In our last update, I showed you how by including my Darvas 2.0 indicator along with the Sector Slow Stochastic, we are stepping up the capabilities of TOPS. Adding another layer to our analysis.
The best way to get a clearer understanding of how these tools work is to see them actually at work. Today I will show you how this played out in a recent NASDAQ trade.
Our 34 EMA Wave and GRaB Candles showed us that things were choppy. When in choppy conditions, Darvas is especially important. It shows us where the support and resistance are. The Sector Slow Stochastic stepped in as another layer in our analysis, showing we were in the lower range, which is also oversold support. This is a great way to identify a floor or demand.
This trade could have been taken with the micro NASDAQ or calls in the QQQ. What you need to be looking at stays the same depending on what you are trading.
In this case, I elected to use full-size futures contracts that resulted in making $7,000 per contract in a trade I essentially held for one day. Got in on Wednesday and started scaling out, AKA taking profits, on Thursday.
How can you do things like this in your trading? Let me walk you through each layer of the TOPS tools that we have covered so far.
