Gilligan's Island

Premise:

short-term gap reversals.

For Buys

1. A stock must gap open to a new two-month low. The bigger the gap the better.
2. The stock must close at or in the top 50 percent of its daily range and equal to or above the opening.
3. The next day only, buy 1/8 above today's high.
4. Risk 1 point.
5. Carry the position overnight if it closes strongly.

For Short Sales

1. A stock must gap open to a new two-month high. The bigger the gap, the better.
2. The stock must close at or in the lower 50 percent of its daily range and equal to or under the opening.
3. The next day only, sell the stock short 1/8 under today's low.
4. Risk no more than 1 point.
5. If the stock collapses, carry the position into the next morning. It will probably follow through.

180's

Premise:

a one-day trend reversal and then resume the trend, or a two-day reversal pattern in the direction of the trend. This setup is one of the easier patterns to identify. Accompanied by a 2-month high or low tend to work very well in your favor.

For Buys

1. On day one, the stock must close in the bottom 25 percent of its daily range. On day two, the stock must close in the top 25 percent of its range.
2. The stock's price must close greater than both its 10-day and its 50-day moving average on day two only. (Neither ADX nor RS are needed here since the trend is indicated by price relative to the moving averages).
3. Day three only, buy 1/8 point above the day-two high.
4. Our initial protective stop is 1 point under our entry.

For Shorts

1. On day one it must close in the top 25 percent of its range. On day two, it must close in the bottomw 25 percent of its range.
2. The stock's price must close under both its 10-day and its 50-day moving average on day two only.
3. On day three only, sell short 1/8 point under the day-two low.
4. Our initial protective buy stop is 1 point above our entry.

Expansion Pivots

Premise:

Lots of institutions and traders use it as a benchmark indicator and this significant movement creates a one-way momentum.

For Buys

Today's range is greater than the daily range of the past nine trading sessions.
Either yesterday or today the stock is trading at or below the 50-day moving average and explodes higher
Tomorrow, buy 1/8 above the explosion-day high.
Our initial protective stop is 1 point below the explosion day's close.

For Shorts

Today's range is greater than the daily range of the past nine trading sessions.
Either yesterday or today the stock is trading at or above the 50-day moving average and explodes lower.
Tomorrow, sell short 1/8 below the explosion-day low.
Our initial protective stop is 1 point above the explosion day's close.

Stepping in Front of Size

Premise:

fairly thin NYSE and ASE stocks, jump in front of someone impatient and taking out a lot of size. Large buyers have trouble accumulating these stocks and when they buy they put the price against themselves. This strategy might not work before for shorts b/c of the uptick rule but that's been eliminated now.

For Buys

1. A stock must have an ADX reading of above 30 and its + DI greater than its -DI, or the stock must have an RS reading of 95 or higher.
2. The average daily volume for the stock should be under 200,000 shares a day. The lower the volume, the more money you will make with this strategy.
3. The stock must be trading higher for the day. This strategy doesn't work for stocks down on the day.
4. Most importantly, the buyer must show me he is impatient or I must see there is more than one institution trading this strategy. How do I know this? Because I am waiting for two consecutive higher bid prices where there is size to buy. ("Size" means 5,000 shares or more). For example, I want to see a market that has 5,000 shares bid at 52 and 1,000 offered at 52 1/4. I then want to see the big go to 52 1/8 or 52 1/4 with 5,000 shares to buy again. This means someone is desperately looking for stock.
5. In the previous example, if the market goes to 52 1/8 bid (with 5,000 to buy) and 52 3/8 offer, I will pay the offer side. The only time I will ignore this higher bid is if I see 5,000 shares or more offered there. This means there may be a seller who can accommodate the large buyer.
6. My protective stop is 1/8 point under the price of the original 5,000 share bid (52).
7. Where I take profits is very subjective. Many times, if there is size on the offer side or if I see my new friend has been filled on his order, I will automatically take my profits.

1-2-3-4's

Premise:

Strocks trending strongly tend to rest for three days to catch their breath before resuming their move to new levels.. This setup does not occur very often and they do not always rest three days. Sometimes a day or two and others four or five.

For Buys

1. Identify a market whose 14-day ADX is greater than 30. The higher the ADX, the better. If you are not using ADX, the RS reading must be at 95 or higher.
2. The 14-day + DI reading must be greater than the 14-day -DI reading.
3. Waiting for the market to have a 1-2-3 correction. This means that the market must have three consecutive lower lows or any combination of two lower lows and an inside day.
4. On day four only, buy 1/8 above the day-three high.
5. When filled, your initial protective stop should be near the day-three low.
6. As the position moves in your favor, you should trail your stops. In this setup, I tend to allow for a little more breathing room on my stops because of the upside potential of the moves.

For Shorts

1. ADX must be greater than 30. The higher the ADX, the better.
2. The -DI must be greater than the + DI.
3. Wait for a 1-2-3 rally. Three higher highs or any combination or two higher highs and an inside day.
4. On day four only, sell short 1/8 below the day-three low.
5. Your initial protective stop should be near the day-three high.
6. As the position moves in your favor, trail your stops.

Expansion Breakouts

Premise:

Daily range is the largest of the previous nine trading sessions, the good ones tended to have very small pullbacks so the stops should be kept tight.

For Buys:

1. Today (day one) must be a two-month calendar high. (This strategy does not use ADX, nor RS. I simply want a new high accompanied by a range expansion)
2. Today's rnage (high minus low) must be equal to or larger than the largest daily range of the previous nine trading days.
3. Tomorrow only, buy 1/8 point above today's high
4. Initial maximum risk (stop) is 1 point under yesterday's close.

For Shorts:

1. Today (day one) must be a two-month calendar low.
2. Today's range must be equal to or larger than the largest daily range of the previous nine trading days.