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Gold/Mining/Energy : Day trading in Canada -- Ignore unavailable to you. Want to Upgrade?

To: The Devil Dog who wrote (3517)	7/10/1999 12:47:00 PM
From: keith massey	Read Replies (2) \| Respond to of 4467

Hey Wayne Some of these may already be obvious to you but I will repeat them for the sake of the thread. There are no set indicators (other than EMA and ADX) that I use constantly. I have a couple of pages of notes on buy/sell signals and I look for 3-5 of them to give me a buy/sell signal before I get in. Hopefully I don't have any of my signals giving me a sell signal at the same time. A lot of these signal are voodoo (e.g. Fib) but if they work fairly consistantly I do not argue with them. Long term chart - Note the values for all the major support and resistance level, trend lines and 50, 150 and 200 day simple/exponential moving averages. If any of these are close to today range than draw them on the chart. Note the ADX and/or VHF/Regression....is the stock trending or from the looks of the chart is it starting to trend (ADX moving up from a low base)? If the stock is in trend mode than use the strategy of buying on dips until you have evidence that the trend is broken. Look at the appropriate oscillating or trending indicators on the long term chart (e.g. Stoch 14,3 or MACD 12,26,9 / DAHL)...is a corrrection possible soon? Look at the range and volatility for the last 1-3 days compared to the last couple of weeks/months. You can measure volatility using bollinger bands (look for a contraction) or just use a standard volatility indicator which compares the range to the standard deviation of the range of X number of day (normally 14-20). If you have low volatility and 1 or more inside days before the move you are watching it is more likely that the next move will be big trending day compared. Also look for any patterns forming on the long term chart (e.g ascending triangle) and note the "breakout levels" where stop buys/sells will be hit. Also note the most recent candlestick formation....although all the indicators (either oscillating or ADX based) may be saying buy if I have a perfect even star at the top of a long trend I switch to short mode unless proven wrong. I need to know all that information (and a little more) to properly daytrading the stock. If I don't have a feel for where the stock is going on the day I am trading it I am more likely to get whipsawed. I doesn't take long to study a long term chart but I think a lot of people just take a quick look at it than bring up the day charts. I always look for signals in multiple time frames. I stick to the standard 1, 5, 15, 30 and 60 minute charts although. On my screen I will have the 1 and 5 minute up all the time and flip back and forth between the 15/30/60. I plot the 20EMA from all time frames on each window. For example, on the 5 minute I will plot the 20EMA, 60EMA (20EMA from 15 minute chart) and 120 EMA (20EMA from 30 minute chart). I know people are playing off several different time frames and I want to see what each one of them is think. This values for the EMA seem to works for the S&P's but for Canadian stocks I often use a shorter EMA (8,14,20). Here is my check list in short form. All times are in Central time since I am from Winnipeg 1. Note the time of day...look for reversals or big moves at 9,11,2. 9:00 - the public is done there morning buys and the big boys start taking over 11:00 - New York lunch which effect the whole market 2:00 - the bond market closes. Follow the bond from 1:30-2 and this will give you an indicator where the market will go from 2-3:00 (close) 2. Is there a gap...the bottom and tops of the gaps are strong resistance/support points. If it can trade above the gap for more than 1 hour than the trend will often continue 3. Look for the 9-9:30 pull back and see if the trend that was start at 8:30-9:00 continues from 9:30-10:00. If it does than the stock is likely to close in this direction. 4. Plot the trendlines on charts in different time frames...often you will see different trend starting/stopping. Also draw trend-channels...if the channel has been in play for a while expect it to bounce of the tops and bottoms and when the channel is finally breached expect a fair size correction (always be careful of whipsaws on this one) 4. Look for Vic 2B's (double top or double bottom after a trendline has been broken). After a second bottom buy just above the first up bar with a stop just below the bottom and visa versa for top. Or you can wait for it to break the 1-2-3 lines (neck line) to short or buy. 5. After a strong rally/decline draw the Fib. lines between the top and bottom. The 50% line will act as the strongest support/resistance but also watch the 32% or 62% for bounces. 6. Always, Always, Always look at the Candlestick formations in multiple time frames...this is one of the most powerful indicator in my opinion. It is rather useless on lower volume stock but on the high volume stocks it is like a window into the future. 7. Note the pivot points (e.g (H+L+C)/3, R=2p-l, s=2p-h). I find these work sometimes on the S&P and a lot of the old time traders still use them. 8. Of course draw the support and resistance all the charts. By using multiple time frames you will get better insight into how powerful a resistance/support line is....e.g. did it pull back hard in the 5 minute bar or did it do a slow and steady pull back. 9. Look for Grail buy/sell (e.g. 14 period ADX above 25 and rising on the 5-15 minute chart, buy on dips to EMA or sell rallies to EMA) 10. Always, Always, Always look for patterns that are forming (e.g. triangle). Are these forming in multiple time frames...if so they are a lot more powerful. 11. Watch the standard Oscillating and Trend following indicators because everyone else is and may play off these signals. These are just some of the thing I can think of off the top of my head. Not sure if any of this helped. I find I am more automated now and just apply all the rules/signals on the fly. Best Regards KEITH