The SignalWatch Setups

The key to successful trading is to be able to identify the types of setups that consistently show profitability. At SignalWatch we have used our decades of research on this topic to develop Trading Strategies based on three lucrative trading setup opportunities: The Breakout Setup, The Trend Following Setup, and The Reversal Setup. Our Strategies leverage the unique characteristics of each of the Setups to find the trades that have the highest potential to make a big move.

Profiting from Market Changes with the Reversal Setup

Generally speaking, the ideal reversal will have a sharp "V" shape as price clearly shifts from downward movement to upward movement (or visa-versa). As the switch occurs, the traders who were driving the stock lower begin losing profits and thus closing their positions, which has the net effect of more buying. This carries the trade higher and builds out that perfect V shape. The Reversal Strategies in SignalWatch have an uncanny ability to lock on to the signals that produce this predictable market dynamic. When you combine the discounted entry with the clear upward move on the ascending leg of the V, you end up with a highly lucrative trade that is easily managed to a quick profit.

Trading the "V"

Generally speaking, the ideal reversal will have a sharp "V" shape as price clearly shifts from downward movement to upward movement (or visa-versa). As the switch occurs, the traders who were driving the stock lower begin losing profits and thus closing their positions, which has the net effect of more buying. This carries the trade higher and builds out that perfect V shape. The Reversal Strategies in SignalWatch have an uncanny ability to lock on to the signals that produce this predictable market dynamic. When you combine the discounted entry with the clear upward move on the ascending leg of the V, you end up with a highly lucrative trade that is easily managed to a quick profit.

Trading Breakouts as the Market Reacts

Breakout Trading opportunities occur as a stock surges away from its normal price patterns. These setups typically occur as a stock’s price breaks through its recent highs or lows. This type of setup is particularly lucrative because this price pattern tends to set off a frenzy that leads to extended moves.

Going "Parabolic"

A big advantage of trading Breakouts lies in the extended price movement that occurs after the initial break. As the stock moves to new highs, there is little incentive for anyone to sell, resulting in excess demand.

This price dynamic often results in trades that "go parabolic", referring to the shape of the chart formation that is generated by the above phenomena. In addition to identifying the conditions that identify the actual breakout, the Breakout Strategies in SignalWatch also identify chart conditions that tend to lead to these windfall moves.

Capturing Big Gains by Following the Trend

The third type of Setup in SignalWatch is known as Trend Following. This approach capitalizes off the well-documented tendency of longer term market trends to persist as time progresses. As the tide rises, traders that keep their positions in line with the trend reap the benefits.

Finding the Right Trend

When Trend Trading we are looking for stocks that are experiencing an orderly move to the upside. This makes trade management easy; when the trend is orderly, it is easy to tell whether the stock is still trending, or identify the points when the trend is possibly breaking down. The Trending Strategies in SignalWatch not only identify the stocks which are currently trending, but also find optimal entries into those trends based on our decades of Trend Trading research.