Thursday, January 25, 2007

Technical Trade Idea - Broadcom Corp. (NASDAQ: BRCM)

Click on chart to enlarge

BRCM
- next earnings release Feb. 8th.

Today's tag of the broken lower channel line was a prime opportunity to short BRCM. If it can take out this week's low, the next target will be $27.00.

3 comments:

Anonymous said...

Hello jamie. I have about $250K saved up and I have a pretty good understanding of day trading and I plan on using the dummy trading as my primary vehicle for trading. having done a lot of backtesting and paper trading, i feel fairly ready to jump in. Now, my question to you is: I pay $20 per 1000 shares. Is that too much for the account and the size of the account and this type of trading? I plan on making 1-3 trades on average a day. I also plan on using the 30 minute bars as i noticed produces a lot less noise on the charts. Your thoughts would very much appreciate it and I do understand that you aren;t giving me investment advise, just your opinion. thanks!

Alex.

Jamie said...

Congrats Alex,

Sounds like you've invested a lot of time in putting together your trading business plan. I'm also impressed that you are asking advice about the trading platform. So many people just jump in, without doing their homework and then find out that they have parked their account in the wrong place.

I strongly suggest that use a direct access broker for execution. Not only will you save money on commissions, but you will get much better executions. For example, if you are trying to short a stock intraday on a flag break, you won't get a very good fill unless you use direct access. I use Interactive Brokers' Smart routing system and I have no complaints. My commissions are $0.005 per share and it costs me $10.00 for a round trip on 1,000 shares. I often scale in out of a position and I'm not penalized by fixed minimum commission rates. I used to trade through Schwab and Etrade. My switch to IB was very liberating and I highly recommend it.

I would also recommend that you track your trade setups on multiple timeframes. I use 5, 10, 15, 30 and 60 minute charts. If the setup gets a pass on all of those time frames, I step up to the plate. The 15 minute chart is my primary timeframe, but sometimes the market is moving too fast and I need to trade off the shorter timeframe.

Good Trading!

Prospectus said...

Alex: My unsolicited $0.02 are to go to Trader Mike's and read all of his position sizing and expectancy articles. If you re only talking commissions, then I second Jamie's advice. :)