The Best of: Carolyn Borden

2017-05-30 | Danielle Shay

Show Me the Money

Trading is all about learning to recognize the patterns that work. Like Warren Buffet has famously said, “The stock market is a device for transferring money from the impatient to the patient.” Sitting on your hands, and waiting until specific moments in time appear, are what this game is all about. I asked Carolyn to tell me about her absolute favorite setup – and here it is, her Royal Setup. Read below to learn about this setup, and hope to jump on the ride the next time it comes along.

The Royal Setup

The ROYAL buy setup is a method of narrowing down powerful trend moves on a strong security. If you want powerful moves, sticking with following the trend (versus selecting countertrend trades) is the safest bet. How do we know? We look for a ROYAL setup on a daily chart. A Royal Setup is defined as having a Fibonacci Setup (symmetry setup, two-step pattern setup, or price cluster setup) on the buy side, and price is above the 50 and 200 simple moving averages. When price is above the moving averages, it tells us that the stock is a strong bullish setup, making it a stronger setup when you jump on the trend in that direction. In addition, the 5 and 13 exponential moving averages are in ‘buy mode’ – meaning that the 5 ema is above the 13 ema on a daily chart. If the setup also includes a symmetrical pullback, it’s even more ideal.

AAPL Royal Buy Setup

On this Apple (AAPL) daily chart, you can see that price is clearly in a strong bullish trend, creating an undeniable pattern of higher highs and higher lows. Price is above all four moving averages, and they are stacked in order, and the 5 ema is above the 13 ema, and price is above the 50 sma and the 200 sma). When price pulls back into our Fibonacci cluster zone at $149.00-76, we have a strong, Royal Setup that hits, holds, triggers and goes right up to meet $156.65 (not pictured on this chart), which is $2 from the 1272 extension target.

Amazon Royal Buy Setup

Amazon (AMZN) is another very clearly bullish stock. The Royal Setup gives you a well-defined entry point to jump onto the trend. On the chart below, AMZN pulled right back into symmetry support, combined with price being above 50 and 200 moving averages, and the 5 is above the 13 in a buy mode. Once price hit and held at Carolyn’s $940 level, price continued climbing up to AMZN’s new high of $998.65, and you wouldn’t of had to sit through any pullbacks!

GOOGL Royal Buy Setup 

In this GOOGL example, we have price clearly above 50, and 200 moving averages, and the 5 is above the 13 in a buy mode, giving us a defined bullish trend. Carolyn has identified a Fibonacci cluster zone at $937.93-91, and price pulled right back into the zone, hit and held. The Royal setup did it again, and price climbed up to $996.39 – for a $58 price jump.

Carolyn distributes her chart setups on her site at Fibonacci Queen , and she also appears daily in the Simpler Options trading room. If you would like to test out a membership for $7, just click here. If you’re already a member and you’d like help applying these setups, email [email protected].