[Martin Miseta]

NVDA long trade
01. 02. 2023

Higher time frame context (4H): The market has broken above a longer-term resistance from August (upper yellow rectangle in 1st pic) and now this has the potential to provide support with price coming back down to retest it.

2nd pic: An Accumulation stage has developed on the upside of said resistance zone. Also this is part of a larger uptrend showing “orderly placed” higher lows on the trendline. This adds to my “conviction” as well.

3rd pic: Recent highs also coincide with the bottom of the Accumulation stage.

The above factors are for context only. What I based the trade on is the Accumulation stage itself (15M chart). A clear and high-volume breakout must happen on the upside of the Accumulation price pattern, shortly after NY session starts (main rules for entry).

4th pic: Close-up of the Accumulation price pattern. “Classic” symmetric shape with a spring on the downside. White horizontal line = Upper boundary that price has to break.

In this case the most favourable scenario was realized. The stock gapped up moderately after open and price clearly closed above the upper boundary (1st 15M candle) on high volume. I entered long at this point.

Trade management: Moved the SL to the entry level, after price has increased about 1.0 R/R from entry (5th pic). I did not expect a large price increase, so I was prepared to get out relatively fast. I closed the trade after price has broken below the VWAP (6th pic) in about one hour from entry. This gave me a 1.3 R/R profit.

Feelings: Fear from losses after entry, then relief after moving the SL to break-even became possible. 😅

Improvement: There is a lot to improve, for example my backtesting showed me that much smaller stops could be used on positions like this one, but I still took 100% of the entry candle (standard for me).

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