welcome back to the bar by bar Series today I'm excited to break down two of my biggest trades of the month first we have a higher time frame breakdown in Nvidia and then just a day later I flipped long and caught a mean reversion long as Nvidia got overe extended stick around because I'll dive deep into my exact thought process share my morning game plans and reveal how incorporating options into these day trades allowed me to hold for the bigger moves while keeping fomo at Bay freeing me up to trade my stock positions much more
effectively let's get right into it all right so first trade we're going to dive into is this higher time frame breakdown on Nvidia from uh the 24th um first let's take a look at my morning game plan just to get an overview of my thoughts from that morning and then we'll do some technical analysis so here's a a quick look at my morning game plan uh you can see morning plans quarter 3 24 um and this is what they look like I know a lot of people always ask um how do you create a morning
game plan what do your morning game plans look like so in addition to this information I have here uh I just want to throw it out there that I always have an understanding of the intraday fundamentals right so what's the ATR what's the average volume what's the short interest institutional ownership all that good stuff uh I also always know what my key levels are so if they're not all listed here they're definitely marked off on the chart uh typically it's a prior day high prior day low the prior day close the pre-market High pre-market low
and higher time frame support and resistance levels jumping into the morning of the 24th um what was interesting to me um and you can see that I wrote here want to keep a close eye on the semiconductor space today Google did not increase capex for the year which isn't a good look for semies last quarter when all the big cap tech companies were increasing cap acts so we had like Microsoft Google meta um Tesla Apple they were all increasing capex specifically to get as many AI chips as possible to train their models and that helped
Drive semis higher and now it just seems like for the first time there's a huge clue here that the aggressive purchasing strategy is slowing down it's the first time all year Google has not increased cap backs so we might get the opposite effect like these helped um continue the run in semis last quarter and now I'm thinking all right this may lead to weakness in the semispace and the morning of the trade um there was a pretty big gap down in Nvidia jumping into the plan for NVIDIA um I write here just a quick overview
the higher time frame so Nvidia broke the top of the 3-day range filled the Gap from the 17th failed from the 10 and 20 simple moving average and now it's gapping down almost 2% back inside that range not a great look technically and I think this could lead to a test of that huge 117 support level which is also the 50-day so we have a higher time frame support level with Confluence and we'll show you that in a second uh if it can't bounce in the morning or tries to bounce off the open and fails
uh and SMH is weak I would look to buy puts also a stock position for a test of that 117 level um I could see it testing today and then breaking tomorrow we also have this pre-market range to work with so we may possibly get a pop and fail into 121 um and I won't Chase weakness off the open we're getting at 2% Gap uh and one of the strongest stocks I don't want to chase weakness I want to wait for the stock to show me that it it can't bounce in the morning right if
it tries to pop off the open it can't bounce or the opening range is set and then it's holding below vwap then I'll look to get short on pops let's take a look at that higher time frame setup so we can see this 117 support and I would consider this really like a 9 out of 10 um technically the reason why I'll give it a 9 out of 10 is cuz in my eyes something that's a 10 is like a multi multi-month resistance um that's failed for maybe a year or more this is really like
a TW Monon support level strong support but you know not a support that has gone on for like 3 four five 6 months you could see that over the last few days Nvidia formed this really clean range about 122 by this 117 Nvidia bounced from this 117 a couple times broke the top of this range and then filled this Gap you can see this Gap uh from the 16th and the 17th and Nvidia broke above that 3-day range and filled that Gap ultimately failing from the 21 EMA and the 10 SMA now what's interesting about
this is 2-day Bounce was that that SMH was leading the way it was one of the strongest sectors in the market during this two-day bounce so Market got a little oversold Nvidia got a little oversold into this higher time frame support uh we broke that 3-day range it seemed like the market was going to bounce seemed like Nvidia was going to bounce like I said semiconductors were the strongest that's a pretty weak bounce and in the morning we have that Google News we have a 2% gap down and in my opinion what could really help
this trade is if we just think about the psychology here these Longs that were buying because they thought the market was going to have a multi-day balance they saw that SMH was the strongest sector during the bounce they're probably getting pretty nervous as we fill the Gap and there's a 2% down move in the morning and we're back inside this range so in my eyes there are buyers from the last two days that are probably bagged in the pre-market you can see this range here from about 120 to around 121 um I was hoping for
like a false breakout above that 121 level and then a hard move down we didn't quite get that um and again I just didn't want to chase any weakness off the open given the 2% gap down in the morning we have a first move up followed by a pretty steep drop and then from there we bounce now what's interesting to me at this point you know we're roughly a half hour into the trading day what I notice is that the cues are extremely weak and holding lower gap down in the q's first move is down
Q's break below that pre-market low and they're just holding lower and you can see how well this 90 ma acts and in addition to that SMH semiconductor sector is towards the bottom of my ETF ranker so I have a um Market filter that just has about 30 different Market sectors um and it's filtered by percent change from the open and I remember that SMH was at the bottom of that ETF list and that helps give me some conviction in this trade so we have the Tail wins from the overall Market at our back so we
