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Trading Strategies, My Plan: Updated 9/13/2019

This is simply putting into writing recent decisions I  made regarding my trading.  I am setting forth a narrow set of rules that I will follow until they are no longer profitable.  While other strategies may work for other people, for me, my current day job, my mindset, time frame, and historical trades, these are what work for me. These are my only active trading strategies.

I have been using these rules since 7/22/2019, W-L is 20-7 as of writing on 9/13/2019.

Pre-Market

Meditation is my edge!  I take 8 minutes every day before the markets open and tune out the world and tune into my breathing.  I use this app as an aid.  If you are curious about meditation and the benefits to traders check out: Trader Mind.

Scanning

End of the day:

I run 2 scanners at the end of the day looking for potential plays for the next day.  First I search for Stocks between $1-$8, with volume of more than 1 million shares and a minimum of a 10% gain the previous day.  From there I look at the daily chart for the past year, I eliminate anything that is trading mid-range since I can’t predict the next turn.  The stock must be trending up.  The best are approaching resistance or just above support.  I use TD Ameritrade’s free trading software, Thinkorswim for this scan.

The second scan is I look for stocks in the same price range, with volume of at least 500K shares, that have closed at a 52-week high. I use Swing Trader Bot for this scan, they have a handy app too.

Intra-day:

I search in the same price range for a minimum of a 5% gain and volume of 150K shares.  I use this scanner for my “15-minute trade,” see below.

Entry: Higher-High

My entries are strictly between 9:30 and 11:00 AM only, 10:30 is the typical cut-off and 11:00 is firm.  This is the most volatile part of the day.  Positions may be held after that be not entered into.

Every single stock I buy must be making a higher high, there is no point in trying to buy the bottom, I have not been able to do it.  The higher high tells me there are buyers out there and likely more will be coming in.  I look for established resistance on daily, hourly and 5-min charts.  I prepare a buy order $0.01 above that level.  As soon someone else buys at the level one cent above I place my order and get executed no problem 98% of the time.  If my order doesn’t get filled I will wait no more than 5 mins to allow it a chance to get filled.  After that, I cancel the order and don’t look back.

The “15-minute trade” as I call it, I use my intra-day scanner to find stocks that are up and moving.  At 9:45 I will look at daily candles on a year chart to find stocks trading in new ranges.  I establish my entry $0.01 above the 15-minute high and place my stop below the dip that came after.  

Setting a Stop

Looking at 1-minute and 5-minute candles I can establish the bottom of the most recent dip, this is my stop, I set a hard stop-loss order as an insurance policy.  This stop must be no more than $0.25 from my entry.  I will continually move this stop up just below each dip so that way as long as the price continues to rise I continue to profit.

Position Sizing

My current bankroll is about $10,000 (and climbing, $10,666 at writing) so I limit my risk to 1% or about $100 per trade.  If my stop is $0.20-25 away I trade 500 shares; stop $0.10 away, 1000 shares; $0.05 stop will be 2000 shares.  I don’t use a spreadsheet or anything of this, just a quick calculation in my head.  I ways trade in intervals of 500, this is a guide more than a firm rule.

Taking Profits:

I will lock in profits when I am 3x my stop or into the second spike, whichever comes first.  Anytime the pattern becomes unclear I lock in profits.  When my entry is in the first 15-minutes I will usually sell into the first spike since those spikes are less likely to hold than one after 9:45.

 

All my trades are live Tweeted so follow me: @InvesTakeCharge

If you are just getting started check out my home page where there are tons of free resources and all my blog post from 2+ years in the market.

 

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