Just some background about me: I've been daytrading for about 4 months. I had a losing month my first month but made money the last three months. I play with about $26-27k in my account with 4x buying power. (I take out the excess each week.) Last month, I averaged about $400 per day. Now here is the strange thing. I know that people use different methods to predict the movement, but for me, I strictly read 1-min, and 5-min charts and lately (over the last 3 weeks or so), my winning rates have been tremendously high (about 85% winning rate according to my trading log). I can FEEL when the stock is about to move (either up or down) and I act quickly. I also get out quickly, so I miss some runs sometimes, but because my win rate is so high and I go for about $500 per day, this INSTICTIVE TRADING seems to be working pretty well. Although I have learned the TA extensively, I find myself relying more on my instinct to get in and out of trades. It's great because trades are made very effortlessly now, and I don't feel as stressed as before. With my style, it's very hard to blow up my account, and even if I do, I can always refund my account since I only keep about $26-27k in my account. I stopped studying outside my trading hours because I can look at any stock now and get a good feel for the movement with a pretty high accuracy. Who else trades like this? Is this just a natural process of really believing in your system and your brain subconsciously executing the system?
I trade this way for the most part. Lots of experience has taught my brain and eyes what to look for and my fingers to react immediately when I see something good. It all happens in one motion. Looking back, after the trade, I can explain why I got in and all the factors that led me to take the trade. But, getting in, requires only a split second of analysis and a split second to enter (or exit) a trade. I guess when you get used to identifying setups you like, it doesnt take long for you to react.
Just like driving a car. You basically have to run on auto for such a tight time frame. Always good to keep expanding your field of observation and upping the challenge factor.
Instinctive trading (intuition trading) after you've learned TA is just trading that same TA without a specific trading plan. Here's something you could do if you think it won't mess with your intuition trading... You should let someone (unbias) watch you trade and you should explain each trade to that trader at the end of the trading day. I wouldn't be surprise that he/she actually sees a method to your trading... A method that's based upon what you've learned so far about TA. Further, I've seen a lot of ET members that say they don't use TA or say they use some specific indicator. Then when you see them post a chart of a trade in another thread at a later date... There's either additional indicators on that chart or annotations related to TA and then when they're questioned about such... They will usually say they only use such as references. My point, if its on your charts...your mind is most likely processing the info even if you say you don't use it or think your not using it. What's on your charts??? Last of all, I only recommend intuition trading (instinctive trading) for those that are very experienced profitable traders and not for someone that only has 4 months under his/her belt. Regardless, congrats because you are profitable when most aren't in their first few months of trading. Hopefully your not profitable for the wrong reasons because such will most likely instill some bad trading habits that could sabotage your trading when market conditions changes. Mark (a.k.a. NihabaAshi) Japanese Candlestick term
"Awful darn close to the 25k minimum don't you think?" This is intentional. I have gone below it once but came right back up a day after. Also, because I withdraw my weekly earnings, if I do go down, all I have to do is add back some of my profit back into the account. My broker gives me 1 wk to go back above $25k, so it's no big of a deal.
NihabaAshi, My chart is just 1-min and 5-min chart (candlestick chart) on my screen and volume info for each corresponding min, and that's it. I no longer use moving avg and a host of other indicators (bollinger's band, adx, obv, rsi, etc) because I find these to be great for short-term swing trading but not for intraday scalping. I can pick out the intraday support and resistance pretty well just by looking at 5-min chart, and use 1-min chart to see the entry point. I suppose you can call that TA somewhat but that's about it.
It does not matter whether you traded 4 months or 4 years. Once you got the feeling, you pass the test. I have the same winning ratio, I just do not use leverage, as I have a day job. But I exactly know when and what price I should jump in and whne I should get out or cut loss.
I wish I were so fortunate. Although I have been trading longer than a fair number of people here, I seem to have the least amount of natural rhythm. While some of you gents can just dance naturally and gracefully with the markets, my floor is littered with detailed footwork sequence diagrams. *Sigh*