In my previous articles, I have defined my Grade A (the best tradable) and Grade B (good tradable) patterns. If you haven’t read them, please click here for article Part A and here for Part B. In this article, I am going to define a few stock patterns that we should try to avoid. These patterns look like they have a real good trend and are usually very tempting to novice traders. However, they fail more often than succeed. These patterns are like teasers from the fisherman (often the big …

Today, I have seriously taken a look at my successful and unsuccessful trades over the past couple of weeks and found that stock patterns actually have different degrees of success rate. Certain patterns or setups show a greater success rate than others. Therefore, I have graded these patterns as A and B according to their success rate.
Grade A patterns have the best success rate. I have so far summarized 3 unique patterns as GRADE A Patterns.  Here they are:
1. Early Morning 45 Degree Breakthrough Intra-day Pattern:
This pattern usually forms …

There were not many stocks worth trading in my watch list today. Only a couple in the early morning and a couple in late morning. The early morning stocks that showed good setups were LVS and ROK, and the late morning stocks were RIMM and WRS.
Lets take a look at Las Vegas Sand Co. first:

LVS opened slightly below yesterday’s low/close level. It tried in vain to close the gap, but quickly slipped down to the early morning low price which was $50.85. Usually this is too early for me to …

Today, I encountered three beautiful early morning breakout patterns. They either opened flat or with a small gap up. The stocks were first stopped by yesterday’s high level, but quickly broke out of that level and shot up high. This has become my favorite pattern in the early morning session. It has a very high success rate and usually formed the setup early in the morning (often before 10am). Take a look below:
The first one is BID, which broke out completely on the 4th 5 minutes bar.

The ideal entry point …

Sometimes people ask me at breakout point, should I enter my position right after breakout, or should I wait till the stock further confirms its movement. The dilemma is, if you enter immediately after breakout, you may enter high and the stock failed, so you lose money. But if you wait for further confirmation, the stock since has shot up really high, and will not come down to confirm. Then you missed the perfect chance to enter your position. So what should we do?
Well, I say before we decide whether …

HMSY is another trade I entered today, which I should categorize it as the best tradable pattern. Take a look below:

I like it because it opened flat, and started to consistently moving up, forming a beautiful uptrend pattern until it reached yesterday’s high, which is a resistance level. It corrected at this point, and quickly broke through this level to resume going up. This pattern shows a strong buy signal. Now the question is: where is the potential exit point? Well, the answer is on its previous days’ chart. Let’s …