Daily Perfect Trade Strategy

So I create this thread in hopes that everyone can share their PERFECT Trade Strategy here.

Lets assume you can only make one intraday trade a day. The night before you do all your research(mainly Technical Analysis) and come up on a list of 2 stocks to watch for tomorrow to possibly trade.

So question is how do you go about finding this stock.

One example would be:

1. Market Direction (long or short)
2. Sector Direction (long or short)
3. Stock (directional bias based on Market and Sector)

Now questions for this strategy would be what factors does one choose to pick the correct market direction, sector direction, and lastly the stock itself.

Would love comments on this and also sharing any strategy that falls into same intraday category. Assuming no NEWS and just based on charts.

Looking forward to thoughts...

First, I don't trade micro moves on shorter charts so I wouldn't head into any day assuming I was going to make a trade. I only use bigger charts with expectations of moves lasting 4 to 10 days; comfortably knowing I might go a week or two certain times per year w/out forcing a trade. That said, if I were to trade micro charts then I would follow the exact same strategy I use for bigger charts.

1. Pick a larger time frame by a factor of 2 than I'm trading to define my trend. I may or may not trade the direction of the trend but at least I'm aware of the trend. Knowing trend also helps with decision making. If I make a good decision on trading chart in direction of strong trend then I may give the trade a little more room to breathe (i.e, work). If trading against trend then I'm looking for earliest signs to get out

2. I want a stock chart 1 factor higher than I'm trading doing the same thing, or almost the same thing, as my trading chart. In other words, I'm not looking to make a trade on an old move, exhausted move. I want a move just starting or looking like it is getting ready to start on this chart. Need technical evidence based on experience to give me some warm and fuzzies

3.I want the chart I'm trading to be starting a reversal. Early entry - just starting to move and turning my direction. Not something that started yesterday or 3 -4 hours ago (remember, we're talking small charts). I want it starting now. I'm also waiting for definite turning my direction NOW - not hoping, wishing, thinking it might, hoping it will, but waiting for the turn to the point where the chart screams "if you don't trade ME then liquidate your accounts and work for someone else the rest of your life".

4. I want to look at the market chart that best aligns with my trading chart using the same time frame. I want that market chart doing the same thing (i.e., just starting the reversal move NOW. At the very least I want a sector chart for my symbol doing this.

#4 is critical as it provides initial confirmation that the stock is not a loner - rising tide lifts all ships.

Next, I'm watching #2 initially (chart 1 factor larger) to give me additional confirmation soon after entry - within a few candles. Once I have confirmation then the entire goal is to trade my trading chart in context of of the next higher chart while being aware of the trend chart. Constantly evaluating at certain intervals looking for my exit. As I said initially, trend chart will help me decide on earliest possible exits vs. sticking around a little longer. Think of it like this. You want the chart 1 factor higher so close to doing the same thing as your trading chart that your trading chart could be consider a sniper. They are turning together - look very similar. You get in and out using trading chart before the chart 1 factor higher turns against you or when your trading chart screams IT's TIME TO GET OUT. Trading chart typically signals this before the higher chart is obviously exhausted. The point here is you are trying to capture as much of the move as possible on the trading chart and a good chunk of the move on the next higher chart before the trading chart turns against you or the next higher chart looks exhausted. You want these two charts working together.

A good book to consider is Dr Alexander Elder. He teaches a triple screen method similar to the above. Not exactly as my suggestion is a modification but it's a good starting point. Start with Come Into My Trading Room where he teaches this method and other good suggestions.

Finally, I would consider some of the E-chart suggestions made in this forum. Seems to made a world of difference for others by adding this indicator.

Last but certainly not least, if you don't want your trading to be a J.O.B. consider reaching out to folks in this forum regarding the Stock Market Survival Classes. It's a lot less stress when you don't have to stare at the monitor each and every tick by using bigger chats that allow you to have a life.

Best of Luck!

-NCT



Edited 4 time(s). Last edit at 08/09/2018 08:19PM by NCTrader.

One final thought. Dr. Alexander Elder teaches the triple screen using Weekly / Daily / 60 minute. While typing my response and thinking how I would approach smaller time frames, I was thinking Daily / 60 min / 30 min or 4 hour / 60 min / 30 min. I said a factor of 2 but that implies you know what charts I'm using (trend is 2 time frames above trading based on my charts). The technique taught by Elder and used by some in this forum is a 4 to 5 factor for the trend chart based on your trading chart time frame Hope that helps

So I have actually read some of Dr. Elders book and actually use the triple method. I have been using the daily, hourly, and 5 minutes charts and my daily goal is to catch a chart that I can ride for that day. After reading your analysis I'm thinking maybe I'm using the wrong time frames, maybe I should be using 4hr, 1hr, and 30 minute charts while the 30 minute chart is the one I trade.

For example two current trades I have on right now is short WLL and short MS. As I'm reviewing it I noticed they are good trades but it will probably take a good week or so to show any reward. So I think I need to change up my time charts. I really got learn how to read sector charts though, for some reason I find them harder to read than a normal stock chart. I have not read about the E chart that you mentioned so I'm gonna jump on that right now, really do appreciate your feedback and time.

So I'm searching for "e-chart" and "e-chart indicator" but nothing is coming up. Do you by any chance have a link for it?

There are some folks in this form that can help you on the E. Be advised that name comes from this forum - Google search won't help you. If you want to research on your own, research triple moving average cross over. Some folks that visit here have found a way to use it successfully in their trading. Note: it's not the holy grail or a stand alone indicator. Just one piece of technical information. Being able to read the charts and layering the E into what you are already doing would be the goal.

As for time frames, far be it from me to recommend what someone should be using. Chart time frames are partly based on your personality. If I were to trade short time frames as you suggested, then 4 hour / 1 hour / 30 min would probably be my choice. Daily as trend would work. Might drop down and include a 15 in there to see if it helps. I personally would not use a 5 minute, too much noise but that's just me. I also think there is too wide of a gap between 1 hour and 5 minute. If I was determined to trade 5 minute then I would want to be watching a 30 minute chart as well.

E strategy is a system my S/O came across through his studying charts, reading for countless hours and spending night after night scrolling through charts printing them out and going over and over trying to figure out why he lost on those trades. We did this together. Year after year after year we worked from 3AM (self-employed) setting up our lap-tops and trading when we could when the market would open, breaking for lunch and putting on paper trades. We paid our dues for almost 6 to 7 years before we had a break through. In 2017 we had 2 losses!

We bought EVERY SINGLE BOOK on GW"s book list cutting our grocery money, stopped going places, even stopped buying each other Christmas presents just so we could buy them only to discover we really only needed one of them (really) and 1 book we found ALL BY OURSELF and the best book of all the BIBLE.

The hardest thing about trading is (1) FEAR (2) Studying (3) Doing the work yourself (4) Thinking it is easy (5) Thinking you don't need to pray (6) Thinking you know everything (7) Thinking there is only 1 way (8) Jumping in and hoping you are right

You CAN actually KNOW you are right.

The E strategy is simply use moving averages to the size chart you use. Understand and FIND OUT what option traders use. That information is out there. Search for it. We found it. So can you.

Use them and the BB and YOU ARE ALMOST THERE! S/O and I are short chart traders. It suits us. We average about $250 to $500 let say every other day...because there is not always a trade everyday in the stock we chose to watch. Our basket is about 12 stocks. I have started to include the DOW because of this current President who seems to favor that area.