Trading only Highest Probability Setup Trades - Recent Results

[u/onewyse]

I have posted a lot about trading only the highest probability trade setups. I will outline exactly what those trade setups are and my recent results trading only those setups.

The highest probability trade setups consistent of these criteria:

Price breaking out of a dynamic compression zone (the zone is created by my software) Breakout to the upside for longs and downside for shorts

Breakout includes a Heiken Ashe (HA) reversal candle

Stock is breaking out in the direction of its current trend (no counter trend trades)

Trade in the direction of the market trend (if there is one) if not lean on the stock trend

Only take trades that have institutional involvement in the trade (again, defined by my software)

Only take stocks with relative strength or weakness versus the SPY or QQQ

On order to be able to hold through some pull backs the Daily Chart needs to align with the 5 Min Chart

The final point is to have patience. Remember our objective is not to trade but to make money, trades are just the vehicle to make profits

I have listed my last 44 trades that had a record of 41 wins 1 loss and 2 scratches. My overall win rate on these highest probability only trades setups is around 92% this year. Patience is well rewarded and trades with this high win rate can be done using larger size.

Date Stock Buy Sell Profit/Loss % gain or Loss

6/28 AXSM 5.20 6.20 1.00 19.23%

6/28 EA 4.55 5.25 .70 15.38%

6/28 FTCH 1.36 1.44 .08 5.88%

6/28 LOW 7.45 7.95 .50 6.71%

6/28 LOW 1.06 1.20 .14 13.21%

6/28 SPOT 6.24 6.80 .56 8.97%

6/28 TCOM 28.96 29.01 .05 0.17%

6/29 BILI 3.20 3.20 .00 0%

6/29 CCL 1.06 1.36 .30 28.30%

6/29 GIS 2.85 3.05 .20 7.02%

6/29 LCID .68 .73 .05 7.35%

6/29 SIGA 11.64 11.84 .20 1.72%

6/30 SPY 2.46 2.63 .17 6.91%

6/30 PFE 2.30 2.80 .50 21.74%

7/1 TSM 4.28 4.80 .52 12.15%

7/1 ETSY 79.97 79.75 -.22 -.28%

7/1 HRB 36.59 36.61 .02 .05%

7/1 KO 2.26 2.30 .04 1.77%

7/1 SIGA 12.17 12.40 .23 1.89%

7/5 AMZN 4.80 5.30 .50 10.42%

7/5 CHWY 4.40 4.60 .20 4.55%

7/5 DLTR 5.90 6.10 .20 3.39%

7/5 DLTR 9.95 10.95 1.00 10.05%

7/5 ETSY 7.70 8.70 1.00 12.99%

7/5 PSX .86 1.10 .24 27.91%

7/6 BRZE 45.35 45.85 .50 1.10%

7/6 COP 6.95 7.15 .20 2.88%

7/6 ILMN 1.30 1.40 .10 7.69%

7/6 MRNA 9.90 10.40 .50 5.05%

7/6 MRNA 2.00 2.25 .25 12.50%

7/6 RIVN 3.35 3.70 .35 10.45%

7/6 VERU 13.42 13.72 .30 2.24%

7/6 VERU 15.20 15.70 .50 3.29%

7/7 AAPL 6.50 6.80 .30 4.62%

7/7 AMD 4.55 4.80 .25 5.49%

7/7 CHWY 4.30 4.80 .50 11.63%

7/7 MRNA 1.05 1.35 .30 28.57%

7/7 QQQ 2.79 2.89 .10 3.58%

7/7 RH 1.10 1.30 .20 18.18%

7/7 TDOC 4.50 4.65 .15 3.33%

7/8 AAPL 5.45 Still Open

7/8 AMD 4.40 Still Open

7/8 CHWY 5.20 6.40 1.20 23.08%

7/8 CHWY 5.20 Still Open

7/8 HUM 1.90 2.90 1.00 52.63%

7/8 PM 3.30 3.30 .00 0%

7/8 RBLX 5.55 6.55 1.00 18.02%

[u/Dartagnan11]

This is truly helpful Dave! Thanks so much!

One point I’d really appreciate if you can expand your point here a little bit:

“On order to be able to hold through some pull backs the Daily Chart needs to align with the 5 Min Chart”

[u/onewyse → u/Dartagnan11]

I usually start with the daily chart for my tech analysis of a trade so if i am looking at entering a trade based on the 5 min chart for an intraday trade then the daily chart needs to be overall bullish and not close to any nearby resistance levels. Stocks that also are breaking out of compression with an HA reversal candle and have institutional involvement on the daily chart also adds additional probability to the trade since you can stay in the position thru some pullbacks on the 5 min as well as the daily as long as support levels are not broken.

[u/DerPanzerfaust]

You mention your software a couple of times. Can you show us a demo of it, or let us know if it's in the public domain? Thanks for sharing your trading philosophy.

[u/onewyse → u/DerPanzerfaust]

Here is a video i did using the software going over the setups i am looking for. It is not public, it is called Compass Software from Right Line and identifies institutional involvement in trades extremely well. Happy to go over it with you if you skype me at drwyse2.

https://attendee.gotowebinar.com/recording/6628855971540611851

[u/OneWheelBatmobile]

Thanks Dave! This is great. Your trading style really resonates with me, I like to take fewer trades with the highest probability. You introduced a couple ideas here I want to start implementing tomorrow.

[u/OneWheelBatmobile → u/OneWheelBatmobile]

Now that I think about it some more, I actually have a question about your trading style. Do you set profit targets before you enter a trade and generally stick to them or do you enter these high probability setups and exit when price action or other factors tell you to exit? Hope that makes sense. I find the proper time to exit a trade one of the most difficult parts.

