 Hey everyone welcome to another episode of the low float strategies play with the high flying bull as always just as a disclaimer before we dive in just like to mention as always the information we provide is not financial advice you are 100 responsible for the investment decisions you make and lastly the information we provide is solely for education purposes and nothing more. All right so the company we're covering today is AAOI applied optoelectronics incorporated and you know it's in these markets it's hard to find a setup that's just so textbook it's so clean and you know when we find setups that resemble such clean textbook patterns you want to be on it and you want to be on it without any reservation or hesitation so let's walk through it let's walk through how this play sort of facilitated how we saw the opportunity and how we acted on the opportunity okay so first of all before we trade any stock we always have to ask ourselves what is the four criteria uh that sorry does our four criteria or is our the four criteria that we have are they satisfied now it does seem a little bit repetitive that I do this every single session but of course it's so important and so necessary to one's trading success that we have to go through it every time because it determines whether it's a trade we can pursue remember this is a game of identifying our edge and our criteria helps us to identify that edge and when we say when we identify an edge we're simply defining that as setups that provide a higher probability of working in our favor okay so the four criteria so we're first of all looking at the breakout pattern so we see that flat top flat top we'll see similar resistance levels met by higher lows again a bullish breakout pattern there so that's that's good we have our low float pad or low float stock so it's under 100 we can firm that right here 26 million and then we have over three times relative volume in fact almost 300 times relative volume so there are eyes on the stock it did pop up number one on our scanners for most of the day it was there and it was you know eyes were there and of course it makes sense it's such a textbook setup and then lastly we're looking at a valid news catalyst and we have one right there basically announcing a new product line with quantum bandwidth products of course that's that's always a bullish sign for the company and it's obviously very exciting news when you see a new product line being launched so that's sort of what brought volume in and that's what's kind of creating all that relative volume okay so now we're you know four out of four great we're now ready to trade the stock where are we gonna add so again as always I've highlighted here we're going to be adding on support and one thing I like to do when adding on support is to wait for a candle especially in these markets wait for a candle to sort of close above that support area and why I do that is I want to confirm that support is held if I simply just enter on the right when it's on the line I have no sort of confirmation of whether that support is going to hold sure I can look at volume but in these markets I want an extra little level of confirmation because in these markets it's so choppy you really want to be very selective with the patterns you choose to trade and how you identify your opportunities so if you did actually enter here I didn't personally enter here but if you did enter here you would see it move up and then it get quickly rejected so it looked like we were going to break it and then it get flushed down by that red candle so guess what because you bought on support it's a riskless trade for you and it probably came out with a little bit of a chunk of change that's great because guess what you've you're in a trade it was invalidated but because you bought on support you ultimately did not lose any money and that is a great great thing for traders okay so we'll wait now for the next support and this is particularly where I added I added as we see that green candle break above support so we'll see volume receipt great sign suggests the trend is still intact we'll buy on the discount that breaks out particularly with its body closing above support levels so my entries are about 345 I'll scale a little bit at resistance so on that candle I'll scale out just a tiny portion 10 to 20 particularly for the purposes of being defensive we want to be defensive and reduce our risk along the way and then you see throughout the day you know a slow but steady grind and when you have a profit target here at 381 so for me was 381 and as you see this kind of just slowly grinding up a couple hours to get to your profit target you can get impatient it's it's totally possible and sometimes a function of our impatience or sorry a product of our impatience is to kind of just change our profit targets change our stop losses because we get impatient we want to see the result already so a key for traders is to remain patient to remain you know persistent in your game plan and not really changing it because as long as it's still moving and trend it's still doing what it's supposed to do sure it took a longer time here but you have to let the trend play out remember the trend is your friend and if you can allow it to just sort of do its thing if it's still in trend let it play out chances are you're gonna you're gonna reach one of these outcomes right it's a probability thing we'll either see a stop loss profit target one profit target two etc so we let that play out we see sell so i said here i i did sell about i i mentioned i did sell a little bit earlier i do leave runners so i do sell portions and that's why it notes only six percent and my the majority of my position was sold at 381 so actually about here so we did sell about 381 and then i left my runners i adjusted my stop to break even at the very least just kind of wanted to see how this was going and into after hours it's actually consolidated in quite nicely so i'm going to be holding a small position overnight into the weekend and the goal is to see if this thing can actually gap up i've seen situations where stocks have gapped up from three to four to five all the way particular tickers going as far as even 20 dollars a share now i'm not trying to suggest that this is that's exactly what's going to happen here but the conditions are there such that it could happen and if it could happen this is where we really want to utilize that runner position of course adjusting our stop to break even just to protect those realized profits so you know it's it's riskless in your in your favor we've we have a three to one already realized you know there's not much left to risk here in this trade very curious to see where this goes but of course always having a plan and managing your risk through your stop losses is going to be very important so that you can realize these big winners if they are to facilitate without risking your realized profits all right so that's all for today and as always feel free to message me on discord if you have any questions also a nice little shout out to everyone that did come to our power hour stocks show just a friendly reminder we will be hosting these shows between three o'clock and four o'clock eastern time on mondays wednesdays and fridays you are always welcome to come join and you're always welcome to bring questions we're more than happy to help all right guys thanks for listening and we'll see you next time