Best Thread US day traders thread.

[Mr. Charts]

I hope it turns out well for you and thanks for taking my comments in the positive way they were intended.
We have all made mistakes; what matters is recognition, acceptance and a better approach, never making the same mistake twice.
Best wishes,
Richard

 

[Mr. Charts]

If you end up in profit on this trade, as a psychologist I'm sure you'll remember the power of negative re-inforcement...................
Richard

 

[strewthmate]

I've edited the post since you last read it.

Cheers

If you end up in profit on this trade, as a psychologist I'm sure you'll remember the power of negative re-inforcement...................
Richard

 

[Mr. Charts]

Re-your further comments, strewthmate,
Yes I know I do come over a bit strong at times and that's easily mistaken for being opinionated, but after trading for a living full time for several years and lecturing and coaching for four years I do know what actually works and makes money in the real world day after day and I've seen all the mistakes people make so I try to steer them in the "right" direction, provided they are "steerable".
Richard.

 

[woolley]

thanks for all the above . there but for the grace of God etc etc ..

 

[Mr. Charts]

strewthmate,
Sorry to see you would have been stopped out :-(

tiramu,
This is the closest I can show you to a losing trade.
I shorted GILD, it went my way to begin with then started to bounce so I exited for a very tiny profit - still it wasn't a loss

Had a nice 75c trade in APOL which I'll post later - got to go, something possibly setting up

Richard

 

[samtron]

Confused?dotcom

I've just spent some time reading this thread, from the start!

I am relatively new to trading and have a couple or three general questions

1) I get the impression that Mr. Charts and Naz do not take a lot of notice of volume (and the charts posted in their examples do not show volume) so when Mr. Charts is referring to micro-analysis is that referring to buy/sell pressures as seen on L2?

2) As a newbie how would you spot "head fakes" on L2, which I have read, somewhere are common tricks played by the pros?

3) Being on the right side of the examples shown would have been great, but with most of the examples if the trader had got it wrong it could (with the fast movers) have be disastrous, especially if using margin?

4) The strategies and general philosophies running thru the thread appear to contradict the "normal" advice given about trading, (by well known and well respected authors like Dr Alex Elder) i.e. safety first, don't play wild stocks, only trade stocks you are familiar with etc etc.?

Please note the above is not meant in anyway to be critical of this excellent thread.

Any comments would be appreciated.

 

[Mr. Charts]

samtron,
1. By micro-analysis I mean reading buy/sell pressures on level 2, the behaviour of participants, market makers and ECNs, and reading the time and sales screen.
Volume does matter to me, but I can normally see that volume is about to build BEFORE it does by my reading of level 2 micro-analysis.

2. I teach people, amongst many other things, how to get a very good idea about whether a market maker is faking or not.

3. No, I disagree. When you know what you are doing the probability of getting it "wrong" is low. However when that does occur, as it did in my GILD trade today which you can see the broker screen of in post 315, I simply exit the trade. I only allow any losing trade to be very small and never let any loser run.
With direct access especially, you are in almost complete control as you manage your trade.

4. As for Elder, I read his book years ago and it's quite useful for beginners, but personally I don't think it's as brilliant as most people do. That's just my opinion. I feel it's too much indicator orientated and doesn't help anyone learn how to READ the market properly. Or UNDERSTAND it.
My own trading is safety first and that is embodied in every trade - for example I might have a stop loss or trailing stop but will normally exit long before those price points are hit; like with GILD this afternoon.
Trading what you describe as "wild" stocks comes with training and experience - plenty of experience - and I don't advise my students to trade the likes of GOOG until they really know what they are doing.
I also trade inside the spread quite often, buying on the bid and selling on the ask and thus capturing most of the spread. Obviously there is no point doing that on stocks with a 1 - 2 cent spread, but it's a different scenario with a 15 c spread.
I really do not know if Elder trades himself or not, but I assure you that most of the time the market does not behave in a classical "book" fashion.
HTH
Richard

PS Volume on stocks is often deceptive and cannot be relied upon in the classical way, although it is more reliable with some other trading instruments.

 

[Mr. Charts]

Now for that APOL trade.
Here was the short at the whole number with micro-analysis telling me it was virtually certain to go down.
Had it not done so I would have been out for an absolute maximum of a 5c - 8c loss because I was watching level 2 very closely for the first hint of a reversal.

