I think you are on the right track, but instead of asking for opinions, you should do some serious backtesting. I think you will find that your approach will not make money, as stochastics gets whipsawed way too much if you are using it as an entry signal. The proper way to use it is to wait for a divergence, then enter on the break of a trendline. I think a 2 point stop is too tight, particualrly trading off the 15/60 charts. It is tight trading off the one minute. You will make more money holding overnight if your entries are good, but you also expose yourself to gap openings that can put you in deep trouble. I would not hold a trade over unless it is well in profit. And have a plan in place to deal with a gap against you, as it can cause you to freeze. Good luck.
Day Trading Aint Easy
- Thread starter Buckeye
- Start date
I think you are on the right track, but instead of asking for opinions, you should do some serious backtesting. I think you will find that your approach will not make money, as stochastics gets whipsawed way too much if you are using it as an entry signal. The proper way to use it is to wait for a divergence, then enter on the break of a trendline. I think a 2 point stop is too tight, particualrly trading off the 15/60 charts. It is tight trading off the one minute. You will make more money holding overnight if your entries are good, but you also expose yourself to gap openings that can put you in deep trouble. I would not hold a trade over unless it is well in profit. And have a plan in place to deal with a gap against you, as it can cause you to freeze. Good luck.
I think it's really difficult to trade off mechanical signals these days -- especially since characteristics of each trading day are so different. So many factors affect how the market moves that I would find it impossible to put faith into one single technical indicator.
These are just some recent thoughts that influence my trading:
-- If the market's come down 4 days in a row into month end . . .
-- If volume is barely going to make 70% of daily average on a Friday before 3-day weekend, and market starts to break out/down from a widely recognized technical formation. . .
-- If five analysts come out and downgrade the semiconductor sector and the stocks open and stay little changed . . .
etc -- these kinds of qualitative judgements can't be quantified, and all just fall under the category of gut feel in the end. Ultimately however, even if you do trade on "intuition" or other discretionary means, always keep the stops hard and fast -- I think using discretionary entries and mechanical exits works fine.
ps -- all that said, I actually have been trading the NQ's this week using a single divergence indicator (one stock, actually) and it's been working great. I'm targeting 2% a day on my 6k account, so I figured I'm on track for my one year target of 800k or so.
:eek: 
These are just some recent thoughts that influence my trading:
-- If the market's come down 4 days in a row into month end . . .
-- If volume is barely going to make 70% of daily average on a Friday before 3-day weekend, and market starts to break out/down from a widely recognized technical formation. . .
-- If five analysts come out and downgrade the semiconductor sector and the stocks open and stay little changed . . .
etc -- these kinds of qualitative judgements can't be quantified, and all just fall under the category of gut feel in the end. Ultimately however, even if you do trade on "intuition" or other discretionary means, always keep the stops hard and fast -- I think using discretionary entries and mechanical exits works fine.
ps -- all that said, I actually have been trading the NQ's this week using a single divergence indicator (one stock, actually) and it's been working great. I'm targeting 2% a day on my 6k account, so I figured I'm on track for my one year target of 800k or so.
:eek: I agree that swing trading is the way to go, because the market is so illiquid and whipsawing that is is better with a bigger target and a little more time for traders to successfully test their methods. It is also less stressful!
Backtesting is not worth much just because of the constant market changes, in my view anyhow.
hey what do you know, vinny gigante is promoting shortboy.com.
I agree. Day trading often betrays you. The trend is your friend. But the trend also changes direction. I got burned many times with daytrading. I joined longbull.com a few weeks ago and am doing much better now. The great thing about daytrading is that your account is all cash a the end of the day and at least worth something. I prefer having $35K in the account to having 1000 shares of CSCO.
Cash is king.