Day Trading in General

[DutchDandy 10]

Hi all,

 

I am new on this forum, but I have been around the stock market for over 10 years now. I used to play the hypes, like shortening financials during the credit crunch and shorting FB . BUT since a couple of months I am busy developing my own day trading style and for me focussing on the momentum is a great help when going long.

 

 

:missy: Have been reading al about day/momentum trading on this forum, but I have two questions that pop-up when I am busy trading small caps.

 

1) I haven't found any good technical analytic tools that are used yet. I use different EMA's to see trend switching, but the signal is mainly too late for my taste... So what is a good combination of indicators?

 

2) Stock scanning, I have a junkmail account to receive al kinds of pumps (good tips are always welcome!), but I would like to have a more active way to scan for good stocks. When using finance.yahoo.com you only can focus on the price gain and I just would love to have a tool that I can check sudden volume increase too. Maybe a alert of some kind?

 

Hope to learn a lot and share my knowledge on this forum.

 

Cheers :helloooo:,

 

Pieter

[henryduncan12 10]

Which technical analytic tools are you using right now?

[DutchDandy 10]

Hi Henry,

 

I use IB and use their study tools.

EMA(9) and EMA(15) to see a shift in the trend (crossing each other)

Momentum(9) to see a difference in momentum.

 

But with these I still don't have a clear indication of the direction of the stock.

 

Cheers

[law6 10]

Hi all,

 

I am new on this forum, but I have been around the stock market for over 10 years now. I used to play the hypes, like shortening financials during the credit crunch and shorting FB . BUT since a couple of months I am busy developing my own day trading style and for me focussing on the momentum is a great help when going long.

 

 

:missy: Have been reading al about day/momentum trading on this forum, but I have two questions that pop-up when I am busy trading small caps.

 

1) I haven't found any good technical analytic tools that are used yet. I use different EMA's to see trend switching, but the signal is mainly too late for my taste... So what is a good combination of indicators?

 

2) Stock scanning, I have a junkmail account to receive al kinds of pumps (good tips are always welcome!), but I would like to have a more active way to scan for good stocks. When using finance.yahoo.com you only can focus on the price gain and I just would love to have a tool that I can check sudden volume increase too. Maybe a alert of some kind?

 

Hope to learn a lot and share my knowledge on this forum.

 

Cheers :helloooo:,

 

Pieter

 

Pieter

 

I use a pnf break out scanner at stickcharts.com

 

Good Luck

 

law6

[christronic 10]

It sounds like you are on track to finding you own style.

 

You say you have EMA's to see trend switching, and you say the signals are too late.

 

There is no perfect combination of indicators I have found, but I know if I want to trade in the direction of the trend EMAs are a good start.

 

I have never found anything to pick tops and bottoms, except on a historical chart when it is of no use.

 

Maybe look in the daily direction, ie EMA's crossed.

 

Then search on lower timeframe for volitility breakout

 

 

You should be able to code for eg

VOL[0] > VOLMA(20)[0] // Looks for higher than normal volume

Close[0] - Open[0] > 0.75*ATR(14)[0] // Looks for bullish volatility breakout

[Tradewinds 12]

So what is a good combination of indicators?

 

I use nothing but custom indicators programed by myself, so can't suggest anything there. And I'm not making any claims that I know anything of value when it comes to trading. But I'd like to share some thoughts.

 

Price, and what influences price can be in sync, or not in sync. When price and what drives price are not in sync, it might mean that there is a valuation error in the market. Price may correct to return to a fair valuation. My opinion is, that traders need to be on the right side of the valuation error. Eg. Overpriced you sell.

 

Short term traders are not reading the financial statements before they enter a trade. It's speculation. So we need something to hopefully give us a clue. I like using upticks and downticks. In other words, up volume and down volume. I look at all kinds of different combinations of the two. I look at just upticks, and just downticks. I look at the net difference: Upticks - Downticks. I look at the cumulative sum: Net = Net + Diff;

 

Whatever indicator I use, there are various things I look for. For example, price drifting down, but there's been more up volume; price and Net Up Volume moving in different directions.

 

If I were to categorize my indicators, it would be like this:

 

Net Cumulative Sum

Strength and Level of each individual bar

Strength and Level of the Wave

 

I feel that combinations of those three categories explain every price move.

 

Those three categories can have many possible combinations.

