Hubert Senters here.
Let’s take a look at another bracket trade. Bracket trade is a very simple trade. It can be a news driven event. It can be a price driven event. It can be anything. What you’re looking for is a substantial gap either up or down. In this example we have a up or gap on Paypal. Gap up at $139 and close around $146.
Now, we don’t want to play the initial gap because there’s too many uncertainties there.
Think about pioneer with arrows in your back. Don’t be the pioneer. Let somebody else do the first way then you come in and I’ll pick up the pieces. So now what we’re going to do is since they’re the battle of the field.
We’re going to see who’s going to win. Is it going to be the buyers and they’re going to push the price to $147. If so then we can follow them on the second way. Is it going to be the sellers? Are they going to sell it to $139? That’s okay if they do that then we’ll short it with a target of $131.
So basically all I do is let something gap up or down and just let anybody else trade it for that day.
And then I’m waiting for the range to be extended like an open range breakout on that particular range. I call them a bracket trade above $147 decent long below $139 decent short. And that’s the definition of bracket trade.
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Good luck. Hope it helps. See you on the next video.
Hubert.