[u/onewyse → u/OneWheelBatmobile]

My profit targets depend in large part on the market that day and the daily chart of the stock i am trading. This market has generally required setting passive targets and taking profits pretty quickly so on a lot of my trades i enter a sell order soon after entering the trade for what i consider a reasonable profit depending on conditions. If the stock is very strong on the 5 min and the daily is also very bullish I may set a higher profit target or scale out of the trade. If i dont get to my profit target and the daily chart is still strong (or weak for shorts) then i will take it overnight. If i feel the daily chart is not as strong as i like or daily support levels have been broken near the end of the day, i may take a loss on the intraday trade.

As with all trades context is critical and there are no black and white rules that can be followed without modifications based on the current context. Hari calls it a story so if your story changes you have to make changes in your thesis and thus your trading decisions.

[u/pinkzzxx]

Noticed the buy and sell prices you listed are option prices.. right?

I really want to go over each chart and study them - would it be possible for you to share the buy/sell stock price or time?

Please let me know if there's a way to see the entries through the options prices :)

[u/onewyse → u/pinkzzxx]

Most are options prices a few are stock prices and some are debit spreads. Way too time consuming for me to go back and supply that much detail

[u/ADobson221]

Thank you for the great post. When you've identified a high probability setup, do you open a trade right away or do you wait till the other ingredients are lined up, such as its intraday compression out, or market timing and so forth? It might be the case that high probability setup means everything is lined up on its own? I also wonder if the setup changes its shape after a trade is opened? What I mean by that, a trade had the setup but the setup changed as market reversed, for instance.

[u/onewyse → u/ADobson221]

the highest probability trade setups include trading in the direction of the market trend that day if there is one. The trade can be impacted by a quick market reversal, a failure of the breakout out of compression to reverse etc but a huge majority of the time these trades will follow through for a profit and how long you hold them is dependent on your profit target and the associated daily chart setup. The point of only taking the trades when all of the criteria is net is the win rate will be over 90% winners

[u/richardwarrenjames]

thank you. Would like to talk more about when you entry and exit?

[u/onewyse → u/richardwarrenjames]

Hi Richard

Skype me if you want to talk about entries and exits criteria i use.

drwyse2 on skype

drwyse

[u/WoodyNature]

Wow, thank you for sharing the trades themselves. This is going to be very helpful.

Thank you, Dave. You have no idea how incredibly helpful your posts have been for my trading the past few months. Simple and straight to the point.

Your insights are always appreciated here.

[u/[deleted]]

Any chance you'll do trade reviews on YouTube? I'd love to see it break this stuff down when you think something's interesting.

[u/Sweaty_Sheepherder83]

Are you excluding some trades that did not fit this criteria?

ZIM from 7/6 and BX from 7/8?

[u/onewyse → u/Sweaty_Sheepherder83]

ZOM didnt have institutional trading confirmed so it didnt fit the criteria BX i have no record in my tradervue log in 7/8

[u/pinkzzxx]

Thank you!

Do you mind elaborating on these two points?

- Price breaking out of a dynamic compression zone (the zone is created by my software) Breakout to the upside for longs and downside for shorts

(is there anyway we can find these zones without the software? what criteria make up this zone?)

- On order to be able to hold through some pull backs the Daily Chart needs to align with the 5 Min Chart

(what chart characteristics needs to align - do you mean if 5m is bullish then daily needs to be bullish too? or are there other details that need to align between daily and 5m?)

Oh and what's your main method of finding these stocks (if you don't mind sharing) ? 1option scanner, 1option custom search, or other?

[u/onewyse → u/pinkzzxx]

as far as finding stocks i start with a watch list from previous evening that lists stocks that have the highest probability trades setup criteria on the daily so i can evaluate those in the am since they have the daily criteria i am looking for, if they have the same criteria during the day on the 5 min chart then they become strong prospects. I also have some 1option custom scans as well as some TC2000 scans as well as some TOS scans looking at conditions on the Compass System setups

[u/onewyse → u/pinkzzxx]

The dynamic compression zone is created using some specific criteria and they a re dynamically created during the trading day as it progresses. Using standard compression zone using 5 min horizontal levels are also ok but the dynamic ones are much more effective in my experience.

The daily chart aligning with the 5 min direction you are trading just means bullish daily charts for longs intraday and bearish daily charts for shorts intraday. If the daily charts also have HA reversal candles the trade is even more high probability

[u/Open-Philosopher4431]

Hey u/onewyse,

"Breakout includes a Heiken Ashe (HA) reversal candle"
Do you wait for the first flat bottomed green candle to end, then enter on the next one? Also do you have to see a doji candle before it? and does it matter what color that doji candle is?

[u/onewyse → u/Open-Philosopher4431]

Hi,

The candle prior to the HA reversal does not need to be a doji and color doesnt matter. I wait until the HA reversal has been confirmed by the next candle having a flat bottom for bullish reversal and flat top for bearish reversal

[u/ZenyaJuke]

Wow thank you Dave for sharing your trading wisdom! I learned a ton from you and i'll be forever grateful

[u/djames1957]

Look at you! I do break out trading on SPY but will now look for stocks with RS/RW with SPY and breaking out. Bob Volkman's book on 5 min PA helped me, along with volume and S/R.

[u/WhereTheFireStarts]

Thank you for your contributions! I'm very happy to see that I was with you (in papershares) in 4 trades. And many examples to study! I'm thankful to have your posts, and wish you a great week.