 

Examples include:

• The Net Level of the indicator could be lower as the net level of price is higher.
  
• The strength on the bar could be stronger than all previous bars, but the actual level is lower.
  
• The strength on the bar could be weaker, but the actual level could be higher.
  
• There could be multiple lower highs and higher lows consecutively, indicating a sideways consolidation.
  
• There could be lots of strength down on the individual bar for the indicator, and very little price move down.
  
• There could be price retracement that looks like a trend reversal, when it really isn't.
  
• There is often a bigger spike in down volume right before a peak.
  
• There can be a big move on a bar, but the momentum is lower.
  
• There can be a small move on the bar, but the momentum is higher.
  
• There could have been a lot of price retracement before a reversal, or just a very smooth, straight move.
  
• There could be very strong momentum indications that the trend is going to continue, but a major divergence between price and the net cumulative indicator.
  
• The indicators could be in sync with price, or out of sync with price.
  
• Some indicators could be in sync with price, and the others out of sync with price.
  
• Sometimes there is less momentum in an indicator at a reversal.
  
• Sometimes there is more momentum in the indicator at the reversal. E.g. Sometimes there is more momentum against the trend in the indicator, then more momentum up in the indicator in the current trend direction.
  

 

Because individual bars could be the same, with totally different results in the price move, I need to determine some patterns that are fairly consistent.

 

I also need to determine the peak is the peak of a price wave, or a peak of the price trend. There are smaller time frame trends inside longer time frame trends. It's easy to think that a real strong move on a short term trend means that price is going to continue, when in reality, it's just the last gasp of a long term trend at it's reversal.

 

Sometimes the market moves in short choppy price waves. Sometimes the market moves in long slow price waves. And the indicator may work well in one or the other condition, but not both.

 

I am always trying to determine whether the indicator is in sync with the price or not. If the indicator is based on something like volume, then you can compare volume momentum to price momentum. If price momentum was down a lot, but the volume momentum didn't even go negative, price may shoot back up.

 

What I'm trying to do is provide concepts that you could apply to whatever indicators you might use.

 

• Net Cumulative Sum
  
• Net Cumulative Sum of Indicator
  
• Net Cumulative Sum of price
  
• This bars change in the indicator
  
• This bars change in price
  
• Momentum of indicator
  
• Momentum of price
  
• Indicator Wave Length
  
• Price Wave Length
  
• Price Wave Momentum to Indicator Wave Momentum
  
• Net Price Level to Net Indicator Level
  
• Price in sync with indicators
  
• Price in sync with some indicators
  
• Price out of sync with most indicators
  
• Indicator patterns
  
• Divergences between price and what affects price
  

 

You can also do things like compare the volume of the stock to the volume of the market that the stock is in.

 

So there. Now that I've made my post maybe I can feel like I know something when I know absolutely nothing. :rofl:

[Mikhoul 10]

Hi Henry,

 

I use IB and use their study tools.

EMA(9) and EMA(15) to see a shift in the trend (crossing each other)

Momentum(9) to see a difference in momentum.

 

But with these I still don't have a clear indication of the direction of the stock.

 

Cheers

 

Most of the Time I'm daytrading and sometime swing over 2-4 days...

 

I try to keep the everythings SIMPLE for my part.

 

I mainly use Tech Analysis with FreeStockCharts.com - Web's Best Streaming Realtime Stock Charts - Free

 

It's easy, fast and real time. You can customize the charts the way you like.

 

Mostly I trade stock on Nasdaq so I always have the NasdaqCompositeIndex on my chart to see if the stock follow the market or drive the market.

 

Also I use MA 200 50 & 10

 

Once I choose an interesting stock and "know"

the trend of the stock (Bull -Bear) I use most often the 1min/chart and look at it live.

 

I look for patterns ( Technical Analysis: Chart Patterns | Investopedia ) and the MOST important thing to detect MOVES or Breakout is VOLUME.

 

If You look just at pattern you will follow the crowd most of the time, If you look at VOLUME you have an edge, cause you can see, and detect the the first bar (1minute) of a breakout or breakdown and go in the trade.

 

 

Friday I was trading KCG, a stock that I have never looked at before, I was just knowing they were down 40% in pre-market, read some news about it, but not a lot.

 

So I have traded all day long KCG with 1 minute to 3 minutes chart.

 

Here is a screenshot that I have shared on StockTwits:

Look at the volume, it's easy to see that a MOVE will happen on any VOLUME RAISE

 

.

 

APPLE on the same day:

 

 

I also take a look at StockTwit feed to see the sentiment and pick-up quickly some news on stock.

 

Also when I target a stock I look a Level2 to know the Ask & Buy ratio this way it give me a clue to know if the price will drop or raise at the end of the pattern. ---> http://content.screencast.com/users/lamote/folders/Snagit/media/4a687fbe-a743-4950-9b19-be2a553c7dc8/08.03.2012-12.16.26.png

 

Also it could be useful to see the "short float" of the stock, this way you can take advantage of Short Squeeze. --> FINVIZ.com - Stock Screener

 

Also with FreeStockCharts.com - Web's Best Streaming Realtime Stock Charts - Free you can program any kind of Alerts for a stock and it scan all day long in real time for what you asked for !

 

 

It's not perfect, but it's the way I trade... ;-)

 

 

Best Regards

[DutchDandy 10]

@All (especially Tradewinds, with that monster post)

 

Thanks for the tips and tricks, I will take a good look at it and set everything ready for monday when the stock exchange opens :missy:...

 

I have been testing all kinds of indicators and if you look at historical data like Mikhoul provided, you can be always right because you can see where the stock price went in the end. ... But I need to know for "sure" where the price is going, and pick the right indicators/assumptions/strategy to go with that. That is why I test everything on my paper trade account with live data, so I can't "cheat" myself.

 

If you take a look at profit.ly, you see a lot of traders making gains on small caps (my favorite are Tim Sykes and FousAlerts), my problem with these kind of traders is that when you want to trade with them you have to pay top dollar and their explanation is always with historical charts (bought all the Tim Sykes dvd's to get a better idea of day trading and yes everything with historical charts).

 

Look-up mister Fous with FousAlerts, as you take a look at his stats:

 

Number of Trades :1035

# Wins: 579

# Losses: 456

Winning %: 55.94%

Avg $ Gain: $865

Avg % Gain: 5.8%

 

You can say he is slightly more right than wrong, yet he makes a lot of money... He uses all kinds of chart patterns, and yet he explains everything with historical charts. Only way to make a solid profit with these kind of "bad" trades, is to cut losses and grow gains.

Now the big BUT, when he has is slightly more right, does the technical approach really work for him?

 

What are your gains/losses etc.? At the end everybody trades sometimes "with" and sometimes "against" the others.

[andysteven 10]

Hi

Friend

You can use this tools i have using these following tools for stock analysis to gold price to market trend here are the 2 examples on the tools that i use for my trading purpose, since my trading portal is so slow and i could not even check the price of market updates very frequently, so any way most of the time i have to rely on the external tools.

www.TwoNaHalf.cOm

as well as

https://www.dynamiclevels.com/

Both of the tools are unique, however i had atalk with mr Arbaj Azi who usually sits in the live chat session, he infact guided me profoundly on using the 2 tool, after doing registration.

[DutchDandy 10]

My main problem with tools like those is that, it becomes a self fulfilling prophecy if enough users are using those tools... :shocked:

(Tried to post some links, but the admin erased those) On small caps traders who don't pick very well, but it seems like because they cut their losses, that they make money.

 

So how to know when to cut your loss and how to become a better stock picker?

 

[AdamG 10]

You won't find an indicator that is 'for sure'. They all lag. The only thing that doesn't lag is price. Nobody knows the outcome once the bet is placed - otherwise we would all be rich. I would suggest that you pick an indicator that you like and learn it well and just use it and current price and volume. One possible slight edge might be to fade S/R levels to maybe avoid some chop. Otherwise its the size and how you bet will determine your P/L.

You can wait for stocks that are moving and have enough volume so the spread isn't too big and you can get out.

Good luck

[DutchDandy 10]

Thanks!

 

I know that you can't know for sure, but as one of the top traders has such a low rate of success with the picks, I am pretty much shocked. I use my paper trade account for some time now and I don't do bad at my picks. I trade mainly on volume change and then go to price shifts. Lots of small plays don't have that much share trade from owner, so without volume you still don't "know" the real price.

[philipwade 10]

I use on-balance volume indicator (OBV)

[DutchDandy 10]

OBV on how many days?

[petertrading 10]

I am new person to post this forum thread.I really like your forum thread,because i am getting lots of information here.