T Stamp Inc. (NASDAQ: IDAI) doubled in price on Tuesday, and did it again on Wednesday.
If you missed your entry on the two incredible days of its run, I’m going to help you out for the next time…
Because when a stock has the potential to be a solid runner — it often gives you more than one chance to enter.
So stop chasing random entries, screwing up your risk to reward, and getting caught with unexpected losses.
Learn how to look for the right entries below…
Three Entry Points for IDAI
Not every stock will give you as many chances to enter as IDAI did yesterday. But learning how to spot these entry points is invaluable for your future success.
So pay attention to these patterns and entry points — but also why these entries are important…
Red to Green Move
Early in premarket yesterday, IDAI made a bullish move…
It went from trading red on the day (below the previous day’s close) to trading green on the day (trading above the previous day’s close).
That’s important because a stock trading above its previous close can indicate an upward trend and momentum.
That’s why we look for stocks each morning that are gapping up.
Shorts on the other hand like to pile into stocks that are red on the day. Because that can indicate a downward trend. But when that trend reverses and it goes green again, the shorts are wrong.
And if the short sellers have any kind of risk management strategy — they should be buying to cover to exit their positions.
You can see on the chart that when IDAI went green, shorts were covering and pushing the stock higher…
IDAI chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
But if you missed that move, there was another potential entry…
Break of The Previous Day’s High
The plan I emailed out to Daily Market Profit subscribers included an entry at the break above the previous day’s high.
I covered different key levels and why they’re a crucial part of short squeezes here.
The break above the previous day’s high means all the short sellers from the previous day are all underwater.
And that’s another panic point for shorts and a good potential entry for long traders…
IDAI chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
Unfortunately, both the red-to-green move and the break above the previous day’s high happened in premarket.
So if you’re a new trader or trading conservatively, you would’ve missed it … But IDAI gave you another entry…
Dip and Rip
IDAI had a dip-and-rip style move right as the market opened. It wasn’t a textbook move, but the same idea applies…
The stock pulled back and had its ‘dip’ in premarket. Then a few minutes after the market opened it ripped through the premarket high.
Ideally, dip and rips happen after the open to lure in short sellers. See why the dip and rip is a good pattern for short squeezes here.
But aggressive short sellers aren’t scared to short in premarket. Plus, when the stock started to pull back, the stock was already above the previous day’s high.
So all the shorts from the previous day were in the red. And they were eager to get out of their positions on a dip…
And that sent the stock spiking right at the open.
Learn the seven checklist items for dip and rips here.
IDAI chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
I hope these three entry ideas help you realize that you don’t have to worry about missing trades…
If a stock is going to be a good runner, chances are it will give you more opportunities to enter.
You just have to wait for the right entry with good risk to reward and take your shot.
When it’s time to get out of a trade, use your risk-to-reward ratio and exit when your goal is hit.
Or use Oracle’s support and resistance lines to guide you. The Oracle indicator comes standard on StocksToTrade.
If you want the full Oracle algorithm, attend a webinar here to see what it can do for you.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade