Lots of technical problems yesterday and I almost gave up, but I hate to be sidelined from trading. Basically, my Esignal could not load charts efficiently. The only charts I could access easily were the ones I had viewed in pre-market. That pretty much limited me to the Briefing.com gapper list.The first chart is the 15 minute chart of LEND which gapped up on news. At first it looked like a fade but LEND is not shortable through IB, so it's usually a waste of time. However, when I saw two NR inside bars at support of the rising 5 period ema, I saw $ signs. This is one of my favorite patterns ( similar to one of Trader-X's old bread and butter setups).
I took a dummy long on a break of the two bar base and booked a partial as price approached the ORH. I closed my position at PP resistance (blue line) which was very close to the 38% Fibonacci extension of the previous day to the ORH.
After a 50% retracement LEND carved out a hammer-like reversal bar and price started to move back up. I took a second entry as price broke above the PP. My target was $10.00 and I took a partial at the 75% extension because price was moving fast and was getting too far from the 5 ema. The $10.00 was reached on the next leg up.
The chart below is the same chart with AH trading. I nursed this chart all day long and it was a big winner. But notice the AH traders made more money in much less time.
FRPT, also from the Briefing.com gapper list, carved out a NR ascending base at the cusp of its PP resitance line.
NVDA looked like it might retrace back to the ORL, but it found support at the mid-morning swing low. The little green hammer foreshadowed a swing back up so I tightened the stop.
Despite the restrictions due to technical problems, I was able to find one momo setup and two decent trades from a very short list of gappers. A good exercise for paper traders if you're so inclined. Try it for one day and see what happens.
9 comments:
Jamie,
Nice job on a relatively tough day. I found a small base break (downside at 121.50) in AAPL, bested viewed on 5min. It reversed but enough room for small profit.
When did you go full-time trading? Is the plan to remain full-time or are you between some contract work, etc.?
Jim,
Jack be nimble, Jack be quick. The AAPL trade set up nicely but the market decided to turned back up.
I came back to full time trading in March of this year. Not sure what the next move will be. I have trouble justifying doing this full time based on so few trades per day. If I could crank it up to 10-15 trades per day, I would be happy, but the 15 minute timeframe means that I usually trade only 2-4 setups per day. When I was working, I was often able to get in 1-2 setups per day.
In Canada we don't have the same margin rules for daytraders. I'm basically trading with all my own money. So it makes a difference if I have to start paying myself a paycheck at the same time trying to build my capital.
How about you? Are trading fulltime? Average trades per day?
Jamie,
Once again the Briefing list came in handy with 8 naz stocks >$8 and lend. That's all I need and was determined to trade just one stock and that was NVDA using 1,5 min charts with fibs, spt, rst lines. I traded from the 4th min ownward scalping long only ending up with 6 r/t and profiting 5.7% on my trading account. Most ever! For me focusing on one stock, say with news: nvda lend, keeps me focused on the twists and turns. Monday I'll put up 8 charts(2 screens 4 each)starting off with 1min x 1hr charts. I'll change it as the day moves on but the open has the action many days. I like to see them unfold with out scrolling...it becomes a blure. Another page with 2 charts(1,5 min) with the focus chart which I'll probably decide on before the market with longer term pivot points noted like you. And another with same but with watchlist scroll. LEND was the 15 min chart of the daybut you could have been profitable on any stock. Really incredible! Thanks for the blog work!.
Tom C. AAPL 6/15" IB hammer looked good too!
Every stock has it's own time frame but Trader X has made a good point of using 15" charts. Using 15" on NVDA I would have more than made with LEND.
BL,
I see what you did there with NVDA. As soon as price came back above PP support, you went long. Nice trade!
I agree that focusing on fewer charts, leads to more trading and less scanning and scrolling.
My technical problems yesterday forced me to focus on fewer charts and find reasonable setups on charts, I might have otherwise ignored, such as FRPT.
Jamie,
I am not full-time. I tend to trade 2-3 days per week, and part-time on those days. I usually find 1-3 trades/day. Sometimes I trade around multi-day swing trades, but not in the current market. Several years ago, I traded full-time for 1-2 years. At that time, full-time trading was tough for me to justify. Trading 2-3 days per week and studying the market on other days seems to be a good balance. It can take a long time to build capital and trading skill/maturity.
If you have a consistent track record, you could get capital through a proprietary trading firm. A typical split of profit might be 80/20 or 90/10 (higher % to you). I am not sure about availability in Canada.
BL,
Yes, AAPL 6th 15m would have been a great long entry. I am not great at reversing, especially on a gap down trading near ORL. Can you clarify your comment "Using 15m on NVDA I would have more than made with LEND", as NVDA was in a trading range most of the day? Thanks.
Jim C(sorry),
What meant to say was: "Using 15m on LEND I would have been much more profitable than scalping or using 15" charts on NVDA." But I decided to trade 1 stock at the open with out a 15" set up so I was blind to the rest of the setups for the most part. I am plane tired of scrolling for set ups and making 0. It has been very frustrating for me but honestly I really haven't just sat down in front of the computer with say the <12 naz stock premkt Briefing's list, put them on 3 pages and watched them unfold without scrolling thru another batch of 34 watchlist stocks. 1 out of the 8 premkt Briefing list was a perfect 15" chart to trade lend. All the others were tradable depending on how one defines it. I hunched that there would be alot of movement with NVDA with all the premkt vol and >$40, eps and announcemnt of 3:2 split. I felt uncomfortable with the subprime news stuff but it's the patterns that count. Don't mean to get on my soap box but convincing myself of what I see. Thanks.
Jim,
Agree, it takes a long time to build trading skills and discipline. I'm always looking to try something new. Also, have to adapt trading strategies for different types of markets as we have seen over the past few weeks.
I wish we had those types of prop firms in Canada, but unfortunately, we have the old fashioned types where everyone sits in one room and they keep you on a short leash.
I worked for one a few years back. It was basically a scalping firm played off of level II. Charts were secondary. They looked to make 10 cents over and over again. Not very helpful if you have ambitions of becoming a full-time trader like myself. The share of profits was much less advantageous as well.
Maybe one of the reasons we don't have more prop firms is because of our tight restrictions on daytrading margins. The other reason would be high taxes here in Quebec (highest in North America).
Jamie,
Referring to your comments on full-time trading, number of trades per day, and "...I usually trade only 2-4 setups per day." You probably know this, but here is my perspective:
You appear to have solid trading skills and a style that looks across a fairly broad range of patterns (TraderX gap setups, B&Bs, and PP plays) and finds good reward-to-risk ratios. Since you find (enough) trades everyday, you just need more capital to increase position size. Linda Raschke says the key to bigger profits is taking bigger positions in the same trades - not changing your style to find more trades. I don't know your typical pos size, but think about the (potential) profits if you could trade 5x or 10x your current size. Of course, that may require additional discipline/psychological skills to handle the size appropriately. Good Luck.
Jim,
Thanks, I admire Linda Raschke as a master trader and that theory is probably the key. I have been thinking about this for a while and hope to able to increase size slowly once the markets stabilize somewhat.
At the moment I have been reducing size due to data feed inefficiencies and broker platform glitches from increased volumes and volatility. Hopefully, things in this area will improve soon.
Good trading!
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