five-star-trader-header-2023
five-star-newsltter-mobile

Several key trading setups to use

And my current watchlist for you to check out…

When the market’s up at the highs, you may feel like there isn’t much to do.

Now, if you’re a normal, buy the dip, trend follower (like I‘ve been for so long) that’s definitely the case. However, I have different setups for different types of price movement.

Here’s the one that’s working best for me right now (plus, I’ve included an awesome watchlist at the bottom for you to use)…

Right now, my favorite’s been the Short Squeeze — and this setup is perfect in this type of runaway market. 

Here’s a breakdown of a few of my key trading setups:

Squeeze — My favorite breakout setup, which is when I look to identify tickers that’re in consolidation and will likely breakout. My goal is to trade the breakout higher. 

Fibonacci Analysis — My favorite buy the dip setup, where I use technical analysis to identify high probability entry points on a dip. 

Reversion to the Mean — One of my least favorite setups, however a setup nonetheless. Trading this setup means a stock’s already experienced a solid, directional move, and your goal is to trade it as it pulls back and settles back down to the mean. 

Short Squeeze — This is my favorite setup to use when the market’s at new, all-time highs. It sets up when stocks that are highly shorted experience positive movement, causing both longs to pile in and shorts to close out their positions (therefore causes them to buy as well). This extreme buying pressure causes the stock to squeeze higher in a bullish move. 

For those of you in my Mastery program, or in the trading room, I’m sure you’re familiar with some of the trades we’ve made lately in tickers like TSLA, VICI, CGC, and TLRY. Each of these names have been short squeezes, and provided us with excellent momentum moves higher. I’ve traded TSLA over and over, and last Friday I got a perfect $475 pin on my butterfly, buying it for $3.00 and closing it for $13.56! Today, we closed out CGC for 50-100% gains, so far!

If you want to join in on what we’re trading in my Mastery, you can grab a spot here.

The psychology, and the method of trading a short squeeze is unique, and unlike any other type of trade. It’s all about riding the wave until it ends. 

If you want more information about how to trade a short squeeze, check out my free video from this Monday, where I discussed my BYND and TSLA positions: If you want to learn more, watch it here.

What’re some other tickers I’m watching?

Check out my watchlist (this is a list I make every Monday for members in my Mastery program!):

  • CGC
  • TLRY
  • BYND
  • WGO
  • DHR
  • CVNA
  • EPZM
  • AMD
  • JCOM
  • PTON
  • TTD

Up Next...

The Monday Kickoff

Hey Traders! It’s only Tuesday, yet so much has already occurred in the market. Bank news rattled the markets last week and continued rattling them over the weekend. CPI data hit this morning, and it was in line with expectations. I view that as a positive because anything other than an inline reading could have … Read more

Read More

The Relative Strength Winners

The indexes have been sloppy, in addition to being relatively weak. The choppiness has some benefits, though, as this choppiness has meant that squeezes are consolidating everywhere. I can’t say I recall a time in which I have seen so many squeezes across so many different indexes and sectors simultaneously. What does that mean? It … Read more

Read More

How to Short Amazon Using Butterflies

Hey traders! Federal Reserve Chair Jerome Powell is shaking markets again, and it’s time to look for tickers we can short on the way back down. To do this, I like to look for relative weakness stocks in sectors also demonstrating bearish setups. I like to do this via bearish butterflies because it gives me the … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now
all-as-seen-on-logos