Yeah, I'm sure they are. I'll tell you a little. I have been doing this for years. I've been studying TA for 14 years. I got into short term trading for one reason; I was good at long term and very short term and nothing in between. I hold nothing overnight.
Disclaimer: Tim's a good guy and this is his thread, and he like 2-3 day position trades, and THAT IS NOT WHAT I AM TALKING ABOUT HERE AND DON'T TRY THIS AT HOME. My ideas could probably be incorporated into a 2-3 day format, but that's not what I do. Also, you'll notice that I did not say long or short on my watch list. That's on purpose, so if anybody comes back with some snotty remark about "what I said the stock would do", I'm covered.
I train new guys occasionally, and they pay me, so I don't give out specifics for free. What I look for, in general, are stocks that trade over 1 million shares a day. I like a daily range of more than one point. I eliminate most of those for various reasons. I don't trade one stock up and down all day, but lots of guys do. Right now, for the past month or so, I've been much more successful trading short. It may be because the market in general has tended in that direction. In any case, I'm very familiar with the well known big stocks, but I may not trade them once in a given week. Last week for exammple, I did not trade ASND at all, I traded CSCO a couple of times, DELL one time last Monday (took a 650 buck loss and took it off my screen for the week).
There are two things I'm looking for right now: stocks (that fit the basic rules) that have made (or are making) big moves in either direction. Without getting into specifics, I'll go long a strong stock if it performs a certain way, but I'll short it if it performs another way. The same with a stock that looks very weak. Look at the intra-day charts (if you can find one) for INKT and DANKY yesterday and you'll get the idea. My two best trades yesterday were long on DANKY right after that fast move down, and I shorted INKT at 88 yesterday morning. I missed trades on SQNT, AGPH, and about 10 others.
Pull up a chart on each of those stocks I have on my watch list and you'll see that they all traded big volume and/or had significant moves on Friday. You then have to check them out fundamentally and draw a conclusion.
I have several signals that I watch on a 2 minute bar chart. I watch the S&P 500 Dec Futures contract, the DJIA, and the COMP.
For stocks, I watch a 2 minute candlestick chart with a 13 period RSI.
I check the daily chart on every stock I trade prior to initiating the first trade of the day, and if I don't like the daily chart, I may toss out the stock for no other reason.
I do not trade in anticipation of a trend change as a general rule. I almost always trade long on weakness on a strong stock, and short on strength in a weak stock, in anticipation of that stock continuing its original trend. This is on a 2 minute bar, mind you. An average trade for me is about one minute to 10 minutes. Sometimes there are exceptions, INKT is a good example. I knew it would back off on Friday, so I waited for a move up at the open. Had it not moved up, I would not have shorted it. It did move up, and I got real lucky.
Many times, I'll look for a quick bounce on a fast up or down move. DANKY went down a dollar in about 10 minutes on Friday. I watched the chart and went long, anticipating a quarter or 3/8 move back up.
This is all real easy to describe. The first trick is knowing when you pulled the trigger at the wrong place. When you get that wired (in other words, you are not losing money on every damn trade) then you can concentrate on exit points. Exit points are more important than entry points, once you get the hang of trading. The reason is that you can choose to enter or not enter. But once you have entered, you MUST exit.
When you start trading, you see that the difference between a trade that was making you money, then went the wrong way and you lost money, is simply the exit point. The first thing you have to learn is to not get pissed off when you take a 3/16 profit and then the stock goes your way 2 points.
Then, of course, we have the overall vagaries of the market. What was working 3 months ago is not working now. (Unfortunately) It takes so much time to get a handle on what the market is doing, then when you do it stops doing that and does something else.
Over the years, I've been pretty good at prediction of the way the market goes on a weekly basis. Last week, I would have bet money that overll the market would go down on Monday. I was wrong. Wrong again on Tuesday. So on Wednesday, I sat and watched. One trade. Thursday 3 trades, lost money. Friday, I made the money back I lost earlier in the week, and I was happy it was over.
So for now, I'm paying attention to stocks that don't necessarily follow the overall market pattern, and at some point in the future when the market decides which way it wants to go, I'll ride that train.
But for now, at 4:00 every day, I'm in cash. The maximum amount of heat I take on a bad trade is 5/16. If I'm short a stock at 20 and it shows 20 5/16 on the offer, I'm out.
And of course, I always press the right button so I don't buy instead of sell. <ggg> |
