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Here’s something that might sound backward at first…
When I’m setting up what I call the “hamburger hedge” trade — a breakout setup designed to profit whether the market continues or reverses — I don’t take it at the open.
I wait for chaos.
Most traders want to get in early, catch the whole move and maximize their edge. With this structure, I prefer entering after a big directional move has already happened.
That creates a win-win scenario. If the market keeps ripping in that direction, I’m in good shape. If it reverses toward the open, I’m also in good shape. Either way, I’ve got room to work.
The Setup and the Decision
I entered this trade around 11:50 a.m. — right after a big intraday push higher — using a 10-point-wide spread. As it turned out, I entered near the high of the day.
I didn’t know it was the high. I simply saw meaningful movement and responded to what the market was doing in real time.
That’s an important distinction: This wasn’t about predicting the exact turning point. It was about recognizing that the move had created favorable conditions and adjusting the setup accordingly.
The market then reversed hard. Because I’d entered after the push, I was already positioned for that possibility.
I added my hedge — shown by the little green lines on my chart — and gained another layer of protection without paying much for it.
Compare that with taking the same trade at the beginning of the day. The credit may be smaller, the risk less favorable and the directional move isn’t already working in your favor.
Full disclosure — I don’t have data proving this is the optimal way to enter. I have data based on the hour of the day, but not specifically on entering after a large directional move.
This approach reflects how I personally prefer to structure risk.
That’s where experience and judgment come in. Data can shape the framework, but live price action helps determine when the conditions actually fit the trade.
The Exit Is Part of the Setup
Before entering, I want to understand what happens under either outcome. If the market continues higher and closes the gap, I’m out of the woods.
If it reverses toward the open, I’m also out of the woods.
The hedge doesn’t have to activate for the trade to work. If it never hits, I take the net credit and move on.
That exit plan keeps me from forcing another decision after the market has already delivered the intended result.
Sometimes the “worst” entry — right near the high — becomes the best one. You just have to structure it correctly.
Nate Tucci
Tucci Trades
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
