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How To Use HIT & RUN Trading Strategies in a Bear Market: $SOXS Trade Review!


Hi Folks,


I just wanted to give everyone a quick update on a recent Art of Trading short term trade where we traded $SOXS for +11.60% overnight!


Last week I shared a post titled "Short with Confidence". In that blog post I shared ways that you can go about shorting in a bearish market. Many of those same principles were applied to our recent $SOXS trade that we opened in the afternoon of Oct 6th 2022 and closed the morning of Oct 7th 2022 for a very quick +11.60%~ gain!


So, what was I looking at and how did we trade it?

I mentioned in my previous and recent blog posts that shorting in a bearish market is usually best executed when the market sees a bounce or a bit of strength, the reason being is because you naturally reduce your risk shorting at a higher price and with that comes a stronger entry with greater potential downside.


This week I had my eyes on the $SMH chart. Basically $SMH found a recent low and reversed into the 20D EMA. The 20D EMA has been a spot of thick resistance for $SMH this year so I figured if I wanted the best risk vs reward on a semiconductor short sided trade this was the spot to get short. $SOXS is my semiconductor inverse ETF of choice for "shorting" semiconductor stocks!


This is important point to note: $SOXS is an inverse leveraged ETF. If the market goes down this ETF goes up! You go LONG this ETF for bearish reversals!


Here was the $SMH chart I tweeted to AoT members:

Shortly after this tweet we went LONG $SOXS for a bearish $SMH short trade!


By the end of the day the stock closed out strong nearly 1.5% higher than our entry at $53.62.


$AMD warned Afterhours sending $SOXS up an additional 5% after hours. I tweeted AoT members this:

The very next morning $SOXS was up nearly 10%. I emailed AoT members explaining my intentions with the trade before the market opened for regular trading.


Here was that email:


Then, shortly after the market opened I booked the gain. Here was the official alert:

Using the methods explained in my previous blog posts AoT members enjoyed a quick "Hit and Run" style trade in a bearish market that booked us +11.60% in a short time frame!


How has AoT performed in 2022 so far? +37%~ YTD!


Here is our updated trade tracking spreadsheet!


I hope you found this review helpful!


Cheers and Happy Trading!

Art of Trading


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