 

[Mr. Charts]

...and here is the exit, again on micro-analysis telling me the selling pressure was abating.
It went on to touch 66.20 and then bounced.
My trades were at 67 short and covered at 66.25
for a 75c profit.

For a beginner gaining hands on trading experience and just 100 shares that would have been $75 with a risk of $5-$8.

For anyone trading 1000 shares that's $750

Again I personally don't think that type of trade is difficult, though many people find letting their profits run until they get an exit signal takes a bit of practice.

Richard

 

[jimmy2]

Hi Mr C,

I was wondering whether you incorporate any of the following in your analysis when timing your trades:

nasdaq or s&p futures
sector strength/weakness
NYSE or Nasdaq Trin
NYSE or Nasdaq TICK

On another matter I find it difficult pulling the trigger following several losing trades in a row (even though the losses are very small). Did you have a similar experience early on in your career and if so how did you overcome this temporary loss in confidence ?

Thanks
Jimmy

 

[Naz]

4) The strategies and general philosophies running thru the thread appear to contradict the "normal" advice given about trading, (by well known and well respected authors like Dr Alex Elder) i.e. safety first, don't play wild stocks, only trade stocks you are familiar with etc etc.?

Please note the above is not meant in anyway to be critical of this excellent thread.

Any comments would be appreciated.

I've been busy coaching and trading this week.However i'd like to answer this question.

When you get comments like the above its because they are talking to the wide audience,the crowd, and therefore these are soothing things to mention that make them feel at ease.After all its the crowd that buy those books and all they are doing is telling their customers the things they want to hear.

However i'm trading for a living,i am not going to do the things the crowd do.I have to pick up profits every day.Therefore i need stocks that can move and give me those profits.Hence it makes sense to seek these out.Stocks that trundle along will only make profits for your broker as you over trade during the day looking for the next possible move that never comes.Stronger moving stocks will let you play with the markets money most of the time and make your profits with only a few select trades during the day cutting down hugely on your trading costs whilst maximising your profit potential.

This is only a personal opinion and i'm sure many will dis agree, but i've been day trading six years for a living and i'm still doing it.I never made good money by following things that weren't moving or following gentle trading ideas written for the general public.My advice is maybe learn general market theory from a book but get your money making trading skills from a trader.

Naz

 

[dvdh]

Goog

Hi guys,

did you see GOOG this morning? Made all time highs again.
Bought a bunch at 313. Scaled out half my position at 314.72. Sold another 200 at 316.5.
Bought a couple again at 317.20 and sold 'em right away at 318.10.
Then sold the rest of my position at 317.60.

Who else was in this trade?

Check the chart!!!

-Dave

 

[Mr. Charts]

Nice trades davevdh.

Here are mine for the afternoon:
CMTL long on micro-analysis 40.75

 

[Mr. Charts]

CMTL broke through the whole number the way I anticipated, but then lost the plot and when it showed weakness I exited for +22c
These normally run on further and when it became clear to me CMTL wasn't doing what it "should" have done, it was time to say goodbye.
It was then a failed trade but was still profitable because of close position management. The high of the day was 41.15.
However, a profit is a profit.

 

[Mr. Charts]

Here is my NGAS trade.
This was breaking down and was a play looking for a possible gap closure

 

[Mr. Charts]

This produced another 37c profit and I exited on gap closure as expected.
It did in fact bounce once the gap closed and went almost all the way back up again.

 

[Mr. Charts]

And our dear friend, GOOG.
This was an entry on micro-analysis

 

[Mr. Charts]

I exited the GOOG long when it almost got to its all time high since not only did I anticipate resistance, but micro-analysis showed it was running out of steam and we all know how this baby can reverse.
In fact it stalled out slightly higher and fell all the way back to its opening print.
This was a $4 run.
No losers today either.
Richard

 

[Mr. Charts]

jimmy2,
Although I incorporate a few broader market indicators, I am trading a stock, not an index or future.
I did not have the experience you have of several small losses on the trot. When I am coaching someone I quickly get to know of any problems, (if the person is forthcoming), and can usually address the situation and make suggestions. However, your experience cannot be solved in isolation when I know nothing else about you or the way you trade - in other words I would be guessing at the cause and that would not be helpful.
Richard