The podcast discusses a trade on Meta ($META) stock initiated on a Friday, a day the speaker generally avoids opening new positions. The trade was based on the stock pushing through the 50-day moving average and the expectation of a positive seasonal trend in December. The speaker outlines a risk management strategy with a well-defined stop loss and explains how the trade ultimately yielded a positive outcome.
Trading Meta on Friday
• 00:00:15 The speaker typically avoids opening new trading positions on Fridays due to weekend anxiety and the potential for unfavorable market movement. However, given Meta's price action nearing the 50-day moving average and the approaching seasonally strong month of December, the speaker decided to make an exception and initiate a trade.
Risk Management
• 00:03:16 The speaker's strategy involved establishing a clear risk parameter for the Meta trade. This involved defining a stop-loss point based on the previous week's low, limiting potential losses to approximately 3%. This approach allowed him to feel comfortable with the trade over the weekend, knowing a defined exit strategy was in place.
Seasonal Trends
• 00:02:41 The speaker acknowledges the historically strong seasonal performance of the stock market in December. This positive seasonal factor contributed to his decision to take a position in Meta, as he felt the odds were in favor of a profitable trade during this period.
Trade Performance
• 00:04:42 The Meta stock experienced a gap up on Monday morning, demonstrating the potential benefit of entering the trade on Friday. The speaker notes that the trade ultimately avoided the need for last-minute trading decisions on Monday morning and yielded a positive result for the first few trading days.
Trade Channel & Resistance
• 00:06:15 The speaker observes that the stock price is facing resistance around $600, representing a remaining upside potential of 1.3-1.4%. He notes that this is a narrow channel trade, with a maximum potential gain of around 5%, and positions the trader for potential future moves based on the weekly chart's prolonged consolidation phase.