Simple but effective short term trading setups for amateurs

I am an amateur trader in the sense I like to trade whenever time permits. I prefer day trading or swing trading styles. However, I am not able to hit at proper trading set ups with entry and exit rules that may consistently yield positive results. Please help me in locating a simple set up.....

imho trading is not a hobby or something to be done whenever time permits.
if you don't have the resources and dedication to devote sufficient screen time and also to develop your own method through the painful lessons the market will inflict, then you might as well throw your money into the Ganges

yes...daytrading not a hobby...there is nothing simple/Holy Grail for technical trading, sorry

however I have a suggestion.

Measure "cycles" within whatever market you are interested in. You might want to start with the NASDAQ and DOW indexes, going back 5 or 10 years. Look at daily bars, then 10 minute bars. You will definitely notice some interesting patterns emerge on the ten minute bars on the Dow.

Anything written by John Murphy is helpful regarding technical analysis; Wiki has some good (but limited) stuff on technical analysis.

Some terms that you should understand when measuring cycles are :
retracement
retracement percentage
support
resistance
time
price
trendline

Try to find cycles that feature a 100% retracement of a previous Low, or 100% retracement of a previous High.

Then, all cycles within THAT cycle are 'partial retracements' -- look for 50% retracements and 110% retracements (a slightly higher high, or a slightly lower low of the previous cycle).

Measure timeframes of cycles, intraday, multi-day, or month/multi-month.

Uptrends feature cycle lows that have a common upward tilt (trendlines) -- when the uptrend line is repeatedly violated that is a warning that maybe the party is over; or if the uptrend no longer creates higher highs, now good time to take profits. Reverse the methodology for downtrends.

here's a link to something John Murphy wrote "ten laws of technical trading"
Very basic, but extremely useful in focusing your learning.

John Murphy's Ten Laws of Technical Trading - StockCharts.com

You can PM me for other info if this wets your appetite

The Mechanical Day Trader

astraura said:

I am an amateur trader in the sense I like to trade whenever time permits. I prefer day trading or swing trading styles. However, I am not able to hit at proper trading set ups with entry and exit rules that may consistently yield positive results. Please help me in locating a simple set up.....

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Phil Newtons thread shows breakouts of previous days ranges.
he has posted several consecutive days worth of videos showing a consistent method.

Captain Currency has his 3-Ducks.
trader-dante has his pin-bar patterns.

Phil Newtons method are quite good as you define your set-ups at the beginning of the day.

There is also a thread by nkruger/options about trading divergences on the DAX (although I believe nkruger has changed his set-up since)

try them, all for free, before deciding whether you want to pay for any course or mentoring.
good luck.

my shorthand list of websites to check daily & gauge market sentiment

according to Bloomberg News:
Bear Markets

All of the 23 developed nations in the MSCI World Index except for Canada have experienced bear-market plunges of 20 percent or more since September. Among the 25 developing countries in the MSCI Emerging Markets Index, only Jordan and Morocco avoided such slumps.

recommended news sites you should check daily before trading are:

Bloomberg.com: News
MarketWatch.com: Stock Market Quotes - Business News - Financial News
Briefing.com: Economic Calendar

I would not listen to any of the anchors on CNBC for trading sentiment, they are either ignorant or biased, imo. Rick Santelli is pretty good, however, his ego is HUGE. Art Cashen is excellent for overall market sentiment, imo.

DO pay attention to their guests generally between 7:30 am and 9 am You can catch video highlights.

Overall, I would be short US markets until well into next year; the fundamentals long term are horrible for equity indexes as far as the eye can see.

Overall, your bias is to sell - imo - so look for those trade setups from the recommended list above and see how accurate they are. In the futures market during a Bear Market - intraday highs are most always used to short at R2 or R3 -- then watch for daily lows to be tested or violated. As long as this happens, futures traders keep shorting aggressively.

When Dow Daily Lows are consistently 50+ points higher than previous days, on a 5 day basis, then you would consider a bias to the long side. Consult the daily chart for near term resistance reversals back down.

......time to trade now...

Regards,

The Mechanical Day Trader...

There are some basic and simple setups at Trading Setups Review

Take a look!

jingliang said:

There are some basic and simple setups at Trading Setups Review

Take a look!

Click to expand...

Just what a newbie should look at

astraura said:

I am an amateur trader in the sense I like to trade whenever time permits. I prefer day trading or swing trading styles. However, I am not able to hit at proper trading set ups with entry and exit rules that may consistently yield positive results. Please help me in locating a simple set up.....

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Sorry A but the words "Amateur" and "Trading" combined mean one thing....losses

Theres a new saying on the hip TV and music shows now that sums up the best way to approach an education in Trading

"Go hard or go Home"....

N

Keep it simple would be my advice.
Learn how to spot a trending market. If the market is falling, look for opportunties to sell (a pull back).
Be prepared to make many losing trades and think about trading of 4 hour charts rather than 5 or 15 minute charts.
You need time to think, and your execution needs to be calm.
Have a trading plan, a checklist, keep a diary and stare at charts for hours on end.
Do all of that and you may just make it !!!

Good luck

I would dvise you to create a sample portfolio with good tickers like BIDU, AKAM, SINA, CREE etc.,follow the trends and identify what is causing up/down or side ways movement for the stocks. some of these stocks are wild animals and with a small news, small momentum in the market, some of these stocks run like hell. My advise is to keep it simple and keep learning. create paper money accounts and hop in when you are redy.

Identify the market: Is it trending, ranging, or entering a pullback?

For a start don't try to trade against the market.

Wow almost exactly 9 years old... Wonder what astraura had learned since then...

MikePearson said:

Identify the market: Is it trending, ranging, or entering a pullback?

For a start don't try to trade against the market.

Click to expand...

I sometimes find its doing all three, and then I go against the market

Quantt said:

Wow almost exactly 9 years old... Wonder what astraura had learned since then...

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yeah its died and resurrected twice