How confusing is this market?

The volatility is enough to make traders doubt themselves every step of the way.

When the market is in a bullish trend, yes, like now, finding setups for the squeeze can intimidate traders and erode trust in their process. Looking back at previous weeks, the market experienced plenty of chop inside of what Simpler’s traders view as a solid structure.

Opportunities still present themselves for multiple-day and weekly squeezes. When Simpler’s traders strategize their next moves, they look to the momentum indicators to verify support. In a bullish trend with a bullish structure, traders look to find a squeeze as it sets up to fire to the upside. A squeeze to the downside can be a good buying opportunity, as well.

Despite the panic selling the last few days, the Nasdaq still looks like it has strength amidst the chop. Even with selloffs in the semiconductors, the tech charts still look good. While the Dow has been flat, this index has provided leadership in the market.

Following the various stocks in tech, financials, housing, and with energy stocks testing new highs, Simpler’s traders aren’t restricted to any one sector. They will work the opportunities across the indices.

Simpler’s traders continue to focus on setup and structure. This is not the time to chase big names with lousy setups just because the mouthpiece on the news says so. Stay focused on setups that work for your game plan, not anyone else’s.

How can you set up a position to trade the squeeze?

The key is to focus on a squeeze in the direction of the trends. Squeezes fire in the prevailing trend when charts and signals indicate momentum in that stock. The other characteristics to focus on will reveal the best opportunities for good trades.

Despite this wild environment, the market is revealing opportunities.

Simpler’s traders follow the charts to improve their win rate and get the best bang for their buck with a solid risk-to-reward ratio. By improving the win rate, traders can also find the sweet spot in their personal risk management. Doesn’t it make sense to  work a 75% win ratio with a 1:1 risk-to-reward ratio and get more “bang for the buck” should that trade work? 

A good trade begins with a good setup. Take into consideration to be open-minded and seek opportunities for setups that get the job done, rather than focusing solely on stocks that have appeal to the masses.

And keep in mind, Simpler’s traders trust the indicators. Indicators don’t have an opinion or a bias. When you combine trend, structure, and momentum with a proven indicator the result can build confidence through the reward that follows.