Baozun is a good example of the Trade of the Day (TD) setup, as illustrated in the chart accompanying this post.
We didn’t trade BZUN today, however had we done so, using proper entries and exits would have garnered $1.60 today. Please study the charts, as we will consider a day trade on this stock tomorrow.
Use the TD Setup everyday to extract money out of the markets.
The TD setup triggered a long once price rose out of the Opening Range flag at 21.25. SOTEMA ascended at greater than 45°, a sign that pullbacks to the 9/20ema should be monitored for buyers. A loss of these two averages would signal an exit. Price dipped to 21.75 in this case signaling an exit into lunch.
At 13hrs:50min price emerges above the 9/20ema signaling a long into the evening session. Price closes near the high of the day. A trader could swing all or a portion of their trade. We like to take 1/2 off at this point.
Note RSI was rising and MACD was above its signal line in both cases, confirming price action and long triggers.
Adding Parabolic SAR for confirmation
Here is the same chart with Parabolic SAR buy/sell signals highlighted. Focus on what triggered the initial entry “Entry 1”, as prices rises through SAR (red dashed vertical line) where it triggers a buy signal at 21.18.
This is also where the first flag occurs during the Opening Range. As price rises following the buy signal, note how SAR trails price below, rising up to meet price. At 21.75 (+/-) price action dips and touches the trailing SAR (red dots) triggering a sell signal.
At “Entry 2” price rises and touches the SAR signal at 13hrs:50min, trailing overhead. This event triggered a long at the intersection of the red vertical lines where price meets SAR.
Strategy and rules lead to consistency
Study this strategy and commit it to memory. Using a systematic approach, with rules that confirm entry and exit are the best way to achieve consistency in your trading.