The One Chart Pattern That Could Bankrupt You

Written on 17-10-2009 8:09 am by Craig

Finally moved in...and NTRI

Well I finally got settled in to my new house. What a pain in the ass. Trying to move your entire life from one location to another is such a hassle. I'm just glad it is over! And, not but a couple of weeks in our new house and my wife gets laid off from work!

The stock market may be doing great but this economy is still pretty bad, for sure.

I knew I wouldn't have time for swing trading during the move so I looked around for a longer term trend trade. That is when I stumbled upon NTRI.

And this stock has been on fire...

This company, Nutrisystem, sells weight loss products and they came out with news that their product will be sold in Walmart stores. That is when it exploded.

Maybe I should do more trend trading!

Anyway, just wanted to let you all know that I'm still alive and I hope to get back in the groove again with this blog, newsletter, and our trading community.

Talk to you soon...

Written on 25-10-2009 5:40 pm by Craig

The One Chart Pattern That Could Bankrupt You

Stock charts are littered with swing traps.

And, if you don't know what these land mines are then you are likely going to have a long road ahead of you as a swing trader - and possibly blow up your trading account.

Just take a look at this chart:

This stock had 3 swing traps (circled). If you traded this stock, then you likely got stopped out on these pullbacks only to see the stock rally a few days later.

This chart pattern can be very frustrating to short term traders. But, learn to identify this pattern and you can take advantage of other traders. You can get a great entry into a stock right after they have gotten stopped out.

Take a look at this chart of TSRA...

This stock recently developed a swing trap pattern (circled). Imagine if you were trading this stock. It had a nice pullback, and then a long wide range candle. So good so far. But then it tanked, likely stopping you (and other swing traders) out of the trade.

Then it exploded from 26 to 32 - in just a few days. Now, at the hard right edge, it looks like it is in the process of developing yet another swing trap.

This chart pattern could cause some serious damage to your trading account if you are not aware of it. Learn to recognize this pattern when you are running your scans. The one chart pattern that could bankrupt you could also be the one chart pattern that turns you into a profitable swing trader.