Jason Bonds Trading Patterns Cheat Sheet 1
Jason Bonds Trading Patterns Cheat Sheet 1
Jason Bonds Trading Patterns Cheat Sheet 1
March 3, 2020
March 19, 2020
Uncovering momentum stocks potentially poised for massive gains in the small-cap
vspace is great and all. However, I knew in order to become a complete trader, I needed
to expand my horizon. You see, by focusing on just one type of stock, I realized I was
Chart Courtesy of StockCharts.com
If you look at the chart above, the stock made a sharp move higher and had a rest stop.
The area highlighted in yellow is what’s known as the flag, while the blue rectangular
area is known as the flag pole.
While not a given, typically after the rest period, the stock breaks out.
The bull pennant pattern works very similar to the bull flag
pattern.
Chart Courtesy of StockCharts.com
Ascending Triangle
There are three things I look for to identify the ascending triangle pattern:
● A “ceiling” of resistance (sometimes I call this the supply line)
● A series of higher lows
● The resistance line and the line connecting higher lows should be able to
connect at some point, forming an acute angle (almost like a triangle!).
Once the stock tops that line of resistance, it typically moves higher.
For example, check out this chart below, it’s a classic ascending triangle pattern.
Historically, you’ll see stocks flirt with the resistance area before breaking above it.
That’s exactly what we saw here. As you can see below, once the stock broke above
that blue horizontal line, it jumped higher!
Descending Triangle
Remember the ascending triangle pattern? Well, the descending triangle pattern is just
the opposite.
With this specific setup, I want to see three things happen:
● A series of lower highs (a downtrend)
● An area of support
Chart Courtesy of StockCharts.com
Now, we’re not looking to short momentum stocks because it could be extremely
dangerous. The purpose of studying bearish patterns is to improve the probability of
success when hunting down oversold stocks set to bounce (using my trusty fish hook
pattern).
Chart Courtesy of StockCharts.com
As you can see above, if you wanted to try the fish hook pattern in BYND… it wouldn’t
have been wise because there was a big descending triangle pattern there.
I want you to go out and pull up some stock charts and see if you can spot this pattern.
I find it’s helpful to actually draw and annotate the charts.
This brings us to the bear flag or pennant pattern.
By now, you should have a good understanding of how to hunt down momentum plays
in small- and mid-cap stocks. You can find high-probability trades in these classes of
stocks to put yourself in a position to maximize profits in a short period of time.
Not only that, but you should be well-equipped with easy-to-use and highly-effective
patterns to locate stocks poised to move.
If this doesn’t click for you right off the bat, don’t worry. Making it in the momentum
trading game is not a sprint, it’s a marathon. Go back and review these lessons, paper
trade and things should eventually click for you. If and when they do, you’ll be armed
with a high-probability momentum trading strategy designed for fast profits and risk
minimization.