Hello my trading friends, Got this problem... For the past two years or so I been learnin all this TA stuff, indicators, patterns, L2, T&S etc... but now I got a problem, Im turning into Jack-of-all-trades and a master of none! I mean , How do I devise my OWN strategy and setup to follow each day? This is what I'd like to do. Get some money. A LITTLE (like 2k, min for IB). Then start swing trading (1-5days holding max) and build this acct up. My strategy is this; I have a portfolio of say 20 stocks (you know the ones we all trade CIEN, JNPR, BEAS, CHKP, ...) whoose daily charts (for 3mo period) I would scan every night.Of course considering overall market conditions.I find it a lot easier to know some stocks than NOT know them all Than when I find some promising setups I would go intraday...or not?! I mean do I have to for the type of trading I just described? For ex. say JNPR has been in a downtrend for 2 mo and is trading in a slim channel for the past week or two. Narrow BBs, low volatility. Breakout is inevitable , to the UP or DN side whatever. So the next step would I guess be next morning turn on the PC and pull up some RT intraday charts. BUT WHICH ONES? 1, 5, 10, 15, 30, 60 min? And what indicators to put on them? I was thinking 5, 15, and 60 min charts with stoch and rsi (what settings) on them...useful? And what other screens would I need? NDX or INDU or Compq or.... Man , Im so confused here so ANY HELP would be greatly appreciated. BTW, I have Tc2000 for end of day analisys and I think it is OK for 30$ / mo and it would suit my needs. For the RT intraday charting I would go Ravenquote or for starters a bit cheaper QuoteTracker (free) I know this is A LOT of questions but I really can't "go anywhere" untill I got any of them answered. Thx, keep cool and TRADE WELL!!! Alex_The_Mad_Croat :EEK:
Hi Alex, For what it's worth; I would consider swing trading until you are successful with it and get your account built to size. Using the 60 or 120 minute bars as your smallest timeframe. They offer the opportunity into some nicely defined chart/oscillator patterns. As far as your holding time goes, consider allowing yourself to be stopped out as a matter of principle. Carefully think on intraday trading, as it is very fast and you need to be cat quick. Whichever time frame you choose -- stay with it, avoid changing it up. Try and keep your expectations in sync with your timeframe. How you locate the securities you wish to trade is another question. Technical analysis is key, almost any intermediate term oscillator will offer you a forecast. You only need 1 pattern to become profitable, I would try and become intimate with the oscillator, how it acts and what it forecast as it assimilates the price bars. Using this same oscillator on all your charts on all your time frames with the same inputs. Find that 1 pattern that appeals to you. Pullbacks are what worked for me, I would suggest that or divergent buys. If I had it to do all over again I would filter my trades against a higher time frame AND the slope of your oscillator on the higher timeframe. Trade with the slope not against. You may have your own indicator, but here is information on what I use. http://www.SMR.com Is where I got my start charting by hand, I believe this is a plus if you have the time for it. Something happens when you do it by hand, that intimacy thing. It is subscription based, offering a free trial.You will learn all the pattern's it can draw with a subscription. Also consider looking at the book "Intelligent Futures Trading" by Chick Goslin. He profiles the smr oscillator and his life as a trader. You might ask Dustin to post a link to his site, his example is visual, effective and simple. The aforementioned represent my opinions and experience. I hope this helps. GL2U -Hoyler
Here's the link to my site: http://www.iwinfree.com/notes.htm The top big chart is just an example of the way I have my 10 min Nasdaq Comp chart set up for the longer term view ("the big picture"). This chart uses RSI, Stoch RSI, On Balance Volume, and Directional Movement. Under that is an example of how I use RSI on a 2 min time frame. I'm sure it's confusing at first but you should be able to see what I'm describing after reading it a few times.
Alex, I recommend Josh Lukeman's "Market Maker's Edge" if you haven't read it. It certainly turned my trading around, was doing so-so before, then after reading the book, got rid of some bad habits like bottom fishing and fighting the trend. Then has been consistently profitable since. It's amazing how uncomfortable it is to trade with the trend (buy strength and short weakness), but more amazing is it makes you money.
Hi traders! Thank you all sooooo much for advice given, you really are a great bunch of people. Still, I hate to be a pest but there are some more things I'd like to know. For the trading style described in my first post, what charts would be necessary and what time frames? I really want to KISS (STupid and SImple) and, what is "really" the difference between 3 min and say5 min chart? Or 10 and 15 min? And wouldn't it be useless to use 120min bars since you would get only a few of them in a day (guess it should be 2 or more days, right!?). Also I can't grasp Stoch and RSI, I mean WHAT SETTINGS will wotk over what timeframe? If I have a 5min chart will 5, 1, 1 stoch work better than 5, 3, 3, or some else or.... Thanks so much once again, and KEEP THOSE TRADES GREEN! Alex_The_Croat
neo Try 15/5/5 on a 5 minute chart for stoch. Watch the volume spikes in relation to what your stoch indicator is telling you. Go slow. Learn over time. If you observe your charts very carefully over and over and over and over,(need I keep repeating myself?) you will begin to see how pieces of the puzzle begin to fit together. But, you gotta study every day. Good Trading. dozu888 Not to stray too far from the subject matter here, but, briefly what did you find particularly interesting about Lukeman's book. I'm not so sure about his strong emphasis on the "opening price signal" ideaology and/or the 8-period moving average. Seems like they generate too many false signals. BSAM
neo, <I>I can't grasp Stoch and RSI, I mean WHAT SETTINGS will work over what timeframe?</I> In short time frames, it's much more important to study how those indicators act and react to a chosen setting than hitting your head against the wall trying to find the perfect setting (that doesn't exist). Eventually, after you settle down into a given holding period, you be able to tweak whatever you're using with little effort.
THX so much! Is that Alan like Alan Farley from http://www.hardrightedge.com? Man, your site rules, just got an enormous quanitiy of great info off of it. Keep up the work. Alex_Gone_Swing_Trading
Agree about Alan's site and would especially recommend his new book The Master Swing Trader ---- superb stuff from a real pro.
Keep it really simple. I have no idea what a stoch, or any other fancy charting stuff is. I find trading is best done with less info. Most of that stuff just lags the move anyway. I use 3, 5, 15 min charts depending on what i'm looking at. A moving average couldn't hurt just to see how oversold/overbought a move is. (stocks don't like to move too far from their moving averages) I recommend bollinger bands as well. (I don't know why he made those public info, cause they are amazing) I hardly ever use those tools though, except on the daily charts. Intraday, anything can be manipulated. Finally, I recommend not trading any of those volatile names, you'll get chopped to bits as a novice. Stick to looking for larger moves, and since you only have 2k, you might want to do options instead. I was able to turn like 3k into 20k in the last month on about a half dozen option trades. I don't think that anyone trading with low equity can make it in equities without first building his account using options. Best of luck though.