Entry strategy for intraday trading

Discussion in 'Trading' started by lojze, Feb 25, 2002.

  1. lojze


    My thread on exit strategy was really helpful, but who of you, the experienced traders, can help me with right tools for decision to enter the stock for daytrading during the midday. So, not the first or the last hour, but during the midday.

    I generally use candlesticks and support/resistance, but what is the most important tool to determine entry during the midday?

    I feel, that candles and support/ressitance is too little.

    Please, help.

  2. lojze

    Based on my own trading experience via Japanese Candlesticks, support/resistance levels...I rarely trade mid-day because the trends are often not as strong.

    Thus, less profits.

    It's not always like this...yet, more often than not...it is.

    For example...eventhough I think you were talking about stocks...look at the consolidation like pattern for the NQ or QQQ on February 22nd, Friday.

    Thus, mid-day trading may be more suited for "scalping"...by the way, I'm not a scalper.

    As I mentioned above..."I rarely" trade mid-day". Yet, when I have...its via a customized trading pattern that rarely appears.

    Nihaba Ashi

    P.S. Most of my friends that trade...often give back their profits from the morning during mid-day trading.
  3. Read the tape, look for strong stocks in strong sectors. Don't buy down stocks, don't sell up stocks. If the SPoo premium is high - then buy...if Spoo premium is low - then go. (Kinda silly, but it works).

    Look for more mathematical opportunities during mid day, not so much momentum. Look at pairs etc.
  4. lojze


    Thank you, Don for your reply.

    Could you, please, help: What's SPoo?

  5. Spoo is just the term for the S&P 500 futures contract (from SPU, SPH, SPM, SPZ) ..we didn't want to call them Spam's or Spazz's so SPoo stuck!

  6. lojze-
    don't forget the ever-important element to charts/tape reading whatever= Volume

    like others have said, mid-day is usually not the best time to enter a trade.... 11am-2pm generally sees lower volume
  7. Here is an approach I have been using successfully. I use traderbot for my intraday scans ( and have experimented with various scans there) and use four types of scans to find candidates to trade during mid day.
    1 Intraday break scan.
    2 Trading at extreme: This scan looks for stocks trading within certain percentage of their opening price.
    3 Tick scan:Here I look for stocks where say 70% or more of their trades are at ask.
    4 Intra day reversal.
    This gives a candidate list which I eliminate using volume.
    Even though most people will tell you to avoid the mid day period, there are some very good opportunities to trade during this period. Many time entry during this time benefits from the spike in price which happens when the day traders get in to these stock around 3.00pm
  8. tntneo

    tntneo Moderator

    you know what ? I would like to say something about the midday. Most here are saying not to trade there.
    well, I have another view. You have to remember what happens during this period of low volume : bigger market participants or specialists (depending on the market) will try to move the market against the previous trend.

    So actually for traders not always looking for a few scaps it is the perfect time to follow the same footsteps than the market makers.
    yes, the lower volume means you have to be careful with the extra noise, but just remember what was the trend before the period and try to use this time to position yourself before the market resumes this trend in the afternoon.

    obviously this is not for every trader, but that's my point. it is not true for every trader that mid day is bad. it can be actually very good since you can more easily decode what's going on.

  9. I think the original question was what STRATEGIES or tool is used to help with trading midday...posted by lojze.

    There are traders (the ones I know are mainly scalpers) that succeed in midday trading.

    Yet, I'm not sure what strategies they are using.

    As for my own style of trading...midday trading is not suitable via my own strategies.

    I do remember other traders (none scalpers) using "slim jim" patterns...triangle patterns...news related events during midday...pullbacks to key intraday moving averages, etc...as entry setups.

    It'll be interesting to see someone post some statistics on their own trading for the past month during midday (winners vs. losers, amount of profits from midday in comparison to morning or late session)

    Nihaba Ashi
  10. stevet


    The problem of taking positions midday is that it is gambling and not trading. I don't trade off volume, but the problem midday is that as there is less volume, moves can be real fast, and therefore you cannot ascertain the risk/reward - one loss will wipe out any wins.
    #10     Feb 26, 2002