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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Hands Off who wrote (1304)6/23/1999 6:38:00 AM
From: Eric P  Read Replies (1) of 18137
 
What do you think Eric? Should we give it a try?

I think further discussion of trading methods is an excellent idea. Recognize that most successful traders cannot and will not tell you exactly how they trade, but may be willing to share various tips or important pieces of information that they learned on their path to success.

5. Filters on when to stand aside
Personally, I use two key hurdles that the stock must clear before initiating a trade.

First, the overall market must be trending higher. Although, all stocks do not follow the market trend, why fight the market trend? Being a daytrader offers a huge advantage in that you don't have to always have a position. I believe that my odds of success improve by restricting my trading to times when the market is moving higher. Note: I judge the market trend based on the last ~5 minutes of market action, not the last week or month!

Secondly, I will not place a daytrade in a stock that does not have volatility. Specifically, I look at the 30 minute range for the stock and require that it be higher than 3/4 point. If the stock has not moved at least 3/4 point (lowest price to highest price) in the past 30 minutes, then I assume that the limited activity in the stock does not warrant my taking a position.

If you haven't already read it, the following link contains an excellent review of some of the critical aspects of developing a trading system: #Subject-22743 This link is to Taf's "Keep Your Eye on the Ball" thread. Just go to the last post in the thread and read it.

-Eric
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