Friday, August 7, 2015

Shorting Into Daily Resistance

In the last few months, my strategy has been to trade gappers. I have a blog on that strategy. Its a good strategy that has good results but the set-ups don't easily come.  Today we had a good one on AQXP but I missed it as I was distracted watching other gappers. I have a small account and want exponentially grow it, so I thought to myself, how are the other traders are able to turn a small account into over 1M in less than two years. All these traders at one time in their early trading careers had conviction in their trades and went huge with defined risk of course. My biggest inspiration comes from Tim Grattini  @kroyrunner89. He was able to turn 1.5k into 2Mil in under two years. He did a FREE Video, explaining one particular strategy called Shorting into Daily Resistance. This one got me interested for a number of reasons. It's applied on the first 15 min of the open (Would work perfectly for me since I only have an hour in the morning to trade before work) Two, I like the potential it presents to make my daily goal on the first 30 min. I have studied charts the last couple of weeks and noticed if a stocks gaps up on less important news e.g beat earnings by a small margin, the stock tends to get faded after a morning pop to or at near daily resistance. I will give an example below. I will continue updating this blog on this particular strategy.
I am still new at this and I am sure there are other factors I haven't considered but for now it seems to be working.

This morning I ran my gapper scan on this Website as I usually do and found TTI.

I pulled out the daily chart and noticed there was resistance at the 6.50 level. There wasn't much activity going on pre -market.. so that for me served as one of the confirmation this might be faded. 
Stock opened up at 5.92 and ran to HOD at 6.65. I had an order entry at 6.50 short, as this was the daly resistance. Stop was 25 cents.I am only trading small shares, so I gave myself some room. My entry was hit and the stock faded and went red on the day. Below is a snap short of the daily, 5 and 2 min along with the R lines drawn.

Another ticker that wasn't on my gapper but had the same set-up this morning was OAS. Daily resistance at 10.75. It didn't get to it but had a nice morning pop to 10.70 and faded.