Market continues to digest and grind sideways after coming out of a 2 year range. Plenty of opportunities in individual names. Small cap and spec plays have been running wild as of late OPTT, GBR, SPU to name a few.
Sunday, July 31, 2016
Watch-list 8/1/2016
Market continues to digest and grind sideways after coming out of a 2 year range. Plenty of opportunities in individual names. Small cap and spec plays have been running wild as of late OPTT, GBR, SPU to name a few.
Thursday, July 28, 2016
How to scale in and build your position.
When I am scanning for stocks to day trade, I look for several things. But the biggest and most important in my mind is, a stock has to have room to move. If it is stuck in a range, the stock isn't going to have the space or ability to trend properly. In order for the stock to move the way we want it to, and give us patterns to trade, it NEEDS to be coming out of a range with room to go.
With this comes the main subject of this post: Scaling in and how to build your position. A few examples to go over. FB from 7/28/2016 and EXAS from 7/26/2016
EXAS on 7/26/2016 had an earnings beat which prompted the stock to gap up. This gapped up to the $14.50 which we can see was at a supply free zone on the chart. This had room to its gap fill of $17.46 and believe it or not the high for this day was $17.47. So my thought for the day on this was it could be a nice long with room to run towards its gap.
So first thing we notice, during the first 10 minutes of the day was impressive strength. The stock moved over a dollar. Now I am waiting for a pullback to get a low risk entry. So I waited and within a few minutes I had a pullback to VWAP which allowed me to take an entry at $15.52. Within 20 minutes it made a nice 80 cent move so I took some profit into the push. Next came another pullback to again, the VWAP. The bottom of this candle was $15.59, so I was able to add more to the position with a stop right under $15.59. What do we notice with my new stop? It is higher and my original shares had a break-even/small profit stop. This allowed me to be more flexible with my add and also trade relaxed because worse case scenario, I would walk away with a small profit or break-even on the trade.
FB today beat earnings and had a nice gap up to 128. The stock was selling off since its after hours high of 133.91. My thought into the day was this could have a nice short. Why, because it had open space to down trend towards it open gap.
On an intraday basis, here is how it turned out. There were several opportunities and trades in this chart today. With each pattern you can re-add and adjust your stops. If you are trading around a core position this makes things nice and easy. Because each bear flag is lower and your new stop is adjusted making your original shares a stop out with profit should things go against you.
As you can see from these 2 examples, this can help you really catch a big move and get a nice chunk out of it for big gains. Each flag or pullback re-defines your stop which lessens your previous risk, allowing you to scale in and out of the position to soak in as much gains as possible. Hope this is helpful. Happy trading!
With this comes the main subject of this post: Scaling in and how to build your position. A few examples to go over. FB from 7/28/2016 and EXAS from 7/26/2016
EXAS on 7/26/2016 had an earnings beat which prompted the stock to gap up. This gapped up to the $14.50 which we can see was at a supply free zone on the chart. This had room to its gap fill of $17.46 and believe it or not the high for this day was $17.47. So my thought for the day on this was it could be a nice long with room to run towards its gap.
So first thing we notice, during the first 10 minutes of the day was impressive strength. The stock moved over a dollar. Now I am waiting for a pullback to get a low risk entry. So I waited and within a few minutes I had a pullback to VWAP which allowed me to take an entry at $15.52. Within 20 minutes it made a nice 80 cent move so I took some profit into the push. Next came another pullback to again, the VWAP. The bottom of this candle was $15.59, so I was able to add more to the position with a stop right under $15.59. What do we notice with my new stop? It is higher and my original shares had a break-even/small profit stop. This allowed me to be more flexible with my add and also trade relaxed because worse case scenario, I would walk away with a small profit or break-even on the trade.
FB today beat earnings and had a nice gap up to 128. The stock was selling off since its after hours high of 133.91. My thought into the day was this could have a nice short. Why, because it had open space to down trend towards it open gap.
On an intraday basis, here is how it turned out. There were several opportunities and trades in this chart today. With each pattern you can re-add and adjust your stops. If you are trading around a core position this makes things nice and easy. Because each bear flag is lower and your new stop is adjusted making your original shares a stop out with profit should things go against you.
As you can see from these 2 examples, this can help you really catch a big move and get a nice chunk out of it for big gains. Each flag or pullback re-defines your stop which lessens your previous risk, allowing you to scale in and out of the position to soak in as much gains as possible. Hope this is helpful. Happy trading!
Tuesday, July 19, 2016
Tuesday, July 5, 2016
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