Hello everyone,

It’s Barrie Einarson from Trade Ideas with another edition of “What Makes This Trade Great.” To Subscribe: https://go.trade-ideas.com/SHQ
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Today, I want to take a look at CHPT because this was another really good example of what I love about our AI alerts—and, more importantly, why you don’t necessarily have to force the first move to make a great trade.

The original AI alert came through at 7:58. If you had taken the trade right away, you actually had an opportunity to make money on the initial move. CHPT popped up to around $7.82.

But the real beauty of this trade came afterward.

Sometimes the Stop Is Just the Beginning

The trade eventually hit its stop at $7.35.

Now, at first glance, you might look at that and think, “Well, the trade didn’t work.”

But that’s not necessarily how I look at it.

The stop was positioned about halfway between the stock price and the original entry. In this particular case, the original entry was around $7.47.

And that’s where things got really interesting.

If you were watching the stock and waiting for a potential re-entry, you had an opportunity to get back in around $7.47—before the stock really started moving.

And look at what happened next.

CHPT went from approximately $7.47 all the way up to $8.65.

That’s a tremendous percentage move.

The Re-Entry Was the Real Opportunity

This is exactly why I like looking beyond whether the initial trade worked or failed.

An AI alert gives you information. It doesn’t mean you have to blindly enter and stay in the trade regardless of what happens.

Sometimes the first entry isn’t the best entry.

Sometimes the stock needs to shake out some traders, hit a stop, and then show you another opportunity.

That’s essentially what happened here.

The initial alert gave us the setup. The stop gave us additional information. Then the re-entry provided what turned out to be an excellent opportunity.

Of course, there’s always a risk that a stock doesn’t come back after stopping you out. That’s part of trading. You can’t assume every re-entry will work.

But when the setup lines up again, it’s worth paying attention.

What Happens Next?

At the time I’m looking at CHPT, the stock has pulled back from that move.

I believe there may be an earnings-related catalyst today, so there could still be plenty of volatility ahead.

One thing I’ll be watching is VWAP.

If CHPT can hold VWAP and establish some strength around that level, we could potentially see another move later in the day. Sometimes you’ll see a stock consolidate around VWAP and then pop right off it for another run.

Of course, we never know for certain what the stock is going to do next. That’s why we’re watching the price action rather than trying to predict it.

The Big Takeaway

For me, the biggest lesson from this CHPT trade isn’t simply that the stock went from $7.47 to $8.65.

It’s the importance of recognizing that a stopped-out trade doesn’t always mean the opportunity is over.

The original AI alert gave us a trade idea. The stop helped define the risk. And then the re-entry created what was arguably the best opportunity of the entire move.

That’s what made this trade great.

Sometimes the best trade isn’t the first trade.

It’s the one you recognize after the market gives you a second chance.