When a trigger is called & posted what exactly does it mean and what actions should one take at that time?
It means for that point in time and hopefully for the next period the leading market indicators are positive and then your target stock is moving up from yesterday's close. Remember we have already chosen the stocks that fit the set up for possible reversal (Range contraction or Expansion day, doji possible reversal, breakout of 20 day moving average on high volme, bounce off support into the trading channel, breakout of cup handle chart formation, etc) The "buy" is just a confirmation of that Reversal (be it a downtrend that finally reversed i.e. CAMP, KANA) or Continuation of the original uptrend (i.e. ELNT, MRVC).
That would be the "breakout" and confirmation of the continuation of the uptrend or new uptrend. I would buy and immediately put in a "stop less" you are comfortable with. 5% is okay...
It is NOT a signal to buy any time from that point forward because it can move up 2 or 3 points and that might be "IT" for the day. Again, if you trade by yourself you can get used to watching for the "HIGH" of the previous session to be surpassed by 1 to 3 ticks (1/4 to 3/4 of a point). If you wait too long you are defeating the purpose of a 'daytrade'.. If we were buying for a swing trade or position trade, it would be different.
- A signal that one should have already seen the movement, noticed the impending trigger on their own and gotten into the stock *before* the announcement (the announcement just confirms it or lets others know that may have missed it on their own.)..
Nope, that is the not our goal..It defeats the purpose of 'buy triggers'
Before you even enter your first trade, make sure you are watching the
LEADING MARKET INDICATORS
For example, if the nasdaq futures are very positive, and IF the OEX, TRIN and TICK are looking at buying programs you will know that right BEFORE the open.. That is your first hint of a "get ready"..
"Get set" would be if the stocks has already moved into green at the open you at least have an opening point to begin. 4 or 5 might be in the red at the get go. These 4 or 5 might move up later in the day but I would zero in on the ones that look positive. By looking at the 5 and 15 minute charts you can see how the trend is moving during every 5 or 15 minute minutes for the first half hour. Now run your charts side by side with the TRIN and Tick.
The Tick
The number of stocks trading up minus the number of stocks ticking down on NYSE. Keep the tick on a 5-minute chart. If the Tick is strong and in POSITIVE territory, then you know more stocks are trading up than down. The reason we wait for 20 to 30 minutes is that the tick can be misleading and the stocks that gapped up showing a tick at say 1,000 can be ready to head back down again.
The TRIN: This one measures the volatility of the stock. Here you have the reverse. You want a low TRIN.. A rising TRIN tell you the shorters, or bears are trying to get ahead of the game. When falling stocks dominate the volume, the number reads over 1.0.. When rising stocks are in control, the number reads under 1.00.
You really want to trade in a falling TRIN market. Therefore the TRIN should be below .9.. If it moves above 1 you might have a problem.
The S&P Futures
These are important in that it shows the 'inside machinations' of our state of the economy.. What is the sentiment of investors and traders?
Use a 5 minute chart of the S&P futures, with a 20 and 200 period MA running through it. Futures that soar are showing you a good market to be long in. Futures that tank, abandon your long positions and take profits.
If you area beginner, FORGET the nasdaq level II screen, Be comfortable with the market indicators before you start scalping.
- Or possibly something else that I?m missing? |
