One of our new traders in the June class asked me about what I review when I watch my trading video.  The short answer: patterns that offer clean trades where I can be aggressive.   When I review my work and I see patterns that offer these clean trades I brand that opportunity in my head.   Let’s take a look at just the first hour of SVNT and discuss such plays.

Here was the news:

03-Aug-09 01:29 ET – Savient Pharma receives complete response letter from FDA for KRYSTEXXA; FDA can not at this time approve the co’s BLA for KRYSTEXXA (pegloticase) as a treatment for chronic gout in patients refractory (15.59 )

Patterns I like:

1) There was a battle at 10.65 after SVNT gapped down.  It was difficult to tell if there was more to buy or sell at 10.65.  But then SVNT failed at 10.65 and ticked into the mid 50’s.  I like this trade.  I like this trade a lot.  This is a short for me.

2) At 10.10 a seller stepped down and repeated on the offer.  SVNT had gapped down.  It had a steep downmove from 10.65 on the Open.  10.20 sold aggressively on the offer into the downmove.  And now 10.10 was selling lower and more than I had anticipated.  Also there was protection at 13c, 15c, if the 10c offer lifted.   Short Bella (this trade would not have worked).

3. There was a ton of volume done at 10.10.  The most volume was done here on the Open.  The buyer seemed to win at the 10.10 level.  But then 10.20 held the offer firmly.  Finally 10.20 lifted.

GMan proclaimed,”Oh it’s on.  I am long SVNT.”

I love this long.  10 was premarket support.  The 10.10 buyers won.  And now the 10.20 buyers overwhelmed the 10.20 sellers.  The stock had gapped down.  The first move down was steep.  SVNT had potential for significant upside.  Bella long.  And I am not selling until there is a reason to sell.

So when I review my work I search for these clean trades where I can be aggressive.  These trades will work for the intraday trader.  Our win rate is at least 60 percent.  Our risk/reward is better than 1X5.

What patterns work best for you?  When you review your work brand these trades into your trading memory bank.  Feed your brain with these set ups.  The next time they reappear you will trade them even better.

Best of luck with your trading. Don’t forget to follow us on Twitter!