To repeat – at our website we are trying to show people that a small account should not be an impediment, so I’m trading with that mentality myself. Meaning being very tight and patient with trade selection and using market orders much more often. Both very different from my normal strategy – (usually 10-20+ trades/day and using limit orders). Today’s top stock is TEAR. I traded this today – 2.96-3.42 – broker confirm. So just like AEZS on Wednesday – video and confirm – this business can be done well with any size account. The AEZS trade had an “investment of $3500. Today’s TEAR trade had an “investment” of $2400.
Bigger accounts have certain disadvantages at times also (at least psychologically). Smaller accounts have the PDT rule. One way around that to an extent is to use only a cash account – NOT a margin acct. I’ve cut way back on my trading. Just being extremely selective – 2 trades last week, 3 so far this week. Only 1 trade today (so far). Remember – holding the morning lows is very important for momo stocks. With the total piece of crap stocks, which are often the best daytraders, I want to see the low of the up gap hold first, before considering going long.
Click on bottom right of video for full screen:
Got a few charting skills questions
https://www.tradingview.com/x/OrqCmRMp/
A) The wideness of the area(black arrow) is not a characteristic of a BC? If so what part of the equation is it?(In other words what can we learn from it’s wideness and behavior)
B)Referring to the box(yellow area). What’s the earliest sign that a trade setup like those yellow boxes is about to fail or is failing?
C) Where to place a stop when buying those boxes setup areas?
A) Yes – but I viewed it as minor BC/stopping action, and I was confident it would be retested at a minimum. And that huge green volume bar on the 1 minute was very bullish. So it was a matter of seeing a wide enough reaction to make the parameters big enough for potential. And of course the setup needed to show up. Remember that a first BC, like SC, does not mean the end of a move, but a warning of the probability of a top process beginning. When that huge volume bar appeared, I didn’t even watch any other stocks. I was convinced TEAR was the stock to focus on.
B) It would be massive volume on the reactions. But look at those reactions – they’re indicative of momentum totally being up (probability). And look at it – you can see the “pressure” pushing on it. Go over a ton of charts, with all of the characteristics of a big momentum push, and start to “feel” it.
C) My use of stops is very arbitrary, and hard to teach. It’s “gut feel”. But remember, I did not buy those boxes, as they were not a setup comfortable to me. So it’s hard to answer where to put stops there. I’m not saying those couldn’t/shouldn’t be a good setup for someone else tho. In those exact situations, just watch the volume like a hawk. Make sure the red volume doesn’t explode – and at that point your only focus should be to get out. Right now, I’m trading so little tho, and just waiting for only the “best’ setups.
Thank you Trader Scott. There’s always so much to take away from your trades. I learn so much 😉
I do too. We learn from all of our trades – every single one.