Download - Asc Triangle
Ascending Triangle
Strategies
Long Stock
Covered Calls
Long Calls
Short Puts
Bull Call Spreads
Bull Put Spreads
Diagonal Call
Calendar Spread
Trade Setup Always Criteria Top Down Approach: Market is STRONG and/or Stock
is in a STRONG area (sector/industry group) of the
market Uptrend: Stock has recently made a new swing high Price Relative indicator is positive From new swing high, stock trades sideways
(consolidates) in a narrow range with relatively equal
highs and ascending lows (pinching together from
below). This consolidation should bring the price back
into one of the following:
Lower Trendline
20 Day SMA
50 Day SMA
Prior Support/Resistance Level Consolidation lasts a minimum of 5 days (and often
much more) Minimum 300,000 shares of average daily volume Volume often tapers during consolidation- watch for low
volume as a clue to when stock is nearing a break out Reward to Risk ratio: minimum 2:1
No earnings date in the next 10 trading days (DO NOT
hold through earnings!) or pending news in near-term
Trade Trigger: Stock Breaks High of
Consolidation (or a
recent group of
relatively equal highs)
Entry Order: Buy Stop Limit- for
Controlled Entry
GTC Order (usually)
Stop: Trigger Price
(from above)
Limit: 10-20 cents
above stop
Initial Stop Loss
Order: Sell Stop (Mkt) below
last mini-swing low or
1 ATR below entry
GTC
Reward/Risk Exercise
Target
Entry
Stop
Reward
Risk
R/R Ratio