap. This is basically the opposite of a Power Earnings Gap. You look for bearish type setups like bearish flags, pennants, and potential loss of support with names like these! We did just that!
In this case $PTON setup a bearish pennant type formation and we went short when the setup broke to the downside!
As the setup developed further, I was watching close for our next move! Remember with the short-term trading setups you must be quick and nimble! The plan was to cover at least half of the position on January 27th if it broke below the $23 area!
I tweeted a chart to the Art of Trading private feed explaining my next plan of action!
We didn’t quite get into that area of interest that day so we didn’t take any further action with the trade at that time!
Fridays weak open in the market is what we needed to propel $PTON to the downside. This quick flush allowed us to bank a 10%+ gain in short order!
I alerted the feed when $PTON hit $23 and we covered the short position for a very nice short-term gain! It was critical that we planned well in advanced for these quick moves. Downside moves can be quick in nature so it is always best to have a solid “next step” in place when you’re faced with this type of action in the stock!
$SOXS Trade Review – Long Side Trade
From 2/11/22 into 2/14/22 – Position Closed
$SOXS Has been a staple in the Short-Term Trading portfolio for trading weakness to the downside in a leveraged manner. We’ve had a lot of success this year with this trading tool!
$SOXS is an inversed leveraged ETF. This particular trading tool follows the semi conductor space in an inverse manner! Basically, if the semi-conductor market goes DOWN 1% in a day this ETF will go UP 3%. So, although we went “Long”, $SOXS will do what a short position would do but on the long side!
I had mentioned my interested in $SOXS in the morning tweet Friday morning.
$SMH was retesting the bottom side of that big H&S topping pattern and $SOXS was doing the opposite. Making $SOXS a bullish setup and $SMH a bearish one!
Here is a closer look as to what I was seeing in those charts!
$SMH Retesting previous support (Now resistance):
In the above $SMH chart you can see how $SMH formed a head and shoulders topping pattern and then broke down quite quickly. After finding support around $250 $SMH rallied back into the previous support area of $290 and tested this spot, where it failed once again. Previous support turned into resistance and we used this as a signal to get long $SOXS!
$SOXS did the opposite and retested support with a hammer candle reversal. On this chart below you can see how previous resistance has now turned into support. The exact opposite of $SMH
Shortly after discussing this setup, I alerted the trade long!
The stop loss on the trade was placed based on the Low of the Day (LOD) made on Friday. The LOD was around $4.00 we placed the stop loss at $3.95.
I figured if the market reversed to the upside Friday it would probably do so quite quickly so the stop loss was placed with a very short leash.
“The best trades work right away!”
On the very same day we went long the trade we booked half of our profits later in the day for a quick 10%+ gain!!! I booked them around 3PM EST because I figured the close would go one of two ways quite quickly. Either a quick rally higher or an even faster flush lower.
Since we’re concentrating on booking nice gains when we have them, I opted to take half off, book 10% and carry the second half into the next week!
We carried the second half into this week. Monday morning the market sold off into 11AM ALGO hour. We used the strong move down to capture the second half of our $SOXS gain. I alerted the exit second half exit at $4.87.
We captured a 12%+ gain in the matter of two trading days with this name, again! $SOXS will surely be on our radar in the future for more bearish type trades in the semiconductor sector!
I hope you enjoyed our review and it gives you some insight as to what goes on day to day in the Art of Trading Private feed!
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