Did you catch that set up in IWM? I love this ETF because it is one of the most tradable tickers in the market. In fact, I check it daily and when I saw the pattern forming, I wanted to get this right out to you. Take a look at this chart and pay attention to the MACD indicator on the bottom.

The MACD is an excellent tool for spotting shifts in momentum and confirming a solid trend. (you can read more on the MACD here)

The fact that the black line is crossing BELOW the red tell us momentum is heading DOWN. This lets us know we should consider a PUT.  By using an option to exploit this signal we can increase the potential payout relative to what we have to invest in the trade, and it gives us leverage. Make sure to find an expiration that allows enough time for the move to play out. If it happens in a day, great but often it can wiggle around a bit before it hits our target.

I love teaching and sharing the parts of trading that have worked most effectively for me. In fact, I have a group of readers that have signed up to get the actual trade alerts I find for IWM. If you’d like to get more info on that program, click here.

Never stop learning as you trade and find the tools and strategies that work for you. I’ll keep sharing what I have found so keep an eye out for more emails!

I wish you the very best,

Wendy