Through Dec to March of this year, I did a fair amount of day trading with decent results. Thanks to twitter, I found @stockguy22 and his online chat forum. I decided to actually learn from a professional day trader what to look for when making trades, and see how I could do. This is all taking into account that I'm working full time at a startup, so this is the job before the job.
The results are impressive. Over the past 2 weeks I''ve made $10K US with an average investment of $20K and a maximum total investment of $40K. Think about that. 25% returns in 2 weeks on a flat stock market. He really knows his stuff.
And what's more amazing, is that was leaving at least the same amount of money on the table because I wasn't as fast as him, I held a position too long, or I was working or sleeping. There was the morning that I checked $HGSI and was up $3K, went back to sleep for an hour after not selling when he did, and it went back to zero. Talk about you snooze you lose.
The techniques are very straightforward. The fundamental strategy is don't guess what the market will do, react to what the market is doing.
1. Protect your money. It's far better to miss a big run up than to lose a bunch if a stock keeps going down. That means put tight stop loss orders on.
2. Look for "tweezers" to indicate a market change and either bottom or top. That means the thin line on the one minute candle chart.
3. Buy runups on the pull back. The pull back from a run up (or run down for shorting) will be at one of the 3 fibonnacci numbers, roughly are 38, 50 and 62% of the run from bottom to top.
4. Buy when the stock has found support above the 20 period moving average. If a stock drops and drops, then bounces back you have to wait until it crosses that 20 period MA, and even better if it drops down but not below that line.
5. Look for heavy options volume. I don't know the details, but there's a number of cues there as to whether institutional investors think a runup is overdone.
6. A small play is the 3:30 to 3:45 EST trade on shorts. The idea is that shorts will be covered in this window which may lead to a pop in a stock that is moving. I've only made marginal $ on this though.
7. Only do overnight holds on a stock of the price is rising and the volume is high.
8. Get out even when you are convinced the market is wrong. He still has a blind spot for natural gas and has followed $HNU.TO a long ways down ( I didn't buy because I think it's got further to go), but he covered his losses on $EXM/$DRYS (the dry shippers) and others.
The results are impressive. Over the past 2 weeks I''ve made $10K US with an average investment of $20K and a maximum total investment of $40K. Think about that. 25% returns in 2 weeks on a flat stock market. He really knows his stuff.
And what's more amazing, is that was leaving at least the same amount of money on the table because I wasn't as fast as him, I held a position too long, or I was working or sleeping. There was the morning that I checked $HGSI and was up $3K, went back to sleep for an hour after not selling when he did, and it went back to zero. Talk about you snooze you lose.
The techniques are very straightforward. The fundamental strategy is don't guess what the market will do, react to what the market is doing.
1. Protect your money. It's far better to miss a big run up than to lose a bunch if a stock keeps going down. That means put tight stop loss orders on.
2. Look for "tweezers" to indicate a market change and either bottom or top. That means the thin line on the one minute candle chart.
3. Buy runups on the pull back. The pull back from a run up (or run down for shorting) will be at one of the 3 fibonnacci numbers, roughly are 38, 50 and 62% of the run from bottom to top.
4. Buy when the stock has found support above the 20 period moving average. If a stock drops and drops, then bounces back you have to wait until it crosses that 20 period MA, and even better if it drops down but not below that line.
5. Look for heavy options volume. I don't know the details, but there's a number of cues there as to whether institutional investors think a runup is overdone.
6. A small play is the 3:30 to 3:45 EST trade on shorts. The idea is that shorts will be covered in this window which may lead to a pop in a stock that is moving. I've only made marginal $ on this though.
7. Only do overnight holds on a stock of the price is rising and the volume is high.
8. Get out even when you are convinced the market is wrong. He still has a blind spot for natural gas and has followed $HNU.TO a long ways down ( I didn't buy because I think it's got further to go), but he covered his losses on $EXM/$DRYS (the dry shippers) and others.
It's interesting! I like it!
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