This is simply putting into writing a recent decision I made regarding my trading. I am setting forth a narrow set of rules that I will follow until they are no longer profitable. Right now I have two strategies that are consistently 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.
Strategy 1 – Weekly Swing Trade
Trade-ideas.com trade of the week.
I will risk a maximum of $100, placing a stop where they indicate.
Once solidly into the positive, I will move the stop to a break-even area.
I will look to take profits once a solid (minimum 3-4%) gain is made.
This is the simpler of my trading strategies and anyone can follow it. Simply sign-up for the free email and make sure you check it every Monday morning.
5/28/2019 Update: I am no longer using the strategy. I’m leaving it up as it still a viable strategy but no longer fits my plans.
Strategy 2 – Day Trade
“Multi-day Up-trend Off Support”
This chart is a perfect setup:
This is the more complex trading strategy. I have built this one from my education and an analysis of my winning trades. If this is all foreign to you, start here and work your way up.
I will make a daily watch-list, highlighting stocks that are under $10, have moved at least 10% and traded more than 1 million shares the day prior.
Only stocks that are on an uptrend will be considered, with a minimum of 3 days making higher lows.
Preference will be given to low floats (under 10 million) when many plays are available.
List shall be limited to 8 stocks maximum.
I release my watch-list daily on Twitter, typically between 8:00 & 9:30 AM.
Before markets open, I will establish support and resistance levels.
Intra-day or long-term are acceptable depending on volume, news, earnings, etc.
Entry shall be at an established support level, or new support/old resistance.
Never on a break-through resistance; only when the chart returns to that previous resistance, new support area.
After 3 tests of support, the support will no longer be considered valid since support levels are weaker each time they are tested.
3/22 Update: 5¢/10¢ rule, If the price gets within 5¢ of the establish support level I will buy-in no more than 10¢ above that level.
Stops will be set at or just below the establish support level.
Profits will be taken when target goal is met or unexpected resistance shows up. It is always better to lock in a profit when the situation changes and the pattern becomes unclear.
Risk shall be limited to $0.25 per share.
Risk:Reward minimum 3:1.
Trade size will be 100 to 500 shares to minimize risk until consistency is established.
3/10 update: I am ramping up to 1000 shares per trade.
3/18 update: I am taking $4,000 – 4,500 positions on each trade.
Trading time-frame is limited to between 9:25 and 10:30 AM.
A Position may be held past 10:30, but not entered into.
3/10 update: Ideal trading time is 9:45-10:30 AM, 9:25 and 11:00 AM are now the firm cut-offs.
Here are a few charts displaying the setups I’m looking for: