Day Trading Momentum Moves!

Hi folks,

I just wanted to create a quick step by step "How-To" post on capturing day trading opportunities.

 Each morning I send out a pre market morning tweet to Art of Trading private community members, usually this includes a day trading idea for the day! Art of Trading private members look forward to these pre market morning day trade ideas!

Day trading opportunities can present themselves in many different forms and setups. Our core day trading focus is on Red to Green (R2G) and Avalanche Day Trading setups contained within stocks showing relative strength and strong daily trends. These stocks often share an additional common attribute. They contain a recent Power Earnings Gap move. The strength and momentum behind a power earnings gap can often generate powerful first and second day momentum moves ideal for day trading. These power intraday momentum day trades are what we're going to focus on in this step by step educational guide today!

Our core strategies and alerts are built around swing trading but I do share potential day trading setups like the examples provided below. Many Art of Trading members use the outlined AOT day trading methodology (protocol) to turn these trades into their own. We're going to cover this in this educational step by step guide, below!

Since we focus on these setups frequently, Art of Trading members have many prior examples of what to look for in these setups. They use these prior examples and experience to execute on these setups themselves. Todays example will add to that toolbox so an individual trader such as your self has a step by step guide the next time a similar opportunity presents itself. Let's dive into the power of an intraday momentum day trade!

What helps set up a top quality, A+ momentum day trade setup?

Momentum day trade setups most often come from news catalysts or earnings results. This is why a Power Earnings Gap in itself works well for spotting these setups well before they take place.

Squeezing a momentum day trade out of a Power Earnings Gap setup usually works best on the 1st and 2nd day of the Power Earnings gap. The 1st and 2nd day of a Power Earnings Gap, especially a strong one, naturally sees momentum pour in, making the premise behind the momentum day trade naturally occurring. In short, you're working with the market not against it.

It isn't unusual to see a high made on day 1 that gets taken out with strength on day 2. So your ideal window of opportunity lies within the first 1 - 2 trading days of the new Power Earnings Gap!

Knowing this, $RBLX had made a new Power Earnings Gap on May 1st. Besides the new PEG, $RBLX was on my radar for a momentum continuation play on day 2 of the Power Earnings Gap. Day 2 of a Power Earnings Gap also works well for PEG Red to Green day trades. In this case $RBLX was already gapping up on day 2 so the PEG R2G setup was out of the question but the momentum continuation play was there for the trade!

I tweeted this $RBLX day trade idea to AoT members before the market opened on May 2nd. Complete with an entry, upside target and stop loss.

Lets break it down:

• The Power Earnings Gap the previous day put the setup on the radar

• If the Stock gapped down on May 2nd then a PEG R2G setup was in play

• The Stock gapped slightly higher on May 2nd creating a momentum day trade play

• The Stop Loss was based on the close on May 1st (The previous day). If the stock went green to red then the setup would have been invalidated and the day trade closed.

• The entry fell within the opening range. Ideally below the previous day high ($71.60)

• The Target was roughly a 5% momentum move higher from the open a realistic move also taking into consideration the high the stock made earlier in the year.

Shortly after the momentum trade ignited. Clearing the high of the previous (defined by the blue line on the 5 minute time frame chart below) trading and holding above it.

The trade progressed with strength through the first 1.5 hours of the day. Finding resistance just shy of the $74 area.

Many AoT members take advantage of these ideas each day!

Replies from AoT members on the trade!

Fast moving momentum day trade opportunities require aggressive entry and exit tactics. You want to be aggressive with both the entry and the exit to ensure you're netting gains. All to often I see traders get caught up in excellent day trades not because of poor entries but because of poor exiting strategies. Its easy for greed to edge its way into a strategy like this the trader may think things like "Well its moved 5% in this short period of time it could easily move another 5% higher! I don't want to miss out on that!" Then more often then not the trade is closed at break even or worse a loss when only shortly prior it was well in profitable territory!

For more Power Earnings Gaps trading strategies take a look at these step by step educational guides below! Click the thumbnails for the educational guides!

I share a new day trading idea each morning with AoT members. Keep in mind our core focus are swing trades so the the day trades are self directed. Its part of the reason I make these step by step guides. They're a fantastic tool for new AoT members to familiarize themselves with common strategies that we use and secondly they can be used in the future to build their own trades and trading strategies from!

Cheers and Happy Trading!