Ichimoku Stock Trade of the Week 2-8-13 : MASI Masimo Corp.

On Feb 4, 2013, we received an Ichimoku 6 Time Frame Sell on the stock MASI, Masimo Corp. for the SP400.    The email alert is shown below:

The reward/risk was not good for a breakout trade.  As a result, we setup for a pull back trade on the 4hr time frame.   The entry would be 20.70, initial risk of 20.79, and the preserve mode value will be 19.90.    There are a lot of resistances so we choose a entry that would give us the best reward/risk ratio.    The consequences of taking this trade is that we may not get filled since it never pulls back to this entry.   That is ok, since we don’t lose anything if we don’t enter.  However, if we enter lower and we get stopped out with a bad reward/risk then we will lose a lot.

The max risk is 0.09 and the min. reward is 0.80.    This is a min. 8:1 reward/risk ratio i.e. 800%.    Here is the chart setup below:

The entry never triggered and price went to the preserve mode value.  Therefore, the trade needs to be canceled.    80% of the email alerts will never trigger if you set them up correctly.   Only the real trending opportunities will trigger.    Patience is required.   You need to WAIT for the “TRUE” trade otherwise you will never get to a level of consistent profits.

If you would like to learn how to trade like an institutional trader or learn more about our multi-timeframe email alerts, go to www.ichimokutrade.com

EDUCATIONAL USE. Commodity Futures Trading Commission, Forex, Futures, Equity and Options Trading has large potential rewards, but also has large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provided on the Blog is for educational purpose.

About the Author Manesh Patel