get our first bounce to 119 Nvidia can't break above 119 and what I decide to do is buy 117 puts for the following week and I'm going to treat that as my trade to hold for the higher time frame breakdown and the reason why by the following week's puts is to get away from um that time Decay I don't want to have to worry about time Decay during this trade if it doesn't work out right away right there's a pretty big gap in Nvidia um it's very possible that it could just chop around hold 117
and then break the next day time Decay is not something that I want to worry about for this trade so let me just buy the following week's puts and that will sort of just take the pressure off having to watch that options position uh if Nvidia breaks back above high of day then that means to me that it's just not as weak as I thought it would be and I would just get rid of those puts so following this move uh we have a really clean failure from vwap putting in a lower high and that's
where I take my short uh using Equity of course right on this failure and my stop for half of that position is that recent high and on the other half I'm willing to risk to high of De often times in trading it's going to take you a couple shots to get your idea right truth be told most of the time it's going to take more than one attempt which is why I have in place the three strikes rule I'm willing to give an idea three attempts and if I don't get it right on the third
attempt I'm out of that stock for the day and I need to move on because clearly I'm not seeing it right that's the three strikes rule keeps me out of a lot of trouble I end up getting Stu out on half of that position and that's okay as Nvidia fails here now I like to keep things simple we could just draw this simple trend line from the lows and as soon as it fails I just get back into that position following that move Nvidia begins to hold below vwap our 9 and 21 EMA and there's
just a large offer at this 11880 it cannot lift that price it cannot get back above vwap um and I'm starting to feel pretty good about this trade something that did sort of make me feel a little bit uneasy was the fact that QQQ was relatively weak compared to Nvidia right Nvidia is nowhere near low of day um and if we look around 10:00 a.m. Q's are just holding below that 9 EMA grinding lower making new lows and Nvidia is not anywhere near low of day um but it's acting well so I'm going to stick
with that trade right there's no reason for me to cover this short uh I know where my stop is at this point the high of this candle is 11943 um I'll just put my stop at 11951 again just keeping it simple here drawing this trend line Nvidia can't break above that 11880 and then I notice some selling pressure come in here at this point the cues are also starting to break and put in a new low and I feel pretty confident that if this trade is going to work it's going to have to work right
now and this is an ad for me the stop for this at this point the stop for the entire trade is just above 119 it should begin to work Nvidia breaks the low this consolidation we see some selling pressure come in and I'm adding my final piece to this position and again my stop for this entire position is just above this consolidation at 119 so then we have this nice consolidation at low of day so we could look at this 11750 area we bounced from there and now we're back at that 11750 and we're holding
there we consolidate for about 40 minutes or so down here and cannot bounce we're also holding below that 9 and 21 EMA um we do try to bounce and break back above that 9 and 21 EMA but that results in a failure and then we break lows on volume that's my final ad on the equity position just a momentum cash flow trade here and as we trade down to 117 there is a large held bid there with a few million shares on the bid side and look it's nice when we get a low of day
break and it results in a quick move like we see a few minutes later but often times um what will end up happening is you'll get a break and a retest uh of course it would be nice if we get the low of day break and immediately wishes down like this but the next best thing that could happen is a break of that level and a retest as we retest and then break down we have this really clean momentum and you can see the volume being done there for instance if we look at this bar
threshold this is showing me a four standard deviation 2minute volume bar based on the last 10 days of 2-minute volume bars so we're doing extremely high volume here and we're also at this point about an ATR from high of day uh and once I see this volume coming in we start to bounce I'm covering that Equity position so when that huge volume comes in I'm covering my Equity position really strong momentum there and then you see this huge volume come in we're about an ATR from high of day um pretty fast move down I have
no fomo that I'm going to miss some crazy move lower because I have the puts I'm free to trade the stock and catch a leg of the move um without thinking I need to hold this because the Stock's going to move lower it allows me to freely trade that Equity position so the next trade that I took here was a little later in the afternoon um so Nvidia puts in a series of higher lows and then retests this 117 level tries to put in a higher high fails 117 what's interesting to me is at the
same time the q's sort of put it in this double bottom and they break back above the 9 and 21 EMA for the first time all day that signals to me a shift in momentum and the market should bounce here the market should bounce so holding back above those EMAs for the first time all morning and then fails but we put in a little bit of a higher low here we attempt to bounce again now we have a lower high and we fail back below that 9 and 21 EMA and that coincides with a failure
from this 117 and this trend break in here so as I noticed the q's can bounce um I begin to take a short right in here around 11 1670s just some simple technical analysis we trade back into this 11580 area holding holding holding holding um and I'm just going to cover that Equity position now as we get this break through low of day we see this volume start to come in this is over a four standard deviation volume move based on the last 10 days worth of 2-minute data that is huge volume at that point
I begin to sell that put position which is up roughly 7 5% we fell from the 21 EMA put in a new low around 114 um at this point we're down roughly two atrs another large volume bar comes in and I am selling the remainder of that put position I just want to share a couple things that I think I could have done to really improve this trade um I think it's important that even after you have a great trade you go back and you think to yourself how could I have made more on this
