Tag Archives: Day Trading

State of The Market

It’s that time again. I’ve been quiet on the blogging and videoing front. When that happens, as predictably as the sun rises in the east, I get emails asking how the market is. The last few weeks have seen a rash of these for some reason, and they all say more or less the same thing: how are you trading now the market is so constrained and stocks aren’t moving like they used to?

Here’s the thing: suggesting that stocks aren’t moving like they used to is, to put it politely, nonsense. Sure, markets as a whole go through periods where there is less activity. You can look at an index like the NASDAQ 100 or the S&P 500 and say that it did nothing all day. But that’s a macro view. Zoom in, look at the individual stocks, and you will absolutely find some that have put in stellar moves during the day, no matter how “flat” the index says the market was.

In all the years I’ve been trading, I’ve yet to see a day when there weren’t at least a handful of stocks that offered up easy trades. Yes, there have been days when I didn’t find them in time, but they have always been there.

So here, in an attempt to make a point, I’ll show you five stocks I traded last Friday (29th May). There’s nothing special about Friday. On the contrary, I have chosen it for its very ordinaryness and the fact that because I’m writing this on Monday morning, it’s the last day I traded, so I don’t have to go further back in my trading log!

Let’s have a look at some charts (clicking on them opens larger versions).

HRTX

HRTX 290515Look at that chart and tell me there aren’t active, trending stocks out there. There’s over four dollars of movement in this chart, and on a stock priced at around just $20, which means it doesn’t require a huge account balance to trade a decent size.

I got in this one at around 17.60, and out again at 18.50 when it started going sideways, taking 90 cents profit per share traded. That’s $900 when trading 1000 shares.

Then, because I was still around, I had another go at lunchtime, getting in again at 19.05. I took half off at 20.00 for 95 cents, and let the other half run on, eventually getting out at 20.50, for 145 cents per share.

Profit on that second trade then, was $475, and $725 for the second half, for a total of $1200.

Remember, that was the second trade. Add in the first, and that means $2,100 profit on just this one stock.

But of course, there wasn’t just one stock to trade…

GILD

GILD 290515At first glance this chart looks less smooth than the previous one, but as anyone who’s read my book will be able to see, there was a classic entry signalled early on in the morning. I got in around $112.70 (I’m rounding up and down a cent or two here to keep things simple), and then was out by $112.40. I’ll be honest, I let this one run too long, I let it come back too far.

Result: 30 cents, or $300 profit on 1000 shares traded.

Guess what? This one gave another entry, too. A lovely double bottom, or reverse head and shoulders. Whatever you want to call it, the change in trend was clearly signalled. So I got in again at $112.60 when it took out its previous high after the double bottom was formed, and I rode that sucker up to $113. Again, book readers will know why. That was a straightforward 40 cents, or $400 on 1000 shares.

If I wasn’t as lazy as I am, and traded the afternoon session as well, I could have ridden it back in the afternoon with the clear signals it gave (break of support anyone?), but I am that lazy guy, and I like spending time with my family.

WFM

WFM 290515The range on this chart isn’t as impressive as HRTX, but they can’t all be mega-winners. The chart itself is a lovely long down trend. You could pretty much short anywhere, hang on, and cover for a profit. Me? I was in at $41.95, then out again at $41.65 for a stress-free 30 cents, or $300 on 1000.

There was another easy trade to be had after lunch at around 41.50 based on support and volume. Using the EMA as an exit signal, I could have ridden that down to 41.10 for an extra 40 cents a share, but I wasn’t in front of the screen then. The point is though, that the trade was there for the taking. Another opportunity in this so-called “constrained” market.

QCOM

QCOM 290515I keep this sucker on my core stocks watchlist, and have done for years. It comes and goes, but when its working nicely, it’s a reliable little performer. Bit of a tip for you there. It doesn’t give me a trade every day, but when the signs are good, it’s a banker.

Friday I was in at 70.20 on a classic entry setup, and out at 70.00 for a quick and simple 20 cents per share, or $200 profit on a 1000 shares, in around 15 minutes or so. You’re never going to get rich on trades like that, but they help plump up the coffers.

AAPL

AAPL 290515I’ve left this until last because Apple is a bit of a beast. It was out of range for most people for a long time, then they did a stock split and the price came back within reach. Now it’s on the upper-end of reasonable again, but if you size your position to take account of that, there’s no reason to miss out. The smaller size you trade is usually offset by the higher profit the trade can generate.

Because Apple is a volatile little so and so, it needs more wiggle room than lesser stocks. However, the patterns still work, and frankly if you’ve got the nerve, you could almost make a full time living trading just Apple (not that I would ever recommend sticking to one stock. Nothing is a dish for every day…)

So, Apple. I was in at 130.95 (classic entry pattern again) and back out of my short at 130.20. 75 cents a share, or $750 on 1000 shares traded.

And what’s this I see? A nice double bottom and a new up trend. That was heading into lunch, and I was busy with other trades, so I left it alone.

Anyone coming back and watching after lunch would surely have spotted the even nicer double top and break of support that happened early afternoon. That led to a nice trade opportunity with a good 40 cents per share profit to be had.

Summary

I’ve waffled on longer than I intended, but there are a few things I want to summarise here.

  • As you hopefully noticed, these charts all offered more than one trade. If you miss a trade, if a trades turns up a loss, or even if you make a brilliantly profitable trade, don’t then write the stock off as being done for the day. Nothing says you can’t have two bites of the cherry.
  • None of these stocks were difficult to find. Two of them were on my core stocks watchlist. The others presented themselves through my pre-market homework.
  • There are always stocks that move like this, every day the market is open. Find these easy setups, and the trades themselves become simple. I’m not going to resort to a cliché like “shooting fish in a barrel”, but you know, it’s heading in that direction.
  • There were undoubtedly plenty more nice trades that passed me by. These are just the ones I caught.
  • Yes, I’ve cherry-picked the winners for this blog post, because the point I’m making isn’t that I’m some wonder-trader (I’m not), it is purely that there are always nice trades to be had. I made two losing trades on Friday, too. And guess what? The total losses from both of them came to less than $100. If you’ve added up the winners in the charts above, you’ll see the profits were $4,150 for the morning (that’s just the trades I took, not counting the later trades that I wasn’t around for). So even taking those couple of losses, I still made more than four grand in a morning. You could cut the size of each trade by four, trading just 250 shares a go, and that’s still more than a thousand dollars profit.

That’s it, I think I’ve rattled on long enough and made my point. In answer to those asking how have you adjusted your trading in this market? the answer is I haven’t. I traded exactly the same way on Friday as the Friday before, as any Friday (or any other day of the week) a year ago, or ten years ago. And when I’ve finished typing this post, and after I’ve done my pre-market homework for the morning, I’ll be trading just the same way today, as well.

Good trading!

Time Frames-1

Time Frames

I often talk about day trading almost assuming that everyone else thinks like me – that it’s the safest and most profitable time frame. Of course, there are other time frames to trade in, so in this video I take a look at them, and explain why I usually ignore them!

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Head Stuff

When talking about day trading, it’s very easy to get carried away with details of strategy, technique, and button pressing. But all that stuff is only half the story.

The other half is actually having the discipline to do all the above. It’s what I call “head stuff”, and it’s the subject of this video:

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Keeping Day Trading Simple

I see lots of traders overcomplicate their trading. I prefer to keep things simple. It leads to less stress, and more profit. Todays video looks at how to simplify your trading.

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