Lecture Notes: Primary Waves and AI Integration in Trading

Introduction

• Presenter: Scott Henderson, also known as Shooter.
• Topic: Primary waves in trading and AI integration.
• Note: Disclosure review is required at the end.

Changes in Primary Waves Approach

• New Format: More precise methodology.
• AI Integration:
  • AI helps expand horizons and reduce workload.
  • Aim is not to lessen work but to improve quality.
  • AI ranks setups based on designed criteria by analyzing loaded charts.

Trading Strategy and Criteria

• Primary Wave Setup:

  • Focus on wave intersections crossing at divergent highs/lows.
  • Requires confirmed high/low on a basing pattern.
  • Shift in volume and Vigit 2 strategy for buy signals.

• Target Goals:

  • Aim for 50% return of $114.46 from the current position.
  • Timeframe: 3 months to 5 years.

Risk Management

• Position Sizing:
  • Initial risk above prior low.
  • Position size adjustments at specific levels (e.g., add above 3884, full position at 4924).
• Profit Target:
  • First target at $68.64.
  • Consider potential acceleration due to low resistance.

Trading Decision and Strategy

• Common Shares Accumulation:

  • These are position trades, held for 3 months to several years.
  • Vet names according to VSL if preferred.

• Options Approach:

  • March $45 calls or sell April $30 puts.
  • Other options include March, April, May 50s.

Analysis of Stocks

• CBOE:

  • Concerns over MACD cross.
  • Breakout above 207.17 targeted.

• AVGO:

  • Evidence of seller exhaustion.
  • Strategy: March 250 calls, April 200 puts.

• SNAP:

  • Broadening formation; target of $17.91.
  • Strategy: Scale in and manage risk with 50% trailing stop.

• SNOW:

  • Double bottom pattern, upside to 234.
  • Strategy: April, May $20-25 calls.

• UPST:

  • Clean back test, T1 target 86.17, T2 103.
  • Strategy: March, April, May $80-85 calls.

Final Thoughts

• Best Setup:
  • 1st: UPST; 2nd: Mitch; 3rd: Snap; 4th: Snow; 5th: CBOE; 6th: ABGO; 7th: CAVA.
• Trading Plan:
  • Scale in, mitigate risk, and sell into rallies.
  • Rotate towards names with solid upside setups.

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• Closing:
  • Emphasis on trading plan and setup identification.
  • Encouragement for great trading until next time.