The Process Behind The Trade!

Hi folks!

We're back with another step-by-step educational blog post featuring a trade that I highlighted and helped step AoT members through last Thursday. Obviously the market has been quite difficult and choppy to navigate over the past few months so focusing on shorter term trades and day trading strategies have kept our skills sharp and in tune with the current market flow.

These types of small hit and run style, dip day trades can add up over time so in my book they're worth the effort to become skilled at!

Today I'm going to step you through one of these very trades to give you an idea of my process behind a trade like this. All the way from initially spotting it, into the entry and exit strategies. Everything that essentially makes up a successful short term trade!

Lets get into it!

We're in the middle of earnings season here so I like to keep an eye on high beta tech earnings that are reporting for the week. Each weekend I make a list of all the big tech earnings making sure to note the date they report and if they report after the close or before the open.

@eWhispers on X is a fantastic resource for this. I quickly glance the breakdown for the week and make my list.

So for example my list for this week looks something like this:

Tech earnings this week

Monday:

Before the open: $TEM, $CIFR, $CHKP, $TSEM

After the close: $AAPL, $PLTR, $ON, $LSCC, $FN, $ROKU

Tuesday:

Before the open: $SHOP, $DOCN, $UPST

After the close: $AMD, $SMCI, $ANET, $ALAB, $XYZ

Wednesday:

Before the open: $DDOG, $CRCL, $RIOT, $HUT

After the close: $ARM, $QCOM, $APP, $COHR, $HUBS, $FIG

Thursday:

Before the open: $CORZ, $MTSI

After the close: $AAOI, $NET, $LITE, $IONQ, $IREN, $AFRM, $TEAM, $SOUN, $DOCS

And so on. This doesn't mean that I'm watching every single earnings release but it at least allows me to have a cleanly laid out plan for a busy earnings week. This week I'll be sure to watch names like $AAPL, $PLTR, $AMD, $ARM, $APP, $AAOI, $NET, $AFRM and $LITE very closely as earnings drop.

I don't complicate the process by looking at things pre projected earnings moves or anything like that. That tends to create a bias. I just take what the market is willing to give.

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Into the Trade: $FTNT

Taking into consideration how volatile the market has been in the past few months my strategy for these earnings reactions is a play off of that. So last week when $FTNT was on my list and it hit my after-hours scans (biggest % droppers on earnings). The fact that it not only beat earnings estimates but also raised guidance yet the stock got harshly punished by a whopping 26% was an opportunity that shouldn't be missed. Thus why I alerted the AOT community at 5pm EST that this is a stock we're going to focusing closely tomorrow morning and to be ready: 

Some experienced AoT members even got an early start on the trade in accordance to their own risk tolerance and trading strategies.

Sticking to the plan outlined the night before $FTNT was on deck for a "Gap down & Bounce" style day trade. Which has been a consistent strategy for AoT in the past few months!

I posted the plan for $FTNT pre market detailing how we're going to plan this $FTNT trade. I keep things as simple and as straightforward as possible. The stock was set to open down around 26% and I was specifically looking for an entry straight out of the open around the $128 price point. I didn't need to be right on that level, close was good enough!

The reason why we wanted to buy it right off the open is because the odds that a stock with as strong fundamentals(which handily beat earnings estimates and raised forward guidance) as $FTNT was going to bounce swiftly after that unwarranted 26% gap down was very high. 

Sticking with the theme of how weak and volatile the overall market has been lately, booking gains quickly or taking partial profits has been a good thing on almost every trade we made recently. This $FTNT was no different. 

The first half was good for a +4.4% move off of the $128 entry. The Trade contuned to work very well and continued to glide higher as the morning went on!

The remaining half position was closed for a whopping +7.8% gains in a trade that lasted literally half an hour! 

As always I look forward to sharing AoT member feedback from the trades we make. We had some fantasic feedback that day and even a request from AoT member to make a detailed post on the trade. Continous learning and development in this business is a must!

Here are the tracked day trade results from the AoT feed so far this year:

These trades are based on single sized positions. If a $10k sized position was taken on each one of these trades the theoretical performance on that sits at $14276 or a 42.76% gain on the fixed sized position. Assuming no compounding.

Ok folks! I hope you found this step by step educational post both helpful and maybe even a little bit exciting. These are the types of trades that my private channel has been focused on for much of this year so this is a nice preview of that!

If you have any additional questions don't be afraid to ask by commenting on my X posts or making a new inquiry through the website! I'd be happy to hear from you!

Cheers and happy trading!