Friday, January 25, 2008
Thursday, January 24, 2008
Wednesday, January 23, 2008
How low is low ?
As we know every one is looking for low risk setup. But the question is how low is the low we are looking for? In my short trading career i fund it really hard to find a low risk setup that really satisfied my wishes. According to my trading plan i should risk only 1% of my account(fixed amount),but i fund it hard to loss that much. So i made a change,the change is ,i will be only trade a stock if the previous candlestick of my entry candle is narrow enough to give me the same amount(or less) the stock price is ,but in cents. For exm in a 20 dollar stock i am willing to take .20c risk.
No trade
I couldn't find any opportunity today & i did push me to make any trade which i am proud of.
Tuesday, January 22, 2008
The shadow of candlesticks:
Why the shadows of the candlesticks are not less important then its real bodies? There are many occasions when shadows become more important then their real bodies.
What we understand when long shadows appear:
· Shadow indicate uncertainty
· The bigger the shadow the bigger the uncertainty
· In an uptrend upper shadow should be noticed as a caution sign.
· In a downtrend the lower shadow should be noticed as a caution sign.
What we understand when long shadows appear:
· Shadow indicate uncertainty
· The bigger the shadow the bigger the uncertainty
· In an uptrend upper shadow should be noticed as a caution sign.
· In a downtrend the lower shadow should be noticed as a caution sign.
Candlesticks i use to find trades:
Inverted Hammer
Hammer
Shoothing Star
A Doji, Dragonfly Doji, Gravestone Doji
Hanging ManWhat is more important in day trading, Entering or exiting a position?
According to my trading plan I don’t enter a trade until I found a candlestick which is short or narrow enough to give me the risk I am willing to take ,what does it mean? It means I only enter a trade when I found an excepted risk: reward ratio. Now the problem anyone can face is you can know your risk easily (could be predetermined) but reward, how do you know, what is the reward, before closing the position. What I do? I look at the next round number, support line, resistance line to find my exit point. I also exit a position if it drop below 5EMA,but it is not possible to before hand.So exiting a trade is not less important then entering or vice versa.Pendulum in the stock market
Remember February 27, 2007, biggest one-day loss since 2001, yes that was the top left of the pendulum. Unfortunately that was the fast shake of it, so it kicks the start button, now we are moving from left to right until it lost its momentum. Every trader knows how hard it is to trade in this kind of market, where fed wants to boost the economy by lowering short-term interest rate from time to time ,which comfort the investor for short period of time .After those very short lived green days we stuck in the red light for unpredictable time. This pendulum could probably bring the bear down, by hypnotizing the Wall Street bull. Some traders who sold short from the top of the head and shoulder top which started at mid October assumingly they are better off, though long term investors are in agony.
Sunday, January 20, 2008
My trading system
High volume stock ,price range $10-$150.
Daily volume at 10 am 600k-300k.
I will use 15 minutes chart but also check 30 minutes charts to find opportunity.
Avoid extremely wide opening ranges( shadow)
Choppy price action.
Not get into any position before 10.am
Narrow range bar is the best candle to enter.- Exit trade when i gain round figure like .50c ,1 dollar or if the price move below 5 EMA.
- 5 EMA need to be close to the candle.
Enter stop loss as soon as get into a position.
Before entering a position I must know the stop loss and possible exit.
Position size will determine by dividing the fixed amount by stop loss.
Pattern that I trade a. opening breakout b. flag c. pullback d. base breakout e. wedge f. triangle h. tweezers top & bottom
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