Yard Charts provides intelligent Buy and Sell suggestions based on technical pattern recognition. Each signal comes with a corresponding Stop Loss level to help manage risk effectively. This strategy aims to maximize potential gains while minimizing downside risk, empowering users to trade with greater confidence and discipline.

Bullish Flag: Buy At Suggestion & Stop Loss Guide

If a bullish pattern is identified, the strategy is to buy at a lower price and sell at a higher price.

Yard Charts provides a “Buy At” suggestion based on pattern recognition. In this example, the suggested buying price is $87.41. However, if you manage to buy at an even lower price within the potential buying range, it would be more advantageous. That’s because a bullish pattern indicates an expected increase in the stock’s price. Buying at a lower level not only reduces your risk but also allows you to purchase more shares with the same amount of money.

That said, it’s important to remember that patterns are not always 100% accurate. Sometimes, the expected trend may fail. Yard Charts uses a Stop Loss level to confirm the invalidation of a pattern. In this case, the stop loss is $84.75. If the stock price drops below this level, the bullish pattern is considered invalid, and it is recommended to cut your losses.

So, in this example, the suggested buying range is between $84.75 and $87.41. The lower you buy within this range, the higher your potential profit if the bullish pattern holds true. For instance:

• If you buy at $87 and the price rises to $100→ your gain is $13 per share.
• If you buy at $85 and sell at $100→ your gain increases to $15 per share.

On the other hand, if the pattern fails and the stock drops below $84.75, your loss is minimized the lower your purchase price was:

• Bought at $87 → loss of $2.25 per share.
• Bought at $85 → loss of only $0.25 per share.

This illustrates how buying as close as possible to the stop loss level can both maximize gains and minimize losses under a bullish pattern scenario.

Bearish Flag: Sell At Suggestion & Stop Loss Guide

If a bearish pattern is identified, the strategy is to sell at a higher price and aim to buy back at a lower price, profiting from the expected price decline.

Yard Charts provides a “Sell At” suggestion to help you decide when to enter a short position. In this example, the suggested sell price is $14.59. However, if you manage to sell at an even higher point within the recommended selling zone, your profit potential increases. That’s because a bearish pattern indicates that the stock is likely to decline in value. Selling at a higher price means more profit when the price drops, and it also reduces your risk.

Just like bullish patterns, bearish patterns are not guaranteed to be accurate. Sometimes the pattern fails, and the price moves up instead of down. That’s where the Buy Stop level comes in. In this example, the Buy Stop is set at $17.68, which acts as a risk control measure. If the stock rises above this level, the bearish pattern is considered invalid, and you should exit the trade to limit your loss.

So, in this case, the suggested short selling range is between $14.59 and $17.68. The higher you short within this range, the more you can potentially gain if the bearish pattern works. For instance:

• If you short at $17 and the price falls to $12→ your gain is $5 per share.
• If you short at $15 and it drops to $12→ your gain is $3 per share.

However, if the pattern fails and the price rises above the Buy Stop level of $17.68, you will have to exit and accept a loss. In this case:

• Shorted at $17→ loss of $0.68 per share.
• Shorted at $15→ loss of $2.68 per share.

This example shows that selling as close as possible to the Buy Stop level can help maximize potential profits and minimize potential losses when trading based on a bearish pattern.