300-Point Short Trade Plan
Low-Risk, High-Reward Setup
🔻 300-Point Short Trade Plan – Low-Risk, High-Reward Setup
This trade plan outlines a short setup at 22,040, aiming for a 300-point move down toward 21,800 or lower. Let’s break down the reasoning, execution, and potential risks involved.
🔹 Trade Setup & Execution Plan
📌 Short Entry: 22,040 – The execution level where we look to trigger the trade.
📌 Stop Loss: 10 points above 22,040 – Keeping risk tight while allowing for minor fluctuations.
📌 Trigger Confirmation: Bar closes below 22,040 – We need confirmation that sellers are maintaining control before full execution.
📌 Profit Target: 21,800 or lower – A full follow-through should produce an extended move down if the trade works as expected.
📚 Trade Theory: Why This Short Setup Works
1️⃣ Key Resistance & Rejection at 22,212
This level (22,212) was tested last Friday after drifting higher from 22,207. It acted as a cap on price, signaling sellers were defending that region. When previous key levels hold and price fails to break above them, the next logical move is a re-test of lower supports.
2️⃣ The 22,040 Breakdown is Critical
22,040 is the next key decision point where we want to see sellers step in. A clean rejection under 22,050 strengthens the case for a move down, as buyers fail to reclaim strength.
If sellers hold 22,040 as resistance, price has no choice but to liquidate lower, targeting 21,800 where the next major liquidity pocket exists.
❌ Trade Risks: How This Setup Can Fail
Even with strong levels in play, every trade has risks. Here’s what could invalidate this setup:
🔺 Failure to Close Below 22,040 – If price wicks below but gets absorbed and reclaims, it signals a false breakdown and traps shorts.
🔺 Sustained Closes Above 22,050 – If buyers defend this area and create a base, it could turn into a failed breakdown and squeeze higher.
🔺 Unexpected Macro Events (News, Earnings, Data Releases, NVDA Impact) – If a sudden catalyst flips market sentiment, it could create artificial buying pressure.
📌 Execution Plan: How to Trade This Smartly
1️⃣ Watch for Bar Closes Below 22,040 – This confirms sellers are in control. Jumping in early without confirmation is riskier.
2️⃣ Keep the Stop Tight Above 22,050 – We don’t want to give it room to run if the trade idea is wrong.
3️⃣ Let the Trade Develop – If price starts to cascade lower, ride the momentum toward 21,800 or below.
✅ Summary – Sticking to the Plan
This is a high-conviction short setup, but discipline is key. The main objective is to stay below 22,050, confirm breakdown with closes under 22,040, and ride the move toward 21,800. If the trade starts failing, it’s best to cut it quickly and reassess.
Let’s see if the market gives us this opportunity! 🍀📉