Playing the 1-2-3 set up

I wanted to go over what has become my favorite set-up lately.  The 1-2-3 reversal set-up.  Which a short description is higher lows.  Why I like this set up so much is that you are getting a great price since it is at the beginning of the trend.  It is also very easy to manage, in my opinion with awesome risk/reward.  Normally 5 to 1 if it works out correctly.  Many times with this set-up, even if it doesn't work as planned, you can still walk away a small gain.  This was originally taught to me by Sayed Szaman @NYCTrader.  Here is my take on it and how to trade it.

If you know anything about technical analysis, it is understood that a stock price moves from support to resistance and vice versa.  Knowing this we can using this as well as a few other indicators to get into a stock at the beginning of a new trend.

Here are a few examples from today 5/26/15

The market opened up today and sold off pretty fast.  I had a few stocks on my watch-list that I made last need, YOKU and FEYE

FEYE

We use the 9 and 20 ema in chat room to time entries and exits.  This is how I executed my trade.
With this trade when I had entered 44.10 the stop was 43.90.  If we sell at the top of this move 45.50, that is $1.40.  That is 7 to 1 risk/reward, the type of trades that we need to make.

YOKU

Stock moved over $1.50 from my buy price.

As we can see in both examples, there is a defined small risk.  Using the 9 ema in this situation was the reason for the entry.  When timed correctly, you are normally not ever in a losing position.  You can just sell some into resistance and ride the rest.  Its easy when you are in a winning position and have a plan of where to sell.