Dare I Call it the "Most Perfect Trade Setup"?

2020-11-18 | TG Watkins

Hey Market Pilots,

In trading we never know what the next trade will lead to because we simply don’t know the future. All we can do is take the setups we recognize and follow our rules. Last week I wrote about how the markets were shifting and setting up for perfect trading potential. This week, the Moxie Traders and I were more than pleasantly surprised by a massive move in a crypto related stock known as RIOT.

I am going to detail the trade setup, but this wasn’t done in a vacuum. Bitcoin, as seen through the ticker GBTC, had been doing exceptionally well for the past few weeks. I could see that GBTC was going to be a good trade, so I actually decided to trade related names because my experience was that the other names were more volatile than GBTC itself. My experience proved itself this week, but it sure took a while. My entry on GBTC would have been where price bounced off the Hourly 50 SMA ($12.30) and it currently sits at $20.16 which is about 63% gain in 33 days.

RIOT apparently had some catching up to do and shot up 67% in two days with what seems like more to go.

I was stalking names like MARA and RIOT because I figured they would move in sympathy with GBTC. This had been true in the past, but somehow this time it was different as RIOT stayed flat for about 12 days despite GBTC making a steady march up to new highs everyday. I kept my eye on RIOT, waiting for earnings to pass, and seeing when price would start to catch the support of MA’s along with Moxie telling me strength / energy was building.

On the Daily chart you could see that price had double bottomed on the 50 SMA. Meanwhile, the Daily Moxie Indicator had gone positive and fired a price trigger. The 8 EMA stayed over the 21 EMA which also indicated bullish.

RIOT Daily

Then we have the hourly chart where price got back on top of the 50 SMA with the 8 EMA also over the 21 EMA. Price kept bouncing along the 50 SMA while Moxie started to climb and finally crossed zero, giving us a Moxie Price Trigger.

Fun Fact: The Moxie Price trigger is when Green arrows on price chart when Moxie crosses up through zero, red arrows on chart when Moxie crosses down through zero. These triggers can be scanned for, so you don’t miss them between the Daily and Hourly firings.

RIOT Hourly

Finally, we move down to the 15 minute chart where we also see perfection in the setup: Price bounced along the 50 and 200 SMA, with its explosive move setup by a bounce off the upturned 15 min 50. The other key was that the Moxie Indicators were over zero the entire time, indicating that strength, momentum, and energy were all positive and waiting.

RIOT 15 min

We certainly had a healthy account size on the trade, and of course you always wish you had more on it, but we never know what is around the next corner and we don’t want to get too crazy just in case it doesn’t work. With volume like this, there is clearly support and interest. So now that the cat is out of the bag, we can be more active trading it as time goes on. It’s the excitement of wins like this that keep us coming back to the market, working hard when trading is difficult, waiting for glorious gains like this which can make us independently wealthy.

Over and Out,
Your Profit Pilot

If you are having trouble making money in the market or figuring out how to interpret charts, join me live on Wednesdays at 10:30 CT. I navigate the markets and answer your ticker questions in real-time. You can also find me on Twitter, Instagram, and Facebook. If my trading style resonates with you, I would be thrilled to have you on the journey.

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