Earlier on the Talking Markets With Marc And Andrew podcast, we selected Research Frontiers (REFR) as our trade of the week. Why? Is there some kind of promising news? We don’t trade on news, nor do we consider fundamentals for these type of ideas. Our swing trade strategy has only one objective: to capitalize on price momentum while maintaining a level of risk that is within reason.
No It's Not A Cannabis Stock!
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Research Frontiers (REFR) is an inexpensive stock that is in an attractive location, and has produced a chart pattern that offers an increased probability of price testing higher levels.
Buy Stop: 3.65
Stop Loss: 2.65
Target 1: 4.65
Target 2: 5.65
Target 3: 6.25
R:R 1.89 (approx).
This is a swing trade which means we are looking to capitalize on short term momentum. We utilize this same strategy across ALL of the markets that we follow. See our track record? Bitcoin reached our 3rd target of 10,600 (almost 1K pt avg. profit) the GBPUSD reached its third target in the 1.28’s (over 200 pips profit) and Gold reached its third target at 1820 (over 100 pts profit). Our strategy utilizes chart patterns from a BEHAVIORAL perspective which is what drives an asset’s price.
REFR has established a double bottom formation within a price location that signifies strength (a broader higher low). This can be interpreted as renewed buying pressure that can lure even more buyers once it breaks out. Pushing into the mid 4’s and 5’s is proportionally within reason, but keep in mind it can take a week or two to produce such a result. And if we’re wrong? We accept the loss at 2.65 which means we are risking 1 dollar to make an average of 2.
For a trade like this we would typically risk 1% of our capital. Keep in mind we have a number of trades that are in play simultaneously and do not want to become over exposed if the broader market produces a dramatic bearish retrace.
*This is for educational purposes only. Please read our disclaimer HERE.
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