Sunday, January 29, 2017
Wednesday, January 25, 2017
SCREW YOUR INTRADAY CHART!
One of the main things I always preach about with trading is, that its all about the DAILY. If you think you can short cut things in the market, you are dead, dead wrong. The key is always to align on multiple time frames. Look at the daily chart and form your bias. If a stock is in an intermediate & long term up trend, do you think it is wise to go short when the stock is on support after pulling back for a few days?
If you think you have a great trading opportunity just because you have a nice intraday pattern, well you could be right, but that depends on the daily. Your intraday chart means squat by itself. Trading, whether its day-trading or swing-trading, is dependent on building a case. The more "evidence" to take a trade the better. Your "evidence" of the intraday (5 minute, 3 minute, 1 minute, whatever you use) is just as good as a murder case without the murder weapon. You need that extra evidence to even make a case in the court of law. If you try to make a case without the murder weapon, you will lose the case. Same goes with trading.
When I take a day-trade now I always ask myself, would I swing trade this. If the answer is yes, I will look to take the trade. Pretty simple stuff. Wait for the daily to set-up. Look for an intraday pattern. Take the trade.
Here is a simple flow chart I use to help decide if I should take a trade:
Still think you can get away with just trading the intraday pattern? Well I have an example for you.
Everything looks great on this bear flag right??!??
Sorry you are mistaken.
Always remember. DAILY DAILY DAILY. Would I swing this chart?
If you think you have a great trading opportunity just because you have a nice intraday pattern, well you could be right, but that depends on the daily. Your intraday chart means squat by itself. Trading, whether its day-trading or swing-trading, is dependent on building a case. The more "evidence" to take a trade the better. Your "evidence" of the intraday (5 minute, 3 minute, 1 minute, whatever you use) is just as good as a murder case without the murder weapon. You need that extra evidence to even make a case in the court of law. If you try to make a case without the murder weapon, you will lose the case. Same goes with trading.
When I take a day-trade now I always ask myself, would I swing trade this. If the answer is yes, I will look to take the trade. Pretty simple stuff. Wait for the daily to set-up. Look for an intraday pattern. Take the trade.
Here is a simple flow chart I use to help decide if I should take a trade:
Still think you can get away with just trading the intraday pattern? Well I have an example for you.
Everything looks great on this bear flag right??!??
Sorry you are mistaken.
Always remember. DAILY DAILY DAILY. Would I swing this chart?
Monday, January 16, 2017
Tuesday, January 10, 2017
It's ALL about the Daily Chart
I've been in a swing trade of ACIA for the past 2 weeks. Before I get into what side I was on, long or short, lets take a look at the Daily chart entering today.
As I always do, I read before bed on stocks I am interested in. Every tweet that I saw was saying how bullish this candle was yesterday. They went on and on about how great of a value it was at these levels and an easy $75-80 target. As I was closing my eyes, I began to see it popping 3 dollars in the first 30 minutes the next day. Of course I couldn't sleep because I have a healthy short position.
I got to my office as I do every morning, with my resistance and support lines already drawn and checked things out. Here is what I saw on a more zoomed up level, 30 minute chart.
All that I saw was the stock building underneath a previous breakdown level. If you have read any of my previous articles, trending stocks build blocks. If its uptrending, the blocks build on top of each other. If it is downtrending, the blocks build under each other. So with my bias intact, I let the market open. Below is the first 2, 5 minute candles of todays action.
To all my bad dreams from last night and all the tweets that I read, I immediately called bull shit. Lets short this thing.
Why was my thinking this? Didn't it break above a previous resistance? Well yes it did, but it was weak. If it had power it would have shot up with much more force than it did. Why did it not have the power? The DAILY chart. The DAILY chart was in a steady downtrend and building underneath levels. This quick pop up and fail is confirmation that there is resistance above.
So what do you do? You short this failure. Now mind you, I did not think this was going to have this much power to the downside as it did today. My original day trade short was only a scalp. But the point is your DAILY chart is the most important thing when it comes to trading. Do not get sucked into false breakouts when the trend says otherwise. Go with the trend, it is your friend.
As I always do, I read before bed on stocks I am interested in. Every tweet that I saw was saying how bullish this candle was yesterday. They went on and on about how great of a value it was at these levels and an easy $75-80 target. As I was closing my eyes, I began to see it popping 3 dollars in the first 30 minutes the next day. Of course I couldn't sleep because I have a healthy short position.
I got to my office as I do every morning, with my resistance and support lines already drawn and checked things out. Here is what I saw on a more zoomed up level, 30 minute chart.
All that I saw was the stock building underneath a previous breakdown level. If you have read any of my previous articles, trending stocks build blocks. If its uptrending, the blocks build on top of each other. If it is downtrending, the blocks build under each other. So with my bias intact, I let the market open. Below is the first 2, 5 minute candles of todays action.
To all my bad dreams from last night and all the tweets that I read, I immediately called bull shit. Lets short this thing.
Why was my thinking this? Didn't it break above a previous resistance? Well yes it did, but it was weak. If it had power it would have shot up with much more force than it did. Why did it not have the power? The DAILY chart. The DAILY chart was in a steady downtrend and building underneath levels. This quick pop up and fail is confirmation that there is resistance above.
So what do you do? You short this failure. Now mind you, I did not think this was going to have this much power to the downside as it did today. My original day trade short was only a scalp. But the point is your DAILY chart is the most important thing when it comes to trading. Do not get sucked into false breakouts when the trend says otherwise. Go with the trend, it is your friend.
Tuesday, December 13, 2016
Tuesday, October 4, 2016
Room on a Chart & Building Blocks
NUGT, gold, DUST, whatever trading vehicle you wanted to use to trade gold today, trended perfectly the entire day. What do I mean by that? Every bounce was faded and it continued to trend down the entire day. Take a look at the example from above. There were numerous opportunities, with small risk, to trade in it today. What makes this different than a stock that didn't trend perfectly all day? Let's take a look at the daily chart.
First thing to notice is that for the past month and a half, NUGT formed a bottom, right around the $17.50 area. Second thing, it gapped below this range to begin the day. Third thing, Look at all the room below this range. It had the room to move and trend properly. All these things together brings the perfect storm for an all day trender.
BUILDING BLOCKS
I like to look at stocks as building blocks. Of course they need to have the room to move to trend properly and build these blocks. But lets show an example of what I mean.
In this example, you can see how NUGT trended today. each flag or block was building underneath the previous block. Looking at stocks as blocks has simplified things for me. If you are in a trending stock, the blocks should be building on top of each other in an uptrend and building below each other in a downtrend.
Watch-list 10/5/2016
Market continues to chop around between the 50 day and 100 day moving averages. Looks like a bear flag for now. Gold broke down today, every bounce was faded. That run appears to be over for now. Through my scans, I did notice a lot of healthy breakouts. Interestingly enough, I also saw quite a few breakdowns including some biotech and material names.
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