swing-day trading US stocks

Quote from ivica:

Hello,

I notice that lot’s of traders look success over percent gain in trade what have. I like to show one example what had last week and like to explain why I think that is not 100% correct.
For me main measure is risk/reward result. Those who follow this journal know that my first language is not English and I hope that will not be problem.
Example: lets say that I bought XYZ at $10 per share and I sold it at $11 per share. That is nice result, 10% and sounds great. However, for me important is how much risk I took on that trade. I think that every serious trader must have completely trading plan before will take any trade. That means entry, stop and possible target area. Of course target area is always questionable because depend on market and stock action after entry. Let’s back on example. If my stop was under $9 that mean s I risk $1 and got $1 gain and in that case risk/reward = 1.
From my experience with that risk/reward, you will very hard be successful trader and that is what all we want to be. Because of that, I always look for bigger reward then my risk. I can’t go dipper in that problem because I will need a lot of space to explain that here but I hope you all understand my point. Point is that good risk/reward trade will cover several negative trades and at the end that results with profit every month when we count our results.

Here is one live example what we had last week.
I bought AAPL at 05/07/2007. Entry price was 101.45 and stop was under 101. On entry chart you can see nice 60 min triangle. Triangle came after strong move up and gave us nice risk amount for move what we could get.
http://www.ivicacharts.com/diagrams/2007/05072007aapl.jpg AAPL entry chart

That was swing trade, because most of 60 min chart setups finish as swing trades and need several days to develop and see area what we like to see. With AAPL move up I was trail stop and I closed AAPL last Friday at 106.95. After touched 108 area I trail stop under 20sma on the 15 min chart and that was under 107. I didn’t want risk great reward what I already had.
Here is exit chart for AAPL.
http://www.ivicacharts.com/diagrams/2007/05112007aapl.jpg AAPL exit chart

Results are: with $0.45 risk, I got $5.50 gain and that mean risk/reward=12.22. That mean AAPL will cover 12 negative trades if I will use same risk in that trades. Of course, we can’t always count on that great reward but most of trades are above risk what I use and at the end that result with profit, what can see on tracking records what I post here in journal.

Hope you all understand what my point with this explanation was and if anyone will have any question feel free to ask.

Good luck
Ivica
More...
Just wanted to comment on this older post. Very good logic. Before i made some changes recently, I was losing money by not following such principles.

Even if I knew a stock would breakout I was settling for trades with a 1:1 R:W and this was leading me to poor results.

Very good way of putting it how one trade can cover 12 bad ones using such a philosophy.

Most of my entries are pullbacks so in most cases, I use a 2:1 initial reward to risk. I guess this means that as long as I am right more than 25% of the time, I will make money because 1 trade covers 2 bad ones.

Here's another question for you... what do you use to scan charts? I currently only trade interday so I use TC2000 and its cheap, but was wondering what you use for intraday setups.

Sometime close to the start of the next school year I wil be trading very closely to how you are now... so want to get a head start.
 
Hi,

I use Qcharts. For scanning, I use them too and after close, I go over all sectors manually to find what I like. I don’t watch stocks under 200k average volume and under $5 price because I'm not interested for penny stocks.
During trading hours I scan over % lists for strongest and weakest names, because I'm most interest on them.
Here is my scanning and trading screen. Maybe will help you to see how that look.

http://www.ivicacharts.com/diagrams/class/scanning screen.jpg

http://www.ivicacharts.com/diagrams/class/tradingscreen.jpg

Regards
Ivica
 
Watch list for 05/29/2007

LONG:

Swing possibilities (ST-PT)
ANPI long above: 7.07, stop under: 6.75, target: 8 areas
Next earning date: Aug 01, 2007 http://www.ivicacharts.com/diagrams/2007/05292007anpi.jpg

Watch ideas:

Long:
http://www.ivicacharts.com/diagrams/2007/05292007ctl.jpg http://www.ivicacharts.com/diagrams/2007/05292007goog.jpg

Short:
http://www.ivicacharts.com/diagrams/2007/05292007celg.jpg http://www.ivicacharts.com/diagrams/2007/05292007ggp.jpg

Good luck trading today!!!!
Ivica Juracic
 
Ivica, just discovering your wonderful journal here. Thanks a lot, I am much more of an investor in longer term holds but I would like to become a better trader and you have laid out so much of what it takes to be a better trader. Your comments regarding ONLY taking trades you're confident in and not overtrading are especially useful for someone like myself who loses when he overtrades.

Thanks and keep up the great work.

I noticed in an earlier trade that you were using manual scans to find stocks. Is that still true?
 
Quote from SiSePuede!:

Ivica, just discovering your wonderful journal here. Thanks a lot, I am much more of an investor in longer term holds but I would like to become a better trader and you have laid out so much of what it takes to be a better trader. Your comments regarding ONLY taking trades you're confident in and not overtrading are especially useful for someone like myself who loses when he overtrades.

Thanks and keep up the great work.

I noticed in an earlier trade that you were using manual scans to find stocks. Is that still true?
More...

Yes, that is true. I do all manually. I have some shortcuts, depends on day. However, every day I spend few hours with scanning. I trust only to myself. Had before scanning software, but it is closed now and I didn't what I like and what can be fast as I want.
Regards
Ivica
 
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