Ambush Trade

Ambush trades were developed by Hubert Senters of Trade the Markets. I believe he uses the setup mainly to trade futures. I find it also works well with trending stocks, stocks that gap, and stocks that test support/resistance in the opening range.

The first example below is FSLR's earnings gap on Friday. Price started to move lower, retraced into the ambush zone (50-62% retracement) and reversed. The basic rules are price must breach the 50% and cannot close beyond the 61.8% level. Wait for confirmation and enter the trade. Ideally, we target the 50% Fib. extension, but if price pauses and attempts to reverse at the base, take a partial.

The second example is PRGO today. PRGO fills yesterday's gap in the opening range, moves up to test resistance and retraces into the ambush zone. Wait for confirmation and take it long.

NFLX initially looked like a good ambush setup until price closed beyond the 61.8% retracement level.

AMZN initially looked like a good ambush setup until price closed beyond the 61.8% retracement level. In this case, the setup did give the desired result, but we have to establish rules and stick to them. I'm still experimenting with this setup and may eventually work around this problem.

Swing Trade Setup:

RIMM filled it earnings gap today and sold off on high volume. I think she's done here and will be looking to swing swing short below 20 EMA ie. trendline break.