Wednesday, March 30, 2016

Example of Daily Process

This is an example of the daily process I will  be following.
1. Run gappers list from
2. Select top three stocks to watch at the open i.e in this example on 03/30/2016 I choose KERX, OPK and VRNT
 So the first thing I will do is put there three stocks on the 5 min montage and draw the daily levels. This  will be 45 min 20 min before the open.

Second part will come after the market open. I will wait for a clear set-up/ price action. No choppiness in price, solid candles. There one thing I have kind of noticed on the 5 min range. Most of the time if the price is trading above the higher part of the range and emas and vwap are below the price, it set-ups for a long and vice versa. I will explain that on another blog. In this case KERX looked less choppy and was trading on the lower part of the 5 min range and the ema's and vwap were on top. This was setting for an orb short pattern. . next  open the montage that has the 5 min and 2 min chart and watch both time frames closely but more so the 2 min for entry. Define my risk, and enter my trade and immediately put a mental stop and as soon as the price moves my way, enter a hard stop.

KERX was a good example as it showed both the first move and the secondary move. This I call vwap fade aka ema's sandwich.

Trading KERX using this process would have given potential $340. I will definitely use this process in the coming couple of months and test out the results and see if I make any progress.

I am back.

At this point I am know there is probably no one that looks at my blog as I stopped posting any trades or trade reviews. Well I am back and this time I am doing it for myself. This will be my trade journal. From today March 30th 2016, I will dedicate myself every day to post my trade reviews and take this as a learning tool. I haven't heard much success and it's been 1 year and half since I started real trading and I took a deeper look at myself and realized I got lost on the process and went out there hunting for a faster, quicker way to make money in trading. Well I learned the hard way and this brought me back to the basics.

Here are my goals for the next 6 months. 

Monetary goals
Daily - $50
Weekly - $250
Monthly  - $1000


The Opening Range Breakouts
Pullbacks to emas and vwap
Emas and vwap fades or sandwiches.

Risk Management
Risking $50 on a trade
500 shares – 10 cents (11 – 30)
1000 shares – 5 cents (3 – 10)
Daily Process.
I will borrow my mentor daily process and copy and paste most of it here as this serves as my guidance. In near future I will post my daily trading process. But at the moment I am working on it and using my mentor trading process as a guide.

"For me it begins with the nightly scan.  I not only use this to help build my watchlist but I use it to get an idea of what happened in the market that day such as if a particular sector is gaining momentum. Even though only 1/4th of the stocks on my watchlist actually ever set up for me as a possible trade, it helps me organize my thoughts and gives me much needed practice in reading charts and formulating plans.  I need this structure as being a full time teacher my time to research and chart intraday is very limited.  I have to start preparing at night.  I will eat dinner, have a little family time, take a shower to shake the day off, and start my scans.

I use Finviz for my nightly scans.  It is free, it has a great selection of technical indicators, and it provides a daily chart and some basic fundamental information.  I have two simple scans that I took straight from the Textbook Trading and TandemTrader DVD’s.  I start with Scan 1, and if there are more than 40 tickers, I’ll run Scan 2 to cut down the list.  You can click on them to see what they look like.  Also, I change the charts to candlesticks to take those distracting trend lines off!  From there I will begin looking on the daily charts to see if any of them have the potential to set up for a trade the next day.  Along with looking for stocks which have immediate setups that are looking like they will breakout, I will be looking for charts which show me that they can have nice moves with good range again and again.What I look for comes directly from the DVD’s.  I look for charts that may be gearing and setting up for an ABCD type move, one that can set up for an anticipated R/G (red to green) move, a weak open and then stabilize for a move upward, or a potential morning washout after a bullish or bearish close.   Here are some examples of what I am looking for:
Once I run the scans and pick out the charts I like, I will add them to my watchlist in TOS and pull up multiple time-frame charts to see how they compare to one another.  This is an example of SGMS.  I like this stock for a potential trade the next day because on all 3 charts it is close to breaking a key resistance level and half dollar mark and will most likely run to and possibly break the next whole dollar.
I still look at other watchlists from gurus but only to see if they came up with some of the same stocks I came up with.  I always have 2 plans for a possible trade.  If it sets up the way I want it to one way or the other, or fits one of the patterns I like, I trade it.  If not, I dump it and move on. 

A stock will either open red or green, with strength or weakness.  I always wait at least 15 minutes before I make any trade.  To make sure I wait I set all of my charts on 5 minute candles for the first 15 minutes to give me a clearer picture of what the stock wants to do.  Then I'll switch to 1 minute charts and choose my trades accordingly.  I do this because I am trading at work and I cannot allow myself to jump in a trade because I do not have time to watch every tick.  After 15 minutes I can usually tell whether I will trade a stock or not.  Sometimes I am wrong because stocks are often manipulated by market makers, but more often than not, I am right.

My goal this year is to start with making $250 a day and as my account keeps growing I'll raise it.  If I only average $250 a day I'll make $65,000 for the year which is what I make at my job.  Since I am starting with $5000 this year my position sizes will not be as high as they have been.  I will have to scale them up as my account grows. I will not use leverage like I did last year.  I fully expect to be between a $400 - $500 a day average by the end of the year, especially since I have 3 months in the summer to trade full time.  I look at it this way, a 1000 share position with just a .25 move is $250.  or 3 .10 moves is $300.  The only thing that can stop me from hitting that mark daily would be my responsibilities at my job."