trade what could I have done better um and the one big thing that sticks out to me is adding to my short after that break and retest in low of Daybreak that is an excellent momentum trade with a very tight risk reward you could just risk a couple cents above the high of this bar we're breaking that 117 there was a massive held bid there at 117 we know that 117 is the 50-day simple moving average and that N9 out of 10 higher time frame support so the biggest thing that I could have done here
was put on a momentum trade Trail by two minute bars prior two minute bar highs or even grab weekly puts for this momentum trade lower um and that is the one big Improvement that I can make on this trade all right so now we're going to jump into the mean reversion long from the very next day following day we get a gap down in Nvidia um and it continues to follow through to the downside so we get a first move down we get a pop into vwap we get an opening range break to the downside
so at this point I'm hoping that in viia can flush out and give us some mean reversion long opportunity as we're trading down towards around 108 nvidia's roughly down 15% over the last 3 days it's down about 4 atrs in 3 days um and the risk reward to the short side at this point just doesn't make much sense uh I am looking for a long opportunity so like I said earlier sometimes a trade idea will take more than one chance they're going to have to give it a couple chances to get it right um and
same thing with this opportunity this volume bar was very interesting to me so the threshold into a four standard deviation 2minute volume bar based on the last 10 days is 52 million shares we're seeing an 8 million share 2minute volume bar it's extremely rare to see a volume bar like that um and of course we have the highest volume bar of the day at 958 a.m. and we trade below 109 and reclaim and as we reclaim I'm going long I'm noticing that huge mass of volume starting to come in uh and we can't push up
we break back below 109 and put in a new low and I'm getting stopped Out Below this low so that was my first attempt following this we push lower into 10630 now something a little bit different happens here right we start to hold for 6 minutes in addition we have not gotten a break of a prior 2-minute bar High um aside for the stuff move here that failed extremely fast we tra back into 10630 and we're holding we're holding every time the stock gets below like 10650 it immediately rebids 10650 and then finally we get
a strong push off and something that I just want to note is these volume bars this is a new tool that I added to my studies and it's just showing me the volume done on the bid versus the s so volume done on the bid will show red volume done on the ask will print green um and this just tells me that there's a large bidder here willing to take all that size down at 10630 now it's not day Traders sitting down there in addition to that if we look at the daily um we have
a little bit of a gap fill here right a little bit of a support right down here where there's a large buyer willing to step in how do I enter this trade as soon as we break above that prior 2minute bar High um we can no longer test that 10650 we push up and break I'm getting long my stop is just a few cents below the low so 10630 I'm putting in my stop at 10629 in addition to that I'm buying the weekly 111 calls why did I choose those well Nvidia is down slightly over
four atrs in 3 days it's down a little bit over 15% in 3 days um I think that we should get at least a 1 ATR bounce which puts us at 111 so I buy the weekly 111 calls and what really gives me confidence is this Wick down here Nvidia pushes back down to that 10650 area and immediately gets bought up very aggressively and you can see now we have much more volume done on the ask then the bid side which tells me that buyers they want to get in taking Market orders at the ask
get me in this immediately we had a quick Flash down and an extremely fast rebid and this gives me a lot of confidence about this trade great opportunity to add here a rule that I have um is on the equity position on a mean reversion trade like this I always want to take some sales into vwap so as we push into vwap I take some sales and I have no fomo at all that I'm going to miss this huge move because I'm using the call position as my trade to hold we trade into the opening
range low start to slow down and I'm selling a little bit more stock we trade back into high of day and I'm out of my stock position something that I also just want to note quickly is how well Nvidia held below that 9 EMA after the opening range break to the downside it wasn't till that reclaim that the bounce started and interestingly enough we get a cross of the 9 and 21 EMA for the first time all morning which signals a shift in momentum the 90 ma holds and we push up as we trade into
high of day I'm also starting to sell the calls I sell 50% of the calls into high of day and now I'm going to wait for a bigger reason to sell um simply we could just draw this trend line from the lows Nvidia pushes into 115 fails pushes into 115 again fails and we start to break below that 9 EMA in addition if we just look at the daily we also ended up filling that Gap here um from the pre-market trades into the prior days close and then starts to fail uh and just a quick
bonus scalp that I'll talk about about to the short side so we have this clear level around 11550 that I have highlighted uh set up a nice range broke above tried to hold we failed that retest of that high as this trend breaks I just take a small short risking that recent High um risking probably roughly 5% of what I made on the bounce just a small scalp opportunity using simple resistance and as we put in this lower high and trade lower into the opening Range High and support I'm covering that trade um just for
a quick scalp all right thanks for tuning in and I hope you learned something today so you're an active Trader not doing as well as you want not doing as well as you deserve and you just can't figure out why you can't be profitable no matter how hard you try well let me show you why this is your competition the traders in this room this room right here is full of elite Traders some of whom are making seven and even eight figures a year in fact our top guys have made nearly 20 million each in
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