$Small Caps, trade them EASILY with IMTF, check it out!

$Small Caps, trade them EASILY with IMTF, check it out!   One of the things I kept on hearing when I was a retail trader was how you can really make a lot of money trading small caps.    The problem is you can make a lot of money but you can give it back and lose a lot too.   Why?  Volatility!   Trading small caps is an “Art”.    There are soo many factors involved in trading them CONSISTENTLY.    The trading plan has to be precise with very good money management rules.

With the introduction of IMTF™, a trader can now trade the probabilities of Small Cap stock opportunities easily.

Let me show you with some trades that have been taken over the last couple of days.

First, let’s setup the environment rules.   Here they are:

1.   Daily time frame is the controlling time frame.

2.  Look for a Setup or Failure on the daily time frame

3.   Look for Volume on daily time frame which serves as a catalyst

4.   Look for IMTF™ Cross on the daily time frame.

Now that we have outlined the basic parameters in our scanner, lets look at some trades that have been taken and the thought process behind them.

Note:  The charts will in TradingView.  However, you can use Tradestation too since the IMTF™ indicator is also available for that platform.   Soon, we will have it for eSignal, NinjaTrader, and Metastock too.

Here is the first example.   It is a stock named $SGNX.   Below is the daily time frame.

2017-03-13_161515_sngx

On the chart, price as consolidating below the green line which had a black cross IMTF™ resistance on it.    Two days ago, it broke the major resistance in the past and formed a black cross IMTF™ support on the green line      This was a clear sign for us to look for a bullish setup on the lower time frame.   We always look for a setup on the daily time frame but price has to be above the cloud for that to occur.   Price was too far away for the bullish setup to occur Friday.    As a result, we went down to the lower time frame to look for a bullish setup.

Below is the 60m chart for $SNGX.

2017-03-13_162027_sngx

On Friday at market open, a volume spike occurred which caused price to break the major resistance and close above the resistance (green line).     When this occurred, the green shaded area showed up indicating a bullish strategy.   On the next bar, a black cross appear at the green line which indicated the pull back entry level.    The entry would be 2.45, initial stop of 2.39 (Green dots), and a preserve mode and/or target at 2.96 which is the last pivot high.    This would be a 8.6:1 reward/risk.

The second example if $ALIM.   Below is the daily chart for $ALIM

2017-03-13_162715alim

On Feb 15, a volume spike occurred and price broke the cloud resistance and green shaded area appeared.     In the green shaded area, black cross IMTF™ support appear so a pull back trade could be executed.   The entry is 1.20, initial stop of 1.16, and a preserve mode/target of 1.33.   This is over 3:1 reward/risk which is mandatory in our trading plan.

Once that trade was exited, another trade occurred.   It was a trend continuation strategy.  Below is the daily chart again with the another green shaded area .

2017-03-13_163449alim-cont

The second green shaded area is a trend continuation strategy with a black cross IMTF™ support.   The entry is 1.28, initial stop 1.23, and a preserve mode/target of 1.45.    This is over 3:1 reward/risk ratio.

 

Here is an example.  The stock is $HTBX.   Below is the daily chart.

2017-03-13_163952_htbx

Friday, a green shaded area occurred.   This occurred indicator that major pull back could be occurring since a major resistance was broke.    For these situations, we look for a setup on lower time frame.

Below is the 60m time frame where a setup occurred last Friday.

2017-03-13_164355HTBX

The setup is in the green shaded area.   Black cross IMTF™ support appeared so a pull back trade was executed.   The entry was 0.89, initial stop of 0.87, and preserve mode/target of 0.96.   This is over 3:1 reward/risk.

Today, the instrument gaped up and went past our preserve/target, a good problem.    The trade was exited.    More IMTF™ cross support developed again but the problem in taking this trade was that there was a IMTF™ Dots resistance.    The reward/risk to that resistance was not good so that trade setup could not be taken.

These are a small sample of small cap trades.   You can look from Jan 2017 onward on social media for other small cap examples

 

 

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 or email us at info@eiicapital.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