 Welcome back folks tonight. We are showing you the theory first and then the real stuff afterwards So stick around I'll show you the theory what I mean about double bottom to recovery and then we'll show you exactly what we did when we alerted the Amazon play today The idea is I'm sure you guys all know this but a double bottom is an area where we have both The buyers are actually showing up at the same point. So basically you have a Possibility it looks like this and then it turns down to certain level drops and then comes back up and Then the next day could do like this. Oh now we have a double top and then it drops to a certain level and then Drops again to a point and then what Oh, here we are. What do we have here is? This is what I mean about the double bottom Not talking about a one-minute chart that you're only looking at five minutes behind what I'm looking at is something that is previous day Two days before it could be a 15 minute could be the one hour chart could be a five minute I like the five minute, but this is a double bottom What happens is here basically you have shorts that took the play from there to here will cover at this level because You know, they reach a point where they found buyers at this level. So basically we will have Short salaries covering their positions here buyers coming in because they know that this is a safe area Because the stop is if we fall under This is a safe area to enter. This is the double bottom, right? Double bottom you guys need to see this in many charts. You'll have this happening and This is what we we want to show you here the recovery. Well, let recover all the way to the top I really think so we have a We were in a situation here as an example. We're in a situation where there was resistance before Pope through came down to that and then flushed to that double bottom the recovery is to where is to the previous resistance ball support now resistance so Here is probably what it's going to do. So the idea is Looking at this move. Is it worth it? This is what you have to ask yourself is that move worth it from the ball double bottom to what? Recovery to what? Where's a target? So in this particular case, we analyze that this double bottom or this line was at 30 90 More or less, right Where should where will it go to? And I called and chat 31 29 ish Pretty close to that. So you're looking at how much is that? $39 right is the $39 worth it. Can you see that? Yes Let me remove this chart for a second You're looking at $39 $39 you have to look at Delta. What is Delta? Delta for the 30 we took the 32 C's was roughly 0.20. What does this mean? This means that for each dollar rise Delta of 0.20 means for each dollar rise premiums will move by 20 cents, right? We paid 720 This is the price we had. So we're looking at $39 for a possible rise at 20 cents 20 cents per dollar 39 times 20 is what? 780 Right, so 7.20 plus 7.8 is 15 total Now, is this worth it? If the answer is yes Well, in my opinion it is right because we had this double bottom Well, where we're taking the risk of what if it loses the bottom That's the that's when we pull the trigger and then we decide to step out of it However, if it starts moving our way This can be the reward now obviously We're taking this week's expiration. There is decay time Amazon will move If it goes our way, but obviously if it's not going our way, it's gone We're going to lose all the premiums just over time so Shooting for that you can aim at a little lower making sure you're on the safe side. However This is how I analyzed it was worth it From the lows to the target. We had a possibility of getting 720 to something that is Worth it at at at target. We ended up selling for 12, which is you know, not bad all considering it ended up being a 66 that makes it about that 66 percent trade which is you know Not so bad in my opinion For something that was pretty quick and in my opinion safe because it was on the double bottom With a very precise target that we could see as a flashing red kind of thing So here's here's how it was in real life This is how we saw things happening Amazon took a gap up this morning. Basically. It was opening Right there. I'll show you here. This was a Double top very precise. It's not crossing this line And right off the top at the gate. We started pulling back pulling back to where pretty much Where this was a top? on on a previous day, so basically dropped under and this is a back test back test is this line be Lost lose it and then it tests it tested and says no and no to what well no to here Right, and this is what I was telling you about. This is the low And this is one two and it doesn't want to break under and got to that line So it creates a channel and this is the channel. We're in told you about this So this becomes the double bottom that we want to trade and where will it go? It will go to that See that Because we have and I'll show you exactly where I had in mind and I'll bring this closer to you So just keep in mind that what I have at the bottom Here is the previous Double bottom that I just mentioned now Double bottom it looked really appealing at that time and then I thought it was it would bounce right away What it didn't and then it came down like this and This week, I think I alerted pretty much on this week You know how these wicks are showing that the bottom are getting bought bottoms are getting bought and then there's this this pseudo red area here that was just a little under our premium and This Becomes your stop if we lose it. We lose the previous day Support and we're moving lower. So we want to exit that at that point and I told you about Delta If we're losing three dollars four dollars to the downside. We're looking at losing 304 times to So you're losing what you do losing dollar on your premium If if that so if you paid like we did 720 it'd be down to 620 It's not the end of the world because we're looking at a target which is in this area and That Is where I usually draw a line like this? See this is a 31 32. This is the top I had 31 29. I like to put it just a hair under and I'll show you why I like to grab See this is 31 29. I like to grab these these highs and maybe just a little lower and This is where we this is where we ended up to so basically what you did you took a safe play in This area on the double bottom and your target is to what first resistance Is this going any higher by the end of the week? Keep it doesn't matter. We had a plan and it worked You you managed to have a safe entry on a risk management knowing that if it drops below You are pulling out of it and you had a target before you entered and on top of that You were able to calculate your Delta on how much you would be Your risk reward would be so There you go. We showed you the Technicals and how it could be done in the first place and then showed you On real life a real chart what happened and how we alerted. Hope you guys learned something today and see you again