How to Scan for Stocks

This may help some  new traders who have been asking me how to find good movers. However learning this , is not a guarantee that money will be made easily from trading. It takes extreme discipline to consistently do the right thing.

To understand the concept of finding a good moving stock lets look at few charts in hindsight first.
What is common for all these movers: The strong above average volume. The volume is fuel to move the stock just as more fuel is needed to move the car over the hill.
Fact is any stock that has nice intraday move could be tradeable,( speaking of daytrading)  such as for instance a stock that has ATR of $1 or bigger. It can be nice directional move or it can be choppy. To make money in directional-momentum move seems to be easier , although making profitable trades in choppy stocks is also possible by implementing tactics which requires different approach ( almost 180 degree opposite approach of the trading the momentum directional move )

The factor here is THE RELATIVE VOLUME. The relative volume scan is available almost on any scanner:  TC 2000,  Finviz,,  Trade Ideas and so on.  Besides that, The variable ( in this case the number 3 )  shows how many times is the current volume at the current moment higher then the average volume that symbol normally trades for the past 30 or 90 days. Each scanner is little  e bit different, with some  you can define it yourself, and some are pretty much fixed on the last 30 days. The bigger the number  is the bigger the relative volume is at the current moment. I look to have at least few hundred thousand shares traded in the first few minutes, or in the premarket, For example: there may be a stock that average volume is only 50,000 per day. Today may trade at 500,000 shares all day which is 10 x the average volume. This stock will not satisfy my criteria to trade it simply because it still has very low liquidity for the day. So I need to have at least couple of hundred thousand shares traded the first few minutes so I can actualy have enough liquidity to trade large size in and out quickly.   So I set the scan like this:

It is simple and clean. Now it is all up to which stock  I select to trade. Quick view of their daily chart helps a lot in finding a stock with the least resistance above ( if long ) or below ( if short )

You can either scroll by hoovering above the symbols or click chart view which will display all daily charts. 

From here it is all about focusing on only few, the ones that you may think are the best,  since trading everything is not easy at least not easy for  me. I'd rather stalk my symbols for the day then jump on many new ones just because I had to take some losses. Weather I will just get in and trail the stop as the stock moves or I sell the pops and buy the dips , it all depends  on how the stock is trading. I love to only trail the stops below. but there are I think more cycles when it is better to sell the pops and re-buy the dips.

Hope this may help.

Have a happy trading

AngelDan@DaChopa

New Trader Exercise WHY WANTING TO LOSE

Probably one of the biggest challenge a new rookie trader has to face is ACCEPTING TO BE WRONG and CUTTING THE LOSES SHORT.

It is easier said then done which is very natural and normal for any human being. To easily admit to be wrong and instantly reacting on it, is simply not built into the human nature, period. So if you are a new trader, and you are struggling to make any money because you are not consistent with obeying your stop losses, do not feel bad. It is very normal and very human.
Developing a discipline to admit that you are wrong and acting upon it, is not a skill you can obtain over night because you just decided to quit  your job and became professional trader. Learning or defining certain rules to trade is the easiest part. Anybody can learn it by reading few books or even by just reading my blog. But why not everybody can make money trading? And why not everybody can simply decide to obey the stop loses and became successful trader instantly?

Learning is the easy part, but becoming successful trader is all about practicing what you learned by doing it over and over again by implementing a extremely high level of disciple. I am referring to such level that is equal to a professional athlete who keeps practicing constantly even at his pick performance.

How do you practice discipline? It is  extremely difficult specially if you have no pointers which direction to take. Do you just decide  and say: "OK I will be disciplined from tomorrow" and expect the magic to just happen...  LOL 

Here is one pointer that may help a struggling trader. I heard it long time ago from a master trader who shared this with me so I share now with you:
THIS IS A DRILL ON HOW TO LEARN TO EXECUTE those darn stop losses that you always plan to take but when the stock gets there you just simply change your entire plan and do something totally different, or stupid, which  one day will cost you your whole acct.... if it hasn't happen yet it will happen guaranteed and you can take this to the bank. 


Let's assume that you know to pick good entries,  the easy part that everybody can learn quite quickly anyway.. 
For  ONE WEEK YOU MUST IGNORE ANY THOUGHTS OR NEEDS OF MAKING MONEY ! 
Instead of focusing on "HOW MUCH I CAN MAKE" you will focus on:
 "I WANT MY STOP TO BE HIT ASAP AND I CAN'T WAIT TO EXECUTE IT"
And every time you execute your stop you will give yourself  one reward point. Your goal is to accumulate as many award points as possible by the end of the week. 20 would be a great number to achieve. However you must collect 20 points by consistently obeying all stops. If you disobey ONE STOP even if the price afterwards goes in your favor YOU FAILED ! Start from zero again. Remember: doing 20 in a row is of essence for a reason. The winning trades in between are just winners and you do not count them.   I know it sounds scary on a first thought right?  Wanting to lose on purpose? How crazy this is? Why would I want to lose on purpose??

BY FOCUSING ON THE:
"I WANT MY STOP TO GET HIT !!! "  You WILL NOT ACTUALLY MOVE THE STOCK TO HIT YOUR STOP!!! You ARE NOT ABLE TO MOVE THE STOCK ANYWHERE!!!! Regardless of what you think, what you want , what you wish , what you think you can predict, or what you actually do, the stock price will move UP or DOWN  and there is absolutely NOTHING you can do to change that. ( Unless you are Martin Shkreli and buy the entire float and move the price from $3 to $54 in one day ) 


By focusing  on "I WANT MY STOP TO GET HIT !!! "  you will ONLY MAKE SURE THAT IF THE STOCK GETS THERE YOU WILL 100% execute your stop simply because you set your mind to WANT TO DO THAT , and you will protect your acct  from potential blow off. 

 After completing this exercise SUCCESSFULLY  you will never be the bad old trader you always was: THE STOP LOSS DISOBEYING GARBAGE TRADER .

Now get this question  into your mind : ":Do  you really think  that after you enter a trade just by WANTING TO LOSE ; THE STOCK WILL ACTUALLY HIT your STOP???
How often when you entered your trade,  you WANTED TO BE A WINNER but it just went totally against you? How often it went to your planned stop loss area that you did not want to happen? And how easy was it for you to execute that stop loss that you DID NOT WANT TO HAPPEN?
This is very serious mental game no joking !
YOU HAVE TO WANT TO HIT YOUR LOSS SO YOU CAN EASILY EXECUTE IT RIGHT THERE WHEN or IF the price gets there.


If you DON'T WANT YOUR STOP LOSS TO BE HIT , and the stock goes there , DO YOU THINK YOU WILL BE ABLE AND YOU WILL WANT TO EXECUTE SOMETHING THAT YOU DID NOT WANT TO HAPPEN IN THE FIRST PLACE ???

It is extremely hard to execute something that in first place you DID NOT WANT TO HAPPEN !!!  Do you agree now?

SO YOU MUST LEARN TO WANT THE BAD THING TO HAPPEN SO YOU CAN EXECUTE  your plan WITHOUT ANY SECOND THOUGHTS when it happens !!! Ok?

This is the $1,000,000 post that  you may want to save print and read every morning before market opens.   

Try for  ONE WEEK to IGNORE ANY THOUGHTS OR NEEDS OF MAKING MONEY!! 
Limit your size accordingly to the amount you "WANT TO LOSE" comfortably AND LETS SEE WHAT HAPPENS. Again, this is assuming that you already know what are good probable entries where you have an edge. 

Happy Trading and if you want to drop a line how did this exercise go,  that will be great to see .

AngelDan@DaChopa

CLF retro from the post made in 2015

CLF

A buddy of mine hit a nice swing home run on CLF. Up 25 % in profits

If you are not sure what to do and you are in a nice profitable trade , check or even better  ASK the price action for an answer  : this is the simplest explanation and it works for me

• HIGHER LOWS 
• HIGHER HIGHS 
• --------------------------  OR ?
• LOWER LOWS
• LOWER  HIGHS

Click on the pick from your PC to magnify and use arrow keys to move to next pick
CLF is big % mover so looking at intra-day action is important since big  % gains / losses may occur withing a single day.

 

CLF

CLF

CLF

CLF

CLF

CLF area where it shall not go to stay long and strong

CLF where will it go from here ?

CLF 

If a trader happen to exit long position at 3.10 lower low, for establishing re-entry may help figuring out the next higher low higher high with risk below.  Fundamentals can be great but stock may drop lower before it gets higher. Why? Well, if fundamentals are great , the big boys would like to load up on lower prices, they will probably NOT CHASE the highs buying the  break outs, rather will be buying into the pull backs.

CLF right now is trending stock with very clear price action 

This happens with the markets 30 % of the time 

The other 70% of the time markets are choppy and non directional 

While 90 % of traders look for the directional trades ONLY , the 90 % of the traders ( or more ) lose money.

Stock will always make pull backs

If it makes new high I would not chase, I would  wait for the pull back , make sure the pull back is establishing higher low, and re-enter 

If you do not take some profits after great 25% move up in gains, and let it go back in negative , you will eat your hart out

It is just my opinion , been there done that , felt a lot of pain 

This is the post from March 2015 about CLF click here

Salute 

@Da Chopa

Trading Big Boards Concept Simplified $AAPL $ABX

I alerted  long ABX here and long AAPL here  for a reason.
Preceding to those alerts,  I mentioned about the SPY futures ( E-mini) very early pre market  alerted here. SPY futures  were testing very important daily pivot level above the 50sma, with  pin bar test and  held the 50 sma,  well and above the 20 sma, quite a  bullish environment on short term outlook.

Few reasons why I like the big boards over the penny stocks :
1) Extremely huge average volume meaning  very liquid to trade any size I want, any time,  any day and almost any BB stock. ( that's why I don't bother much with scanning and finding the perfect Holly Grail Stock to trade)
2) Quite easier to see and predict the general bias based on few very simple technical parameters mentioned many time in my prior blog posts.

I will  repeat them today again, since I know the pain and suffering many new traders go through. Been there done it all and I know how it hurts.


Why ABX long?
Look at the charts:  Daily,  5 min ,  and 2 min

ABX I alerted it before this was created

ABX the trigger for long

ABX explained 

Why AAPL long ?
Same reasons as ABX

AAPL the long as alerted

AAPL

Today I traded my buddy's acct who was begging me to show him how it is done and who always wanted to make $2,000 per day  with $30,000 acct and $120,000 Buying Power. ( so there are other trades in the PnL tiny scalps but they DO  ADD at the end of the day ) .  BTW he lost over $10, 000 trying to do so in a very short time.  

Is it possible to make $2,000 to $3.000 a day with $120 ,000 BP? Theoretically yes!!! , and I have done it many times but on long run I kept being a loser just like he went down.  I decided to stop the insanity and to be realistic. Spent long long time trading small, very small.  Making $100 to $200 a day with $120,000 BP is what I firmly believe in ..Everything else is LUCK  and that is my opinion. There might be traders there making a killing with $30,000 and I will be glad to follow them on daily basis and very closely to  see what exactly they do, but I doubt there are any , and if there are any,  their luck will run out eventually, This is just me , but hey what do I know ?!?.

I know one thing only : THE LUCK DOES NOT RUN INTO MY VEINS.

I can also say: beating the sharks for $100 each and every day with $120k BP is HUUGE !!!

I may be off  from twitter for a while,  helping my buddy to put him on the right track.

He wants to quit his day job so badly LOL

Have a great week all :) 

@DaChopa

Red Day $WMT

WMT
This was a good losing trade, per plan, without any improvisations to bail out by forcing trades.

WMT

Markets opened in green,  were pretty strong.

WMT gave nice short at 2 min and 5 min opening range break down short , but having the green markets I did not go for the short.

Watched the dive all the way down to the whole number 67.00 into the 200 sma on 5 min. so took the long in anticipation to re-trace 50% into the big opening  drop. 

But it was hammered down by sellers on any attempt to go above 67.20.

The 20 sma cought up with the price ( the price did not bounce to catch up with the 20 sma) so it gave a good short which I did not want to take just because it already had quite a big over-extension of 1 ATR. So not big deal there will another trading day.  I'd rather have these controllable losing days within the normal limits then the huge  PnL swings. 

WMT 5 min risk level 

WMT anticipation 50% entrancement bounce 

WMT creating higher lows

WMT   eod
Once the 20 sma was touching the price, it was a great short set up but simply I did not take it because it was already overextended, SPY was green, so I was cautions not to get cought in a squeeze.

SPY all day in green Will 195 hold ?

Have a great weekend 

@DaChopa

Green day FSLR WMT

Somehow I managed to take a loss on WMT , got too greedy adding more into the short winner that was up nicely

WMT

I shorted at 67.80 or so , after the field attempt to go above 68.00 daily pivot

Never took any profit and shorted more after the bounce up and had to take a loos

WMT

. 

FSLR was a text book long

I was looking of for gap ups to short but happen to see FSLR sitting nicely on   a lunch bad

1. Was up above PDC
2. above 200 sma
3. above rising 20 sma
4. 5 lower highs of 5 min candles into the rising 20 sma
5.  this is Long with size and stop below the 5 min candle
6. Had room to give 1:2  R:R to the daily pivot high 72.00 
7. The short was right below the daily pivot 72.00 break below the 5 min candle with stop above 72.00 HOD   this time I took profit 

FSL

Have a nice weekend 

@DaChopa

Shorting Against Daily Resistance Green Day TGT

TGT

TGT
Even though it bounced of the 200 SMA and showed strength above the 20sma  above PDC, I did not want to go long since the markets were all in red. It made full ATR in the first Half an Hour , so I was looking to short against daily resistance 76.00 with conviction it will be hard to break above today's high..
Hammered the pops sold at ask , placed orders to cover at around 75.00.

Then there was some news , or HFT's attacks happen, TGT  went wild but having the orders placed AHEAD with A PLAN it was just perfect play.

TGT perfect 50% retracement

TGT some of the sales 

TGT some of the covers

SPY   eod

TGT eod

Salute 

@DaChopa

One Stock, One Set Up, One Green Day FB

FB

I twitted FB long here and here because It had a very clean price action , which  in no way means it always works but in my opinion is quite better odds going long rather then short.

1. Coming out of daily congestion above all SMAs on daily 
2. Above the SMAs on intra day 
3. Above PDC 104.50 and PDH 105.00

Strategy No. 1 with a tight 2 min candle stop :

Just reading the highs of the 2 min candles it triggered long after the second 2 min candle with  stop below the same candle. This is when trader would get with size immediately ( which would not allow to built if it   drops towards 105.00 because size will cause  too big of a draw down)

Strategy No. 2 with wide stop below PDC or PDH  :  

If was drooping towards 105.00 building a long on the way down , but starting with small partial size that trader can calculate according to own risk tolerance if the price went in stop loss territory.

FB 2 min long trigger  risk below the 2 min 

FB  risk reward 1:2

FB 5 min chart 

This was the second long entry on break of of 5 min  candle high after 3 candles LOWER HIGHS pull back. 

FB 5 min take profit area 1:2 R:R

FB eod   5min

Have a great week 

@DaChopa

Updated Green Day QCOM to "What do you see here ? SSO SPY"

SSO SPY and many other stocks doing the same 

SSO

1.  PDC resistance
2. 20 SMA resistance
3. 200 SMA resistance
4. Previous day congestion resistance 

Where is path of least resistance?
Build short into the move up with stop above PDH
Reading the candles near the "stop area " is crucial to recognize fake stop out.

Have happy Friday

SSO 5 min

SSO 2 min

SSO broke the 2 min low instead of moving up from the open.

I was expecting to try to fill the gap off the gate and short into the 4 resistances explained above.

However it made an  initial drop and created  double bottom then moved  up into the 4 resistances later in the day..That was no play for me .

I set on my hands and spotted QCOM moving nicely up tempting to go long, but I just could not do that after 4-5 days up

QCOM

The reason for this short was failure to hold PDH , daily over-extension,49.50 round number as resistance   

QCOM 5 min 

I was anticipating a large probable drop due to its overextended daily chart, and I  really wanted to drop down to the 200 sma and HAVE A HOME RUN . I had a great short entry at  49.16 great risk reward,  took some off with profit but left most of rest  at break even and of course NO HOME RUN. I was sooo sure it will roll over to 48.75...then to 48.50... I totally ignored 48.80 daily pivot at which by just simple reading of the price action which was  taking the high of the last red candle, I should have closed the entire position, but got greedy.

So now we know that 48.80 has been tested , will trade that line on Monday 

Have a great weekend
@DaChopa

Green Day QQQ FB and update to the "Plan for Feb 18 $SPY"

This was written last night:
SPY
This is what we see now.

SPY  2 min 

SPY is near by major resistance 195.00 . Let's see where it will be in the PM.. This will be related to any Big Board Stock not necessarily only to trading the SPY or SSO.  

Scenarios:

 1) SPY gaps down we will have PDC,  200 sma,  20 sma,  Prev day congestion area of resistance above. This will be short build up into the move up towards those levels and stop above PDH 

2) Opens gap up : it can be right into 195 resistance, so  2 min candle open break down,  short the break stop above the 2 min candle. I would take 1:2 gain but will definitely leave some in case it crushes way lower 

3) Opens above PDC,  above 200 sma, above  20 sma. That will be long,  but I will not go long it is just me, it may go 10 or more days up we never know that , but after 3 days up I feel uncomfortable going long

This is all planned based on 2 min range from the open and may change later into the day using 5 min or even 15 min candles is very possible, depending on the stock and the way it trades. 

This is my plan and who ever trades they shall know: trading is risky and nothing is guaranteed. Losses can be bigger then what you actually have in your account  , and 

YES,  YOU CAN LOSE EVERYTHING !

Salute 

@DaChopa 

**********************************************************************************************************************************

NVDA   I'd short 2 min open break down stop above  

WMT    I'd long 2 min open break out stop below

Both are far away from 20 sma

On both targets 1:2 or 1/2 of the gap and would leave some for more to maybe fill the gaps

FB coming out of channel 2 min open break out for long, It is above

1)  PDC 

2) above 20 sma 

3) above 200 sma on 2 min chart 

They all act as support will not fight them if trades below and WILL cut losses in such case 

FB  at 105.70 mail line to trade long above 2 min break 

What really can change all this is the range of the 2 min opening candles , they may be too big, but we ll see

**********************************************************************************************************************************

THIS WAS WRITTEN TODAY :

UPDATE DURING TRADING HOURS :

NONE of the planed set ups triggered ..frustrating right ? None of the 2 min opening candles were broken in the direction I planned to trade 

FB Seeing it on daily there were possibilities to come out of the daily channel and move up, being a laggard in this crazy market rallying with gaps up 3 days in a row (SPY). So why not trade  FB long?

The opening 2 min candle broke down, falling right into the previous day  close, the  20sma  and above the 200sma, First 2 min candle break above was a trigger long 105.30  all twitted ahead of time CLICK HERE. Risk below the same 2 min candle twitted HERE and FB stopped out with a 30c loss saving much bigger losses twitted HERE

Now seeing FB failing a clear long set up, did not make me feel comfortable shorting it just because it did not have many days overexertion like the QQQ. I was afraid It may come back up and start chopping which would piss me off and who knows what else I may do after. Dr. Jekyll and Mr. Hyde that's me when I trade and I bet bet many of you. I may preach all the good stuff but I may still do the dumbest things out of frustration.  

FB 2 min trigger long off of 20 sma  PDC over 200 sma

FB the failed long GOOD LOSING TRADE per plan 

FB How much the stop loss saved me ? 

GOOD TRADE !

QQQ

However failing FB long gave me some confidence to short QQQ. There were many other stocks doing similar thing but it doesn't really matter,  all it matters is to make few bucks from any symbol. SPY rolled over the 200 and 20 after so many days above them AAPL was weak. So why even bother be in so many trades , I used to do that but at the end of day it doesn't matter to me. 

QQQ droped below the 20 SMA  and risk above 102.50 was something I could handle and I was in totally in peace if the 102.50 got hit. That would be pretty good sign for me to give it up today and I promised myself I will not trade today any more  if it gets hit.

Twitted HERE the short entries 

Twitted HERE why I was shorting QQQ

Twitted HERE the confidence from SPY roiling over 

QQQ building short on the way up with stop 102.50

QQQ covering  for profit

I wanted to have 1:4 risk reward , but was just dropping too slowly and after taking half off with  36 c gain which is more then the 25c I risked.  I covered the rest on the 5 min candle break ou 101.86 or so.

I mentioned in this TWIT HERE the QQQ ATR. One of the reasons why I like the Big Boards is that have very well known range  THE ATR google it HERE . They are not like many penny stocks, or low floats who can trade on any quadruple or more range range at any time on soem news , or pump or so  I am not saying it is impossible to trade them, but I find great comfort in equation where I have one variable well known:  the ATR, and that is pretty much firm number on the big cap stocks

I built 2,000 shares QQQ  short average 102.26 covered  1,000 at 101.90 and 1000 at 101.86.

That was all for today.

This is not easy ,but do not feel bad if you had red day. I've had years and years of pain losing. I bet you have not lost more then me.

Find one set up you may feel comfortable with and try to do only that one for several months with very small size. Trading can not be though or learned by reading any book or by reading my journal. It can be learned only by doing it .Know you will lose , so do it small before you see, you feel and you know you can make green days consistently with "your eyes closed"  

Too bad none of the 2 min open today triggered so I could not show you  how you can end the day in 30 min green and close the shop till the next day. 

Salute 

@DaChopa