Hubert Senters here.

I’m going to cover the question I get a lot because there are bracket trades out there. Common question what is a bracket trade?

Bracket trade is a really simple trade. It happens around earnings or new related items. So in this case we’re looking at the stock symbol RL which is Ralph Lauren.

And you can see there’s a gap up in there so that was the close before and then this was the open. Now, we have a gap. It can be earnings. It could be news. It could be related to pretty much anything.

But first we need a gap either up or down. Now, from there what we’re going to do is we’re going to let this day trade. We’re not going to trade when it gaps up or if it gaps down.

What we’re going to do is we’re going to let it close and then we’re going to mark our potential entries and then that is considered the bracket trade.

And then we know if it trades above $126.98 that will be a potential long or if it trades below $120.03 that’s a potential short.

Good luck. Hope it helps. See you on the next video.

Hubert.