TA of Equities Intraday.

Discussion in 'Strategy Development' started by Bogwaluth, Jun 24, 2006.

  1. So I am one month into my venture as a day trader. It's hard.

    I was gross positive, but the VIG got me. (I think my bookie may be nicer, LOL!) So, lost money. I am cool with that. Somedays I can't pull the trigger, so I flip the SPY and just randomly buy/sell to get the monkey off my back.

    I am learning to read the tape (I want to) so it's taking me a bit longer. I thought to myself, I could trade stocks using TA in the mean time to make some cash (or at least help).

    I find Intraday Stock charts rather messy. I don't know which time frame to use (been using 1min and 5min), Thought I could trade the SPY, but it's only had a few nice days my TA is intermediate trend following.

    Is it me or do most equities just fail around during the day? Still doing my homework, so not too worried.

    Couple ?s

    Do you have any thoughts on a good range method ( not an actual method, just point in a direction)?

    Does TA work intraday on equities? Which time frame is best?

    Is their a software co that will have years worth of intraday equity charts?


  2. B -

    Good luck to you, first of all.

    I suspect you need a plan. Your own plan.

    You say you do not like scalping. That should point you in a direction of longer term trading. That should take care of the problem of commissions eating up any profits you may enjoy.

    You seem to be searching for some answers. You are therefore ahead of the game.

    Things to think about:

    1. Have a plan that you believe in (preferably, one that you've backtested), and that you can follow. If your plan calls for no trades for a day, or a week, don't trade.

    2. Preserve your capital by following your plan.

    3. Know where you're going to get out. Honor your stops. Be happy when your stops are hit.

    4. Have an exit strategy that lets you maximize your gains. You can and will go broke by taking profits that are too small relative to your stops.

    5. Your actual strategy is of far less importance than points 1-4.

    If you are serious about strategy trading, get eSignal or TradeStation, and write some basic code to start testing your ideas.

    You seem to be interested in range trading, so why not start there?

    Best of luck.

  3. Specifuckally what TA are you using? Then perhaps we can help.
  4. At the moment I use 3 MAs, breakouts of support and resistence and, volume studies when things move in one direction quickly (looking for the final rise or drop to catch the reverse). For some reason these things work better on a daily chart than an intraday chart.

    I also look for pullbacks based on swings in a trend. All kind of simple.

    I also position size based on original risk and use trailing stops for those just in case moments.

    I guess the real secret to my trading is the risk management. I don't think I am smart enough to call tops and bottoms, but I am patient enough to just let things run and I never adjust my stops against me.

    I have tried just about every TA indicator in the universe and they work and don't just about close to 50-50. The one thing that keeps me going is that I know, no matter what....price moves and I just need to get some of that movement.

    Like I said works fairly well on a longer time frame, just having trouble on the intraday.

    Tape reading does help predict small moves, but the math behind trying to catch 5-10 cent moves is tough, especially with commissions. One bad trade and BOOM, entire day wiped out. It's trying to beat the vig. I know your average scalper makes 1-3 cents per share after costs.

    When you work it all out, your trades must breakeven(cover costs) or win. Not much room for a loser and that I can't work out.

    I think one of the hardest parts of scalping is constantly scanning 50-100 stocks for your setups. I am starting to wonder if I would be better off concentrating on 5 stocks. Sometimes I feel as if I am simply just typing in stocks.

    LOL, now I've babbled enough :)

  5. Just a thought from a senile old man rapidly losing brainpower: pick one instrument and trade it exclusively, a highly liquid index future preferably. That way you will know it intimately and be able to get your TA tuned perfectly. A lot of people here trade ES. I trade NQ. Others swear by ER. With a stock you are totally at the mercy of its MM, who can play any games he wants, and does. With futures there is so much arbitrage, hedging, speculation and manipulation going on that price is a lot cleaner IMO. Plus you don't have to fuck with all the onerous recordkeeping. One form at year end with net P/L and you're done. And IMO volume analysis works nicely intraday. Search on Jack Hershey and Seamless Continuous Trading or SCT for ideas on trading index futures intraday.