I’ve been talking about it for days now, but there’s a trading setup that is hands-down the best pattern out there right now…
And lately, it’s been showing up around three to four times a week.
I call it the “morning fader” pattern, and you should take advantage of it.
What’s great is that it’s predictable—you can spot it in advance.
You can use our Oracle system to guide you through these trades, and you’ve got an excellent risk-to-reward setup.
I’ve mentioned the morning fader at least twice during my Stocks to Trade Advisory videos. I want my subscribers to know what it is and what to do with it.
I’ve been urging them to study it, practice it, and use it!
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It’s also been a consistent topic during my daily Premarket Prep webinars when I prepare my Daily Income Trader subscribers for the day ahead.
So, let’s get to it…
What’s the morning fader pattern, and how should you use it?
What is the Morning Fader Pattern?
The morning fader pattern occurs when low float stocks gap up premarket and then fade into the open.
When the setup works, these plays hit the Oracle entry signal that was delivered that morning and then run up for a nice intraday gain.
Here’s a recent example of how the morning fader setup worked.
And by the way, this one is pretty spectacular…
Galmed Pharmaceuticals Ltd. (NASDAQ: GLMD) faded right into the open.
Oracle gave us a green buy signal at $6.36 per share…
GLMD hit the signal and then ran up to $23.80 this afternoon, for a massive 274.21%* win.
And here’s today’s chart:
GLMD Intraday, 1-Minute Candles Chart; SteadyTrade
Last Friday, SMX was our premarket fader:
That day, the Oracle green signal for the stock was $3.50 per share.
After breaking through the entry price, SMX (Security Matters (NASDAQ: SMS) topped out for the day at $7.20, booking a 105.71%* gain.
SMX 5-Day; 5-Minute Candles Chart; SteadyTrade
One of the things I love about this setup is that it’s very cut and dried:
- You see the premarket fade.
- You wait for the Oracle signal.
- If you get an Oracle signal and the stock hits it, you trade the stock.
- If it doesn’t hit the signal, you ignore the stock.
- If you bought the stock and it falls back to its morning lows, you exit the trade.
Fortunately, our Oracle system can interpret these patterns and tell us how and when to get into these fader setups to score big wins.
If you’re not familiar with our Oracle trading tool, you’re really missing out. Guiding us through the morning fade pattern is just one of so many things this system does.
Check out, Oracle, the tool I can’t trade without.
And be sure to tune in to my free live webinar every night at 9 pm Eastern (8 pm Eastern on Fridays), to see all the different ways I use Oracle.
Yesterday, we got a quick 16.08%* return from morning fader, Exicure Inc. (NASDAQ: XCUR).
We got a green Oracle signal at $2.30 per share.
XCUR hit the entry at 9:46 am and topped out at $2.67 by 9:50 am.
XCUR Intraday, One-Minute Candles Chart; SteadyTrade
Why Does the Pattern Work?
The morning fader works because it capitalizes on momentum shifts. When a stock spikes at the open, a lot of that movement is driven by emotion and FOMO. Once that initial excitement fades, reality sets in, and the stock often returns to more reasonable levels.
Basically, you’re playing the backside of the move—waiting for that moment when the buyers have exhausted themselves, and the sellers start to take control. It’s about timing and patience…
As with any trading strategy, I always advise that you learn it, memorize, and practice it in a paper trading environment before you risk your own capital.
Our StocksToTrade trading platform is the perfect tool for doing all of those things.
Grab your 14-day StocksToTrade trial today — it’s only $7!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade