BLDR
- Thread starter KGTrader4
- Start date
You would prefer a stock in nice uptrend and there is no overhead resistance. Example is CNQ. Look at this chart. It is strongly, moving higher. Compared to BLDR, which is heading into multiple resistance zones, you want to avoid those. It would have to breakout thru multiple resistance zones before, it can head higher. Put the odds in your favor when you are able to. That would improve your chances for success although, nothing is guaranteed in the stockmarket.
Meh. Not so bad.
Orange line is QQQ. Candles are one week. Displaying bollinger lines, 9EMA, 2 std. dev. on the BLDR. Notice that at this time scale, BLDR seems to be in top reversal. Short term trades always work out best in a long term up trend. But, let's look at a day chart.
See, how it appears to be struggling, indecisive, right now? If I tightened the Bollingers up to 1.5 std dev I would see good penetrations and buy/sell signals but I think 2.0 std dev is a good threshhold value, and if you don't get penetration of 2 s.d. lines, then the buy or sell signal is a little bit weak. The uptrend on the day chart is a bit shallow and it is bucking the longer term trend on the weekly chart. I won't display the one hour chart but the last two or three days shows a solid down trend, and way underperforming the QQQ. This looks like a tradeable stock but I would buy when it is at an obvious bottom reversal on several time frames. Now if you had bought in July and held til now, you would be sitting fat, dumb, and happy. Even better if you had sold at the beginning of the year, and bought at the apparent bottom reversal around the 24th of January, then sold again around the first of this month.
I wouldn't want to be trading that stock right now. The time isn't right for that one, though it sure made a nice move from July until January. If that company interests you, then you might want to get to know the sector a bit, follow the news and the fundamentals. When there is reason to be optimistic, then you can buck the technical data and maybe get in before the thundering herd. Or maybe not. Honestly, my trades work out best when I ignore the news and just work with price and volume data. YMMV.
You might want to do some comparison studies with other stocks in the same sector.
Orange line is QQQ. Candles are one week. Displaying bollinger lines, 9EMA, 2 std. dev. on the BLDR. Notice that at this time scale, BLDR seems to be in top reversal. Short term trades always work out best in a long term up trend. But, let's look at a day chart.
See, how it appears to be struggling, indecisive, right now? If I tightened the Bollingers up to 1.5 std dev I would see good penetrations and buy/sell signals but I think 2.0 std dev is a good threshhold value, and if you don't get penetration of 2 s.d. lines, then the buy or sell signal is a little bit weak. The uptrend on the day chart is a bit shallow and it is bucking the longer term trend on the weekly chart. I won't display the one hour chart but the last two or three days shows a solid down trend, and way underperforming the QQQ. This looks like a tradeable stock but I would buy when it is at an obvious bottom reversal on several time frames. Now if you had bought in July and held til now, you would be sitting fat, dumb, and happy. Even better if you had sold at the beginning of the year, and bought at the apparent bottom reversal around the 24th of January, then sold again around the first of this month.
I wouldn't want to be trading that stock right now. The time isn't right for that one, though it sure made a nice move from July until January. If that company interests you, then you might want to get to know the sector a bit, follow the news and the fundamentals. When there is reason to be optimistic, then you can buck the technical data and maybe get in before the thundering herd. Or maybe not. Honestly, my trades work out best when I ignore the news and just work with price and volume data. YMMV.
You might want to do some comparison studies with other stocks in the same sector.
BLDR hits 70.50 at 10:30 AM EST today 3/24/22. your stop is 70.90...so did you follow your rules? are you out of the trade now?
Excellent. If you have sensible rules, then always follow them without exception.
You might watch this stock for a bit. Watch it on the day chart, i.e. each candle is representing one day. set your chart to show the Bollinger bands. Okay, this indicator isn't magic, but I do like it and the more you delve into how it works, how the values are calculated, and so on, and watch it in action for a few months, the more you will like it, too. Not saying you should do all your trading with the BB as your crystal ball, but just show it on your BLDR daily chart. When a candle pokes down below the bottom line, then goes significantly above it, you might be looking at a bottom reversal, and a good time to buy and try it again. Ditto at the top, which is a good time to sell off your long position or maybe take a short position. Don't do it with real money. Use your paper trading account. If you don't have one of those, get one. It will allow you to try out your strategies with realtime data, though it won't offer real time liquidity. Still, it is FAIRLY realistic and it will validate or invalidate a lot of strategies, a lot of rules, or debunk the same. Just try paper trading this stock that way, using the BB as your buy and sell signal. Good practice, and it will be a good comparison to what you were doing. Don't forget in your paper trading to set your stops and profit takers. I ALWAYS set a profit taker when day trading or in a short term swing trade. Why? Sometimes the stock will spike up (often this is just bad data but sometimes crazy stuff happens, like 1M shares being bought at market, or something like that.) way above the top band and then head back down toward the median, and you wouldn't want to miss it. Keep it higher than you realistically expect the stock to go for the next few candles. There are a lot of sensible rules for where to set your stop, but any realistic level is better than no stop.
Don't stop with BLDR. Try this with some other stocks that you have traded in the past with underwhelming results. Then set your scanner to pick stocks with interesting relative volume increases or suddenly higher volatility. Try some Bull Flag plays or ABCD plays, which I guess is what you were trying to do with BLDR. Try some low or mid cap stocks that are trading between $5 and $20 per share. The HFT mega machines don't mess you up as badly and you get some very good intraday action from such stocks when they show up in a well managed scanner. My VERY FIRST real money day trade was just such a stock, don't even remember what it was now, just it was a pharm stock, and they are known for big moves. I think I made like $1800 that day, buying and selling the same stock I think three times that day. Watch the premarket and the opening half hour very closely. Again, you should be doing this with your paper account.
You really should get a good book or two. Doesn't really matter which one, so long as it is fairly recent. They all mostly just rehash the same principles and strategies. Just don't buy all the stuff that the author is selling. All you need is the book, and to study it in depth. Here is one. I have probably 20 books on day or swing trading, but this is the first one I ever bought.
A lot of this applies nicely to swing trading. To find out what works in the multi day or multi week range, use your paper account. If I could recommend one other book, it would probably be
EDIT Okay I don't know what I did wrong there, but the two books, respectively, are "How To Day Trade For A Living", by Andrew Aziz, and "Bollinger on Bollinger Bands" by John Bollinger, and these can be found on Amazon.
You might watch this stock for a bit. Watch it on the day chart, i.e. each candle is representing one day. set your chart to show the Bollinger bands. Okay, this indicator isn't magic, but I do like it and the more you delve into how it works, how the values are calculated, and so on, and watch it in action for a few months, the more you will like it, too. Not saying you should do all your trading with the BB as your crystal ball, but just show it on your BLDR daily chart. When a candle pokes down below the bottom line, then goes significantly above it, you might be looking at a bottom reversal, and a good time to buy and try it again. Ditto at the top, which is a good time to sell off your long position or maybe take a short position. Don't do it with real money. Use your paper trading account. If you don't have one of those, get one. It will allow you to try out your strategies with realtime data, though it won't offer real time liquidity. Still, it is FAIRLY realistic and it will validate or invalidate a lot of strategies, a lot of rules, or debunk the same. Just try paper trading this stock that way, using the BB as your buy and sell signal. Good practice, and it will be a good comparison to what you were doing. Don't forget in your paper trading to set your stops and profit takers. I ALWAYS set a profit taker when day trading or in a short term swing trade. Why? Sometimes the stock will spike up (often this is just bad data but sometimes crazy stuff happens, like 1M shares being bought at market, or something like that.) way above the top band and then head back down toward the median, and you wouldn't want to miss it. Keep it higher than you realistically expect the stock to go for the next few candles. There are a lot of sensible rules for where to set your stop, but any realistic level is better than no stop.
Don't stop with BLDR. Try this with some other stocks that you have traded in the past with underwhelming results. Then set your scanner to pick stocks with interesting relative volume increases or suddenly higher volatility. Try some Bull Flag plays or ABCD plays, which I guess is what you were trying to do with BLDR. Try some low or mid cap stocks that are trading between $5 and $20 per share. The HFT mega machines don't mess you up as badly and you get some very good intraday action from such stocks when they show up in a well managed scanner. My VERY FIRST real money day trade was just such a stock, don't even remember what it was now, just it was a pharm stock, and they are known for big moves. I think I made like $1800 that day, buying and selling the same stock I think three times that day. Watch the premarket and the opening half hour very closely. Again, you should be doing this with your paper account.
You really should get a good book or two. Doesn't really matter which one, so long as it is fairly recent. They all mostly just rehash the same principles and strategies. Just don't buy all the stuff that the author is selling. All you need is the book, and to study it in depth. Here is one. I have probably 20 books on day or swing trading, but this is the first one I ever bought.
A lot of this applies nicely to swing trading. To find out what works in the multi day or multi week range, use your paper account. If I could recommend one other book, it would probably be
EDIT Okay I don't know what I did wrong there, but the two books, respectively, are "How To Day Trade For A Living", by Andrew Aziz, and "Bollinger on Bollinger Bands" by John Bollinger, and these can be found on Amazon.
Thanks Monster, all good thoughts.
I’ve actually read 3 books, not the ones you recommended, but How to Make Money in Stocks, William O’Neill, Think and Trade Like a Champion , Mark Minervini m and Technical Analysis Using Multiple Time Frames, bu Brian Shannon. All excellent. Read O’Neills book twice and am in the middle of second reading of Shannon’s book, which I’d highly recommend.
ive got a paper account set up on ThinkorSwim, used it a couple times, then started trading real money. Got to be more patient,
thanks for bringing up BB, I had them set on my charts, then for some reason took them off, but good idea to put them back on, good tool, I know how they work (std deviation of MA’s.)
anyway, learning a bit each day
I’ve actually read 3 books, not the ones you recommended, but How to Make Money in Stocks, William O’Neill, Think and Trade Like a Champion , Mark Minervini m and Technical Analysis Using Multiple Time Frames, bu Brian Shannon. All excellent. Read O’Neills book twice and am in the middle of second reading of Shannon’s book, which I’d highly recommend.
ive got a paper account set up on ThinkorSwim, used it a couple times, then started trading real money. Got to be more patient,
thanks for bringing up BB, I had them set on my charts, then for some reason took them off, but good idea to put them back on, good tool, I know how they work (std deviation of MA’s.)
anyway, learning a bit each day