Wow... So is that what this thread is really about ? Seriously, you have on your chart the RSI, On Balance Volume, 3 different price moving averages and you mentioning ATR. Ask those to help you that are specifically using that stuff. To quickly do what you just did (asking someone to educate you about a strategy that works for them...that either implies you have stats and they are not good but you were using the strategy anyway for whatever reasons or you've been using the indicators without a backtested strategy. What books are you using...can you specifically name the books ? If those books have nothing to do with the RSI, On Balance Volume, 3 different price moving averages and the ATR...that may be your problem right there. Simply, the books are telling you one thing and you're using indicators that are telling you something else. Therefore, don't blame the books unless you're using those indicators exactly the way the books explains it. wrbtrader
I'm currently reading technical analysis of stock trends, I've read Elliot wave principle, behavior of prices, intelligent investor, tape reading and market tactics none which actually teach me to trade but understand market behaviors and principals.. the books give me understanding on investing not trading.. when I try to teach myself strategies for day trading these are things I've learned to use. In response two your first bold statement, its both; my stats aren't good hence why I'm losing money and these are the only strategies I know! And I'm using the indicators and using the think or swim platform to backtest.. I don't know anyone specifically using that stuff otherwise I would. I wasn't blaming the books, I'm trying to learn and the person before asked about a trading strategy so I asked.. maybe instead of critiquing you can give me constructive criticism instead of pointing out what we both already know; you clearly know more than me!
Sounds like somebody trying to learn calculus before long division. Go on Amazon and search for "day trading" and "beginner" and see what comes up. Give the "For Dummies" books a miss. They make me feel like somebody with no prior knowledge of day trading decided to write a book on day trading. The book I mentioned by Andrew Aziz is not a bad start. It is on Amazon and is not expensive. You want a simple strategy to start with? Here ya go. Set up your chart with Bollinger bands and 5 minute candles. Do this before the market opens. Set your scanner to show you stocks with high (above 6) relative volume and high (WTH, stick with "6", why not) volatility and price between $5 and $10 that are already trending upward at 0950, 20 minutes after the opening bell. Buy 100 of whichever looks strongest. If it had good pre market volume, that is really good. If it had been flat for a few weeks prior, then that is good too. More relative volume is betterr. Higher volatility is better. If nothing looks good by 10:00, play video games or something. You're done before you even started. Trade another day. If you got a good stock, buy 100 shares. Set your stop loss just under the low of the day. Set a profit target to go with the stop, and just move it up out of the way in case you want it later. Okay, now see how far below your entry your stop loss is. This is your initial risk. This is what you definitely stand to lose if the stock turns against you. For now. You will hopefully get a chance soon to move your stop loss up above the break even point. DO NOT lower the stop loss if the stock goes down! It is low enough already. It is there for a reason, to prevent a falling stock from wiping you out. You suffer the small loss rather than risk a much bigger one. If it is half a percent down and you have a $1000 position, then your risk is five bucks. That makes this a pretty cheap lesson. Just as an example. Now just watch it go up. It should bounce back and forth gently from one edge of the Bollinger to the other as it goes up. When you have at least one strong candle between the break even price and the current price of the stock, move the stop loss up to just barely over the break even point. Now you have eliminated risk. You are in an excellent position. You can't lose... you can only win a little, or win more than a little, one or the other. Every time the stock moves up, move your stop up a little. How much is up to you. You could keep it maybe 60% of the way from the break even to the current price, for instance. Or keep it just under the last previous low. Remember at this point you are a winner. If you stop out you have a profit. If you don't, then later on you will have a biggerr profit. If the stock reverses for a tick but goes back up, you will have wanted your stock to be low enough to not get triggered. If it reverses and keeps going down, you will have wanted your stop to be high enough to stop you out early and minimize your down slide. The stock may move sideways for a few bars. That's okay, stay in the game unless you see a bear candle with high volume or a pretty big bear candle with no or very little lower tail. Cause otherwise it very likely will continue up again as long as the bull candles all show decent volume. If you get scared, bail. No biggie. Live to trade another day. If it keeps trending upward, sell at 15 minutes before the bell and congratulate yourself. If a candle pushes down through the lower limit of the bollinger band, with both lower corners of the body sticking out the bottom, bail. If you get a big bearish candle and very high volume, bail. But your stop is there. Its got your back. If your stock went up 50 cents over the course of the day, you made $50 minus commission. Not a bad first win. Maybe not worth your time, but a win is a win, and you will feel pretty good about it, and you will know how to get more like it. If you lose, and you WILL about half the time, don't feel no way about it. If you set your stop properly and kept your position size small, then your account was in no real danger. Live to trade another day. Two, three, four losers in a row? Maybe you did something wrong. Maybe that's just the way the cards turned. A $5 or $10 or $20 loss still puts you ahead of most newbies. It is common to lose nearly ALL of your trades at first. But if you trade this simple strategy like a machine, no emotion, no freestyling, you stand a fair chance of at least hanging on to your account, and having a bit of fun while you are at it. Be sure to practice with your paper trading account before going live. You need to be very comfortable with the strategy and its implementation, and with the controls of your platform, so you don't make any stoopid mistakes. Make sure you have a wired keyboard and mouse, not wireless. Make sure you have an alternate internet connection, such as your phone, ready to go. This is a very rough and ready strategy with a lot of serious shortcomings in it. You can refine it later, if you like. Make your bones with it as is, though, and if you can avoid the temptation to freestyle it, you just might make a little money. This play is something to build upon, not make a career out of. Its only saving grace is that it is simple. The only poison in the pill is that sometimes you don't get the opportunity to move your stop up above break even to lock it into profitability. And you will make about half what somebody else might make on the same stock, following a tighter, more refined strategy. If your screener doesn't hand you a potential winner, don't play. It's that simple. There will be other days and other plays. <EDIT> I forgot to mention, your Bollinger must be trending UPWARD. If Bollinger heads for the bottom, bail out.
Actually...I did not know what we both know now. Simply, you did not make that info available in this thread until now. Others have made recommendations or given specific advice about what route you should take involving technical analysis. A few have spelled it out in detail in a single message post. They are the ones you should then seek constructive criticism considering they seem to be willing to give you specific TA advice although I'm not sure if they are willing to go as far as to give you a complete trading plan for trading stocks. Yet, you can always explore how far they are willing to go with you via private message...no harm in trying...right ? I will say this...there must be a specific reason why you're using RSI, On Balance Volume, Volume, Price Moving Averages and ATR versus using other types of indicators. Thus, you must have seen value in them versus less value in other indicators. Also, I'm sure you've must have heard by now from others to backtest those indicators prior to using real money trading. Next, simulate trade to give yourself some clues about your application. TOS does have a simulator account...no excuse about why you would skip the simulator to determine if you're profitable via those indicators on a simulator prior to jumping right into real money trading. Continuing my recommendation...use ET search function (located in the upper right corner) to find traders using those specific indicators. Share with them the specific details about your trade strategy involving those specific indicators, share with them your broker trade statement with timestamps of trade fills so that they can evaluate how you're using your indicators versus what you're actually doing in your trading with real money on the line. You've now share that your stats are not good but there's still no details about the stats. Heck, you couldn't / wouldn't even answer the question about the number of trades you've taken so far...5, 10, 50, 100 or what. Why would I ask such an easy question to answer ? It will show how willing you're able to provide info about something that's so easily available to the trader of the trading account and show how likely you'll withhold other info from those that actually want to help you. Therefore, share with them the details about your stats too so that they can determine if the problem is your stats and not your strategy or maybe the problem is not the stats nor the strategy but its you (your application). If you don't have the stats...get them. The big question, maybe mute now...why are you trading with via those indicators if you don't have backtest results to show you have an edge ? What I'm saying is that their are two critical types of statistics: 1) backtests 2) Actual trading results If your backtests are poor...you shouldn't be trading. Yet, if your backtests are good but your actual real money trading results stats are poor...the issue is you. The good news...trade strategies can be fixed or adapted. The trader is a more difficult problem to fix if that's the primary problem. Hopefully the above info is more helpful and I hope you'll use Elitetrader.com search function to find traders (there's many) using those indicators that may willing to help you. By the way, I know TOS (thinkorswim) program and they have education info and chat rooms...have you explore that to find someone to help you with those indicators ? Good luck wrbtrader
That was an incredible piece of advice I hope to be able to pay it forward one day! thank you for taking the time to explain that was a perfect way for me to start examining what Im doing!
that was incredible advice as well, as soon as I can figure out my stats I will post still leaning. i've traded about 800 times in paper trading account which im up 12K on the year and around 200 times real money which i'm down 4K this year, alot of it having to do with me just not holding long enough or maybe taking too big of a position! thanks for the critiques and advice i will post shortly my stats once I can figure them out!
BTW what are you using for a screener? Without a decent screener you are just fumbling in the dark. You need some sort of screener to put you onto stocks in play. Don't rely on tips! If I want to put more buyers on to a stock that I already own, that I bought while it was still down in the dirt, what better way than to broadcast a tip to a flock of faithful followers? And naturally I will sell before the thundering herd does, and take my profit. This is especially true of low float stocks. A tip from an acknowledged guru in a busy chat room can generate a lot of sales, so a lot of volume and a nice price move. Works on short, too, not just long. Sometimes a fresh tip from a popular trading icon can make you some money. You can scalp that tip hard and it is risky, but you can make a little bit if you get in as early as possible and get out before the panic stricken stampede to exit. But the real money was made by the guy who put out the tip! By the time you get onboard, it could very well be too late and you can lose heavily. Find your own stocks. And to do that you need a screener. I use TradingView. Trade Ideas is pricey but popular. Maybe give it a miss until you are already making decent profit. TradingView has free trial and the paid version is not so expensive. There are many others, so just pick one that is popular on this forum, if you don't already have one. My trading platform has very crude screening built in, as do many others, but mostly you want a stand alone screener to put you on the nuts. So what are you using already? Anything? A really good trader can trade almost anything and at least make chump change. But even the best trader is going to do orders of magnitude better if he picks only the best stocks to trade. A beginner doesn't have a chance unless he can pick good stocks. Learn to use your screener! Otherwise I can almost guarantee you will fail. Trying to trade mediocre prospects will eat you alive. Someone on a razor forum asked me how come he bids on ebay and bids and bids, and always ends up paying too much to get the item he wanted. I told him that when I bid on vintage razors or associated items, I figure if I am winning 10% of the auctions I enter, I am probably bidding the right amount. If I win more, then I am probably bidding too high. If I never win ever, then I am bidding too low. You got to skim the cream. Same with a beginner trying to make serious coin in day trading. You want only the cream. If you are finding setups every day that look good enough for you to trade, then you are probably not being picky enough. If you are selective enough that you are only trading every other day or every third day or so, you will probably be in a better class of stocks in play. Don't be desperate to trade every day. Not just any old day will hand you the nuts. If you go a week, even, without seeing something to trade, that's okay. Hold out for the monster setup and you will up your game. My first day of live trading was my best, so far. I made well over $800 even though I had only a $10k account and was limited by PDT in my trading, and trading with perhaps undue caution with small position. This was a stock with moves that ANYBODY could have traded, almost by just selecting entry and exit at random. Of course it could have turned against me at any time, but it didn't, and the initial setup indicated that it was a great bet. Because that first stock looked so good early in the day, a monster herd of traders thundered into the picture, volume went crazy, the stock flagpoled like an unstoppable juggernaut. You want that cherry setup not just because it looks good to you, but also because it looks good to several thousand other traders all over the world, and that kind of demand will move the price to the moon. The more that the public expects a stock to rise, the more it rises. The more it rises, the more an amazed public expects it to rise even more. Until finally buyers get tired or cautious, and give up and join the sellers and take their profits. All you have to do is get in fairly early, and get out as soon as it weakens. The longer you are on the bus, the more coin you make. So now maybe you see how important your screener is. Whatcha using now? Inquiring minds want to know, and maybe help.
when you use daily for trading , if you enter a position, where exactly do you set up stop loss, if you set any. I assume it would be very generous stop loss of atleast 30-50 points ( trading ES), am i correct in that assumption, taking into account ranges these days. i am trying to transition into swing but the stop loss criteria, am still a bit puzzled by how to go about it. Even if you make a calculated entry at certain levels but how large should be your stop loss.
You can certainly use TA to identify support/resistance levels. You might even accept daily highs/lows as sufficient for this, likewise Fibonacci, round numbers etc. I have been using a multiple of ATR over 20 days so that I doesn't get stopped out by "noise". You could use an ATR multiple as a filter to ensure your s/r level SL or whatever you designate is not too close to entry. Now I am using 3ATR20 as the initial SL. This is so far from entry that it rarely gets hit. I usually exit positions long before the SL based on weakening trend TA. With such a wide SL it is vital to size positions according to how much % of account capital you are prepared to risk.
my pre-market screener Im using marketchameleon.com, Investing.com, Marketwatch, and Nasdaq.. I usually compare numbers and premarket movers to see which ones are nailing 3 out of the four. than once the bell opens think or swim has a scanner I use, Finviz, I use Investing.com, and barcharts.com screeners.. I would definitely upgrade my screener If i knew a better one to use! I will definitely check out Trading View!