As we've already concluded, price levels are rarely clean. That's because they're well known and we see stop runs all the time.
But that's when a level has already been tested. What if it hasn't?
I've got a theory, and it works well in my trading.
Let's take a look at a trade that we picked up at IWO Premium:
This is a chart of GS. It's been in a massive range. The levels are obvious. Hilariously obvious.
What the market likes to do is test levels more than once. This ensures that the levels are true enough to stay rangebound. If they aren't, then we see a breakout.
I'd wager that except for parabolic moves, price levels are always tested more than once.
You can use that to your advantage. And that's what we did here...
We closed out our calls for a 100% gain. Because we're using leverage, high rewards are very possible.
This "magnet trade" is one that we teach in the Swing Trades Secrets course.