Since I wrote it to him I decided to publish it, I'm sure there are many out there that may find it helpful.
For Yeremiya ,
I analysed your trades since you are my good friend. You ignore Modern Rock's simple approach to trading, and you think MR is just some dude who lives of of his rich g-friend and poses as trader, besides the fact that MR does not charge any fees for his teaching and he has nothing to gain from his zillion followers. I just try to help my friends in their trading. if they do not know MR personally they know me so I may be more tangible.
They can learn from my mistakes which I document and read every day . Now I will put my trading public so I feel more responsible and hopefully will reduce my mistakes and increase my discipline.
My belief is : To be profitable in trading you need to
For Yeremiya ,
I analysed your trades since you are my good friend. You ignore Modern Rock's simple approach to trading, and you think MR is just some dude who lives of of his rich g-friend and poses as trader, besides the fact that MR does not charge any fees for his teaching and he has nothing to gain from his zillion followers. I just try to help my friends in their trading. if they do not know MR personally they know me so I may be more tangible.
My belief is : To be profitable in trading you need to
- Trade big % movers
- Stocks that are in play trading on above average volume
You traded these 11 stocks on Friday Jan 30, 2015
TSLA, AAPL, QQQ, BABA, FB, MO, KMI , TWTR, HUN, MNKD, and GENE
TSLA, AAPL, QQQ, BABA, FB, MO, KMI , TWTR, HUN, MNKD, and GENE
10 were on just regular, average ATR, regular average volume .. except GENE
NONE had any big above average move , and NONE WAS in play ..
ONLY the 11th stock GENE was worth trading
Look at the daily move yesterday, Jan 29, 2015 !
Huge ! way way above average range !
You made profit on 4
BABA GENE HUN FB
So lets look at percentages:
From 10 non big moving stocks you made money on 3 !!
ONLY the 11th stock GENE was worth trading
Look at the daily move yesterday, Jan 29, 2015 !
Huge ! way way above average range !
You made profit on 4
BABA GENE HUN FB
So lets look at percentages:
From 10 non big moving stocks you made money on 3 !!
Its great that you trade microscopic size , Id recommend small size to any new trader.
Why bother losing more anyway when you are not consistent ??
Make $1 green day but consistently until you increase size.
Yeremiya;s Friday Jan 30, 2015 PnL
(Those who laugh on his size , keep laughing!)
So you had 30% winning ratio!
You won on 30% and you lost on 70% of all your random stocks
with regular trading range and regular volume
From one big moving stock you had 1 winner
That's is 100% win ratio.
So if you avoided all non movers you would have 100% winner and green day.
From one big moving stock you had 1 winner
That's is 100% win ratio.
So if you avoided all non movers you would have 100% winner and green day.
One Trade but 100% green day!!!
Now: Why you wanna avoid non movers?
Simple:
Now: Why you wanna avoid non movers?
Simple:
Regular average trading stock trends 20% of the time.
The entire stock market trends 20% of the time.
Non moving stock has way more chances to chop you.
Because it has no momentum!!!
Momentum is what ALL DAY-TRADERS NEED
Big move in one direction with less choppiness.
Only then you can be wrong and lose small almost instantly if you are wrong
Non moving stock has way more chances to chop you.
Because it has no momentum!!!
Momentum is what ALL DAY-TRADERS NEED
Big move in one direction with less choppiness.
Only then you can be wrong and lose small almost instantly if you are wrong
and make a lot if you are correct ..
Momentum will give you big gain and if you are wrong you cut your loss very small.
Momentum will give you 1:2 1:3 1:4 or more / risk:reward /
If you only watch few stocks that made big move previous day , or catch a big mover the same day , you can have favorable momentum ,and good Risk:Reward.
Momentum will give you 1:2 1:3 1:4 or more / risk:reward /
If you only watch few stocks that made big move previous day , or catch a big mover the same day , you can have favorable momentum ,and good Risk:Reward.
Now I will send you few photos of Momentum stocks on Friday
$GURE
So, we know what we are looking for:
BIG % MOVER !!!
There are few, not that many every day!!
That is the greatest !!!
It is very easy to find them, right?
Can the "Force" * stop you from finding them ? NOPE !
So you look at all biggest movers all the time, and put them on watch.
If you had GURE on watch, you didn't have to chase it for long !!!
Just had to watch it !!
If you did , you would have seen:
It went almost parabolic to 2.88 a swing high from March 2014!!! To the penny!!!
So, we know what we are looking for:
BIG % MOVER !!!
There are few, not that many every day!!
That is the greatest !!!
It is very easy to find them, right?
Can the "Force" * stop you from finding them ? NOPE !
So you look at all biggest movers all the time, and put them on watch.
If you had GURE on watch, you didn't have to chase it for long !!!
Just had to watch it !!
If you did , you would have seen:
It went almost parabolic to 2.88 a swing high from March 2014!!! To the penny!!!
If you wanted to risk more you could have shorted some smaller size over under 2.88 - 3.00 area but there were no lower highs and no lower lows yet. So you may just watch and wait till:
1) makes lower highs
2) confirms with lower low.
2) confirms with lower low.
The move is so big that it was very easy to recognize lower highs and lower lows! 5 min, 3 min 1 min chart. It is extremely hard to do this with average moving stock, traded by HFTs and market makers who are there to collect your money.
Confirmed lower low was the break below 2.30 area drop to 2.10 ..
>>>YOU DO NOT CHASE THIS DROP! <<<
Take a deep breath and do not get excited that you may miss the move down.
Remember: If you miss the move, you didn't lose !!!
You wait for pull up. At some point must make a pull up ! That's guaranteed !!
You wait for pull up. At some point must make a pull up ! That's guaranteed !!
Even if the drop is huge, pull up must happen!!!
Where ? 2.30 is ideal , because 2.30 was prev support so you watch to see if it will become new resistance.
You watch time n sales prints, see the size trading around 2.30
Is there more size printing on 2.30 on ask or more on the bid .. How does it hold the 2.30!!
Where ? 2.30 is ideal , because 2.30 was prev support so you watch to see if it will become new resistance.
You watch time n sales prints, see the size trading around 2.30
Is there more size printing on 2.30 on ask or more on the bid .. How does it hold the 2.30!!
Where is the next tick after the big size prints? In which direction?
Is it just picking or holding certain price? Are the Market Makers stacked? Pay more attention on the prints , with time you will understand how the L2 works, how the market makers play the game.
1)Lower highs
2)Confirmed with lower low
3) on huge parabolic mover ( you see the 3 elements???) The big % move is the key !
You know the odds for short are pretty much in your favor.
You short against 2.30 .
2.30 defines your risk and take profit 1:2 or 1:3 !!!
Either take all profit or size down lock in gains !!!
You may have a loser , but if you did the same at regular trading range stock you
Either take all profit or size down lock in gains !!!
You may have a loser , but if you did the same at regular trading range stock you
will get chopped many more times then on GURE..
(30:70 win: loss ?? sounds familiar from above ?? )
Now if you just do this with big movers and eliminate all kind of trading on regular stocks
Now if you just do this with big movers and eliminate all kind of trading on regular stocks
you can guarantee yourself 50/50 win : loss . With time will get better and you will see what works better.
Yes you will will get stopped , but not CHOPPED OUT many times !
(My worst loss was trading BAC , trying to break 9.50 on a regular dull day. I went in and out so many times, that I Lost $7,000 in one day plus few Gs in commissions, being stubborn on that break out , up n down , up n down. It was "The Force" fault , ye sure !!!)
Just like GURE , it was the same with $GENE on Thursday and Friday
Yes you will will get stopped , but not CHOPPED OUT many times !
(My worst loss was trading BAC , trying to break 9.50 on a regular dull day. I went in and out so many times, that I Lost $7,000 in one day plus few Gs in commissions, being stubborn on that break out , up n down , up n down. It was "The Force" fault , ye sure !!!)
Just like GURE , it was the same with $GENE on Thursday and Friday
GENE intraday on Friday 5 min
GENE daily big above average move prev day
And same with any big mover
Big mover = Less choppiness
Big mover = more momentum
To conclude:
What do you need to day-trade short:
1) Big Mover !!!
2) Sign for weakness
3) Some confirmation , either lower lows or hitting some major daily resistance for risk definition
Keep It Simple Stupid KISS !!!
Do this for a month and if you are still losing then "The Force" that is screwing up your trades
really exist !!
*"The Force" is his higher power that makes him lose all his life on anything he does
The question is : Is it "The Force" that takes his money or his (ours) own stupidity ?!?
Or maybe "The Force" makes him do the same thing over and over again ?!?
