When you get a clear and obvious setup, it tends to slow things down a little bit, allowing you the ability to better plan your trade. These setups, at times, can even make trading seem “easy,” even though we know that couldn’t be farther from the truth. However, this is exactly why it crucial to be able to spot the obvious patterns and setups.
These are the trades that tend to work out the best and give traders the highest probability of success. It’s an idea we have talked about a lot here, if you can see it plainly and obviously — so can countless other traders. Remember, we want to trade with the market, not against it.
Which brings us to our trade today. Workday (WDAY), after hitting key resistance at 192.5, now seems to be on its way back down to 182 as it continues to consolidate in its month-long rectangle pattern.
As you will see in the video breakdown below, this pattern is easily identifiable, which can lend to the illusion of it being easy to trade. While these levels can act as guard rails, you still need to plan your risk management in advance of the trade.
And for even more about my favorite stocks, setups, and strategies, join my students and I in The Profit Machine. Every week, you will get exclusive access to all things option trading, from the stocks I trade the most, and the setups I look for when trading. The best part, you’ll receive all my trades every step of the learning process, so not only will you get a world-class education, but you’ll also earn while you learn.
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Good Luck With Your Trading!
Christian Tharp, CMT
This post was originally published on Wealthpop