By: Scott Redler
A lot of people ask me how exactly a RedDog reversal trade works. To highlight this setup, I think it’s best to use a real life example. Take a look at the daily chart of JP Morgan (JPM):
JPM has been crushed over the past week or so. I came in today looking for potential reversal trades, and JPM, along with the banking sector, was one of my specific targets. JPM opened slightly above yesterday’s low of $38.28 and quickly traded down through that level. When prices could not hold below that low, I initiated a long position with a stop just below today’s low of $38.07.
This setup often leads to excellent intraday trades and can sometimes set us up for a multiday swing trade.
