Homework the night before

Darcy
What does your nightly homework consist of? I realize that over the years that has involved rigorous study involving Gary's notes, cd's, books,etc. But currently it seems that the trade you enter each day is determined that morning. Are you looking at charts the night before and saying, "if this happens tomorrow, I'm getting into this trade, and if this happens, I' m looking to do this". What exactly is your night-time preparation?

I generally look at my charts Mon-Fri and then on Sun around 7 or 8 PM. I go down my basket beginning with the futures, into the Dow, Nasdaq, and S&P then my stocks. I quick glance the 55 and daily chart. If I see the 50 or 200 moving average as resistance or support on either of these charts I write it down on a sheet of paper, and mark my chart with a red or green line thickness 2 for support or resistance. I also will change my candles to a line chart. this helps find support or resistance. This takes me about 5-10 minuts.

Sometimes if the candles are nearing a heavy moving average like the 50 or 200 I will use an extend line and draw it off of these moving averages as if I am extending the moving average in the direction it is heading. I leave these lines on my chart until they are broken.

In the morning during Squawk Box @ 8 I write down the stocks that appear on the scrolling ticker that either are the ones in my basket or are in the news or are close to or over $1.00 down or up. I also write down the Dow, Nasdaq, and S&P and how they move. In other words say @ 8 the Dow is down 15 and the Nasdaq down 7 and the S&P down 3 @ 8 around 8:05 I will write down where they are again, and keep this up till about 8:30. It gets me in tune with the market. I get a "feel" of the momentum. If the market starts out with a huge down like 145 or so I actually look for a stock that is turning to go up if my market figures start at 145, and then go to 130, then 123, then 90, then 84 etc. If the oposite happens ie. the market starts at 80 up, then 70 up then 45 up then 39 up etc I look for down, Hope that explains what I mean.

My trades are based on 2 things:

What I see from the night before including what I see that goes along withthe RTT research and/or what I see going on in the morning on the ticker and news.

Hope this helps.



Edited 1 time(s). Last edit at 06/24/2013 08:25AM by Darcy2.

In the morning I read Briefing.com on upgrades and downgrades. If any of these are on stocks in my basket I copy it off and paste it on my 55 chart. On my 55 charts you will find a red dash line for gaps, solid red or green lines for support or resistance, purple dash lines for trend, solid purple lines off a 50 or 200 moving average and dark green dash lines for earnings with dark green dot lines every graph line for nearing earnings up to 1 week out. You'll find the same information on my daily charts.

This is part of the reason I have stayed with Qcharts.

As always, your posts are detailed and quite informative. Your willingness to share is commendable. One of the things I struggle with is dealing with a big open, either up or down. I feel like I need to get in and get a piece of the action right away. It seems that so often the day's move is defined in that first few minutes. How do you, as a short-term trader react when you see that the market is going to open big, in one direction or the other? Do you get excited, and feel like you have to get a piece of that move or are you more inclined to wait for the dust to settle and then look to trade?

I hate big opens. They will mess with your head. BUT I use the charts regardless of the open. Not all stocks trade before the open or after the close. I traded WLT down yesterday and cleared a little over $1,000.

However most of my trades happen between 9:50 to 11:30 with the majority within this time frame being around 10:15 to 11:30. Generally by 9:45 I have narrowed what I am interested in. This is usually 2-3 stocks.

S/O watches the net. He sees how it flows. Is it smooth or does it make huge jumps? This is much the same as I do with the ticker on CNBC before the open. Either will give you a feel of the market IMHO.

As far as excited about big opens...No. I really hate them and to make it totally clear I HATE them. They are insane! BUT do not fight the market. And if you feel a need to jump on the bandwagon do virtual until you get over that feeling. That feeling will cost you big $$'s. Trust me on that one! Never ever trade what you "feel". Trade what the evidence says.



Edited 1 time(s). Last edit at 06/25/2013 08:30AM by Darcy2.

That clears some things up for me. You're the best. Thanks again and Happy Trading!

Darcy, I also traded WLT yesterday but I think I entered around 10:00 and bought the $11 put and exited around 2:00 and it was a breakeven trade for me (loss of around $5 plus commissions). Maybe should have bought ITM and exited sooner.? (but as soon as I exited it turned and went to where I was up previously on that option price). What time did you exit? Thanks



Edited 1 time(s). Last edit at 06/25/2013 09:55AM by TCB.

Big openings definately play a number on fairly new trader. I have learned to watch more than trade during big openings. It is very, very hard to determine which direction the movement will go after big openings. When I first started, I lost my a lot of money trying to chase after a big opening. What I found was that trading in the direction of the open on those "big opening days" were costly for me. They would generally flatten out and fall. I trade the evidence. If I lose while trading the evidence, I am ok with that because I will win most of the time.

Rookie,
Thanks for your input also, I have enjoyed your posts and have found them quite insightful. I had a "mentor" back in VA who I was able to bounce ideas off of. He was the one who originally got me lnvolved with Gary . He averages about 50K/month trading. I kind of lost my way a little after moving to another state. I am thankful that The Lord has led me to this site, it's been a true blessing! Learning a lot and hopeful for the future again! Thanks to all here for your willingness to share.
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@ TCB.......................

I bought $11.00 July Puts (30 contracts) @ 9:45 for .91 sold a little after 3 for $1.28. My option at the time was ITM. The option went to $1.40. On a small $$ stock like WLT buy ITM. I seldom buy OOM unless I am buying time and as you know me ...I seldom buy time.

Look at your trade on the 55 chart. You got out at the pull back on a 55. Not always (as you well know the market) but many times the market backs up around noon and continues that back up until 1-1:30. There are times I have bought a call at those times and made a few $$'s.

Also watch when a stock trades outside the BB especially on the Daily or 55. It will pull back in and if the market is going down hard it will reverse and continue the fall (not always).

WLT had a lot of bad news around the trade which made me stay.



Edited 1 time(s). Last edit at 06/25/2013 03:32PM by Darcy2.

@Darcy
Thanks for the input, I got in on the 13 "E" chart and the bought the July 11 put for 1.15, stock was around 11.09, I made the mistake of jumping out by looking at the 13 again when the 5, & 10 crossed and money flow went back up, instead of looking basing the exit off of the 55.

@TCB

Examining your 13 chart look @ 9:56 is when your trade began. @ $11.09 stock was having a slight pull back to flat @ that price. Note the 5 moving average on your 13 chart @ 10:48 AM. 5 moving average towards the 10. Look at 5 E chart at about the same time frame and you will see the start of a pull back. This is the first sign of an entry a little too late.

Your exit was fine considering when you entered the trade. The entry was off slightly that's all.

On Echarts the general rule is to exit when the 5 crosses the 10. I look at all my charts to see if I am in a pull back or if a trade is going to continue my way or if I need to exit.

Had your entry been sooner you could have ridden the pull back and still not have lost $ and then made some to boot. You did the right thing.



Edited 1 time(s). Last edit at 06/26/2013 09:54AM by Darcy2.

@ Darcy

Thank you for your insight Darcy