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
Monday, June 20, 2016
Watch-list 6/21/2016
Market had a nice gap up and spent most of the day selling off. It got up to the 2100 level which is now resistance. Janet Yellen speaks tomorrow at 10AM so she could cause some volatility.
Monday, June 13, 2016
What makes a stock explode?
When I first started trading, I would look at the end of the day and see a huge 20%, 30% + mover and think how did that happen? Why did the stock I traded move 1% and I was only able to scalp for say 30 cents. What in the world was I missing? Was it just the luck of the draw or was there something more.
To sum up what my thinking was during my begninng times of trading, I wanted to simplify everything. So I solely focused on intraday patterns. Which as I have learned might be the biggest mistake you can make. What I always stress to other traders that I talk to is that you need a chart with the most room to move. Traders should know stocks move from support to support and resistance to resistance etc.
How do you find the stocks that have the room to move? Well, what I do is look at the daily chart, then the 30 minute chart to find the important areas of resistance. Then I look for an intraday pattern to get into a stock.
Lets take a look at UVXY. A 30% mover from today.
This was the Daily chart entering today. what do we see over the line that is drawn. We have a pretty big area of open space. Lets look a bit closer at the 30 minute chart.
Again we can see quite an open space over the $12 area. Each line I drew represented some form of resistance that it "could" have been rejected at.
On an intraday chart you can see it was pretty much a perfect trender all day. It gapped up over the key 12 dollar area, consolidated for the first 2 hours of the day and ran to $14. During lunch time it flagged and continued to build on top of support. From then on, every flag or dip was buyable. And the reason for this? It had the room to move and was trending. When I use the word trending that means a stock breaks a resistance, flags and holds its break out area. This is the art of trend trading. Dips and pullbacks get bought and you have awesome risk/reward.
Next time you are wondering why the stock you traded barley moved and you were only able to scalp for 25-30 cents, zoom out. I'm willing to bet the stock had overhead resistance and did not have the room to trend.
To sum up what my thinking was during my begninng times of trading, I wanted to simplify everything. So I solely focused on intraday patterns. Which as I have learned might be the biggest mistake you can make. What I always stress to other traders that I talk to is that you need a chart with the most room to move. Traders should know stocks move from support to support and resistance to resistance etc.
How do you find the stocks that have the room to move? Well, what I do is look at the daily chart, then the 30 minute chart to find the important areas of resistance. Then I look for an intraday pattern to get into a stock.
Lets take a look at UVXY. A 30% mover from today.
This was the Daily chart entering today. what do we see over the line that is drawn. We have a pretty big area of open space. Lets look a bit closer at the 30 minute chart.
Again we can see quite an open space over the $12 area. Each line I drew represented some form of resistance that it "could" have been rejected at.
On an intraday chart you can see it was pretty much a perfect trender all day. It gapped up over the key 12 dollar area, consolidated for the first 2 hours of the day and ran to $14. During lunch time it flagged and continued to build on top of support. From then on, every flag or dip was buyable. And the reason for this? It had the room to move and was trending. When I use the word trending that means a stock breaks a resistance, flags and holds its break out area. This is the art of trend trading. Dips and pullbacks get bought and you have awesome risk/reward.
Next time you are wondering why the stock you traded barley moved and you were only able to scalp for 25-30 cents, zoom out. I'm willing to bet the stock had overhead resistance and did not have the room to trend.
Sunday, June 5, 2016
In case you missed it, Gold had a pretty impressive gap up on Friday morning. NUGT was up about 17% by the opening bell and by 10:30 was up about 27%. I was quite surprised by the move. But I was never looking for a short in NUGT or long in DUST (the inverse of NUGT) because trend never changed. The entire day Gold just flagged out and had a beautiful day long flag. As soon as the 20ema finally caught up, it was able to get the momentum to finally break the highs of the day. NUGT amazingly went to $100 right before the end of the day.
I was originally in DUST from 11am. It took all day for it to flag out. As soon as I saw DUST hold its 20ema, I knew this flag was going to break down, and I now had a new wick to base my risk and stop off of.
Above is how I traded it. Original add was at 12.46 added more at 12.27 and covered my last shares at 11.61. It seemed tired and tried to break out so I figured the run in GOLD was over.
But as soon as I saw that it was a fake out I actually just longed NUGT on the flag break
These are the types of stocks that go on amazing runs.
Subscribe to:
Posts (Atom)