Day Trading - A successful method for losers

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Sorry maxwellreid,

After rereading my response, I realized I didn't answer your question. So...

In a good market uptrend, I try to use 100-200% of my trading capital. In a sideways market, I might use 50-100%. In a downtrending market, I will limit my exposure with 25-50%. I'd like to add here that if I see a stock with awesome potential, ie: perfect pattern, low risk due to close support under the pivot point and huge spooling volume at time of breakout (3x daily average), I have used the full margin - 200% capital, even in downtrending markets.

This plan is a work in progress. Any suggestion would be greatly appreciated!

thanks for your interest
 
Hi jzlucas,

A friend of mine actually came up with a pattern based on your "plan B". He calls it CBP - continuation buy pattern (the mans a genius huh). Anyway - This CBP works pretty well.

What he looks for is a stock to pause a moment from its uptrend. He uses the 50MA and the 20MA as signals. The set up is when the 50MA is trending up, while the 20MA has rounded over and is heading down. Volume must look to be drying up in this pause. The pattern basically forms a flag, so you buy on the breakout above the flags upper trendline. It usually breakouts out on increased volume, although I've seen it breakout on weak volume, only to show monster volume the next day, which of course, I missed out on, because I only buy stocks on increasing volume.

This problem I have is that you have to work through overhead, which raises the risk level of this pattern. I hate overhead and try to avoid it at all cost.
 
Quote from smashandgrab:

Hi jzlucas,

A friend of mine actually came up with a pattern based on your "plan B". He calls it CBP - continuation buy pattern (the mans a genius huh). Anyway - This CBP works pretty well.

What he looks for is a stock to pause a moment from its uptrend. He uses the 50MA and the 20MA as signals. The set up is when the 50MA is trending up, while the 20MA has rounded over and is heading down. Volume must look to be drying up in this pause. The pattern basically forms a flag, so you buy on the breakout above the flags upper trendline. It usually breakouts out on increased volume, although I've seen it breakout on weak volume, only to show monster volume the next day, which of course, I missed out on, because I only buy stocks on increasing volume.

This problem I have is that you have to work through overhead, which raises the risk level of this pattern. I hate overhead and try to avoid it at all cost.
More...
Nothing wrong w/ your friends method!
 
Quote from smashandgrab:

Hi jzlucas,

A friend of mine actually came up with a pattern based on your "plan B". He calls it CBP - continuation buy pattern (the mans a genius huh). Anyway - This CBP works pretty well.

What he looks for is a stock to pause a moment from its uptrend. He uses the 50MA and the 20MA as signals. The set up is when the 50MA is trending up, while the 20MA has rounded over and is heading down. Volume must look to be drying up in this pause. The pattern basically forms a flag, so you buy on the breakout above the flags upper trendline. It usually breakouts out on increased volume, although I've seen it breakout on weak volume, only to show monster volume the next day, which of course, I missed out on, because I only buy stocks on increasing volume.

This problem I have is that you have to work through overhead, which raises the risk level of this pattern. I hate overhead and try to avoid it at all cost.
More...

So, if I might offer another way of stating the above...

He buys on support levels in upward trend channels.

The above could of course be tested in any number of ways, but according to your friend's testament he looks for 20-day and 50-day MA convergence followed by what I would hope would be a suggestion of divergence on volume before the buy.

I follow a similar strategy.
 
Quote from smashandgrab:



In a good market uptrend, I try to use 100-200% of my trading capital. In a sideways market, I might use 50-100%. In a downtrending market, I will limit my exposure with 25-50%. I'd like to add here that if I see a stock with awesome potential, ie: perfect pattern, low risk due to close support under the pivot point and huge spooling volume at time of breakout (3x daily average), I have used the full margin - 200% capital, even in downtrending markets.
More...

How many positions can you hold/follow at one time? The reason I ask is that with a limited account I am only able to hold a max of 5 positions. I usually have a watchlist of 10 or more stocks. It must be one of "Murphy's Laws" but it seems that the positions I enter don't do half as well as the ones I miss.
 
Hi Boib,

I generally only hold one position at a time. I usually load up and follow the stock minute by minute until I have a safe stop in above break even point. After that, I kind of relax and let the trading platform do its job (medved quotetracker). When an alert is triggered, I refocus on the action. Lately though, I haven't been it the stock long enough to "sit back and relax". See below!


Good Afternoon All,

I'm pretty bummed. I missed an opportunity on ALO today. As the market opened and the alerts were triggered, ALO caught my attention. As I was ready to buy at $31.18, I was distracted by someone for a moment and missed my entry. As I watched the volume spooling up before the triggered alert, I had actually thought of buying even before it reached it's pivot. I decided to exercise discipline and wait. Oh well, these things happen.

Having missed my time, I decided not to let disappointment dull my senses (I have a job to do that for me), so I paper traded instead. I watched the stock climb to 31.55/ask. Seeing that I needed to drive to another part of the state shortly, I felt that that would have been enough profit for the day, so I mentally closed the trade at 31.51/bid. I had 1000 shares loaded into my browser at the time of the missed entry, so I figured I would have made approximately $330 -$10 = $320 ($10 for round trip commission). As I stated earlier, I'm working with $10 grand but have more in reserve. I was going to use some of the reserve to round up to 1000 shares (something I do only occasionally). This would have been a 3.2% gain on the $10,000 (slightly skewed viewpoint, I'll admit).

The key here is to take profit. I'm looking for 1% a week. If I can bank 2-3% quickly, I'll do that and satisfy the quota for the next 2-3 weeks - All in about 5 minutes. I can then sit back and be more selective.

I've attached a jpg of ALO. It's pretty crude. The actual screen dump I took this morning got lost in my emails at work, so this crude one will have to suffice. There are lines showing the entry and exit points, along with the total span of the trade.

This is how I make money. I'd love to make more - Any suggestions?
 
Hi jzlucas and chadwick,

You both are correct. The CBP works. I just don't use it that often because I'm always worried about overhead (something I picked up from the bear market). There are times though that a stock will exhibit a perfect CBP that I just can't ignore.

How do you guys play it. Could you give me some details? Maybe with some good info, I'd feel better about using it.

thanks for your reply
 
Quote from smashandgrab:





Having missed my time, I decided not to let disappointment dull my senses (I have a job to do that for me), so I paper traded instead. I watched the stock climb to 31.55/ask. Seeing that I needed to drive to another part of the state shortly, I felt that that would have been enough profit for the day, so I mentally closed the trade at 31.51/bid. I had 1000 shares loaded into my browser at the time of the missed entry, so I figured I would have made approximately $330 -$10 = $320 ($10 for round trip commission). As I stated earlier, I'm working with $10 grand but have more in reserve. I was going to use some of the reserve to round up to 1000 shares (something I do only occasionally). This would have been a 3.2% gain on the $10,000 (slightly skewed viewpoint, I'll admit).

More...

You will find that when you have real money on the table many different emotions will kick in.

With todays paper trade you probably wouldn't have been filled at your price as less than 1000 shares traded at 31.18 the next fill was at 31.25. Also less than 1000 traded at 31.51. Had you put a limit order in you may not have been filled and by the time you cancelled it and wrote another order it may have been too late.

Not trying to rain on your parade, just experiences I have had. Without level2 and a direct access broker you will give up a lot in slippage.

Its tough to get out in a hurry when a stock is tanking. Limit orders don't fill and market orders will get filled below where you think they should. :mad:
 
Hello biod,

My apologies for displaying thrash. I knew I shouldn't have put up a paper trade, but wanted to show something relative to the stock list I just posted. Without an actual trade, I guess the data is without weight. I'll refrain from showing worthless data in the future.

As for level II, I tried to use it in the past (when I first started), but had trouble following the data listed on it along with the streaming quotes I was following. There was just too much data to follow and learn at the same time, so I eliminated the level II. It sure wouldn't hurt to learn something new. Do you know where I could read up on it's display and usage?

I currently don't use a direct access broker. Could you recommend one?

By the way, I have a good example of what I've been doing for 3 years now. The stock is BMD, traded back in December '05 (only data I have on recent trades on my home computer). This is typical of the day trading plan. Quick in and out for 2% approx. As I said in my first post, I'm averaging 40% per year (actual money, no paper trading). I'm hoping to improve on that 40% with the help of others.

thanks for your reply
 

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