Primer: How To Find Fat Pitch Trade Setups

Patience Pays

The Apple trade to start off Q3 was one of the best ones of the year, over 400% return in 3 trading days.

The Apple trade to start off Q3 was one of the best ones of the year, over 400% return in 3 trading days.

How did I find it before the move? I'm going to share a repeatable strategy I use to find these type of setups.

Buffet has talked many times about how the market is a game of patience where you only have to swing when you want to. A keep piece of this is impulse control, there is no reason to chase trades on a daily basis but instead of embrace JOMO (Joy on Missing Out) and reject FOMO (Fear on Missing Out). Fear is not our friend, I prefer joy myself

Most of my best trades come when I see some type of headline or reading hit where a stock is rapidly falling based off of some event or random news of the day. What I like to do when I see this is review the technicals first. What is the 4 hour, daily and weekly RSI reading, is it above or below key weekly or daily moving averages, and has it filled or near any gaps?

Next, I review the seasonality over the next few weeks and months for the current year overall and the current year of the presidential cycle (Midterm Year this year as an example).

Follow that up and review any large prints that might have hit in VolumeLeaders.com recently to see if any levels stand out. You can see the 2nd largest print came in on 6/26, adding to the thesis that this could be a good trade here.

Lastly, review any catalyst upcoming.

After reviewing that it should paint a very clear picture on if this is a compelling setup or not. Apple checked many boxes, RSI extended to downside, near key support, large print in the tape, a gap fill just below, and incredibly strong seasonality.

The trade shared on 6/29 with premium members was APPL 7/24 295C’s at 2.95

Those calls ended Thursday 7/2 at 17.30 a contract, nearly a 500% gain in 3 days.

This is a repeatable trade setup that anyone can use. It just takes a bit of patience and a process that works for your own trading style.

Hope you enjoyed. Cheers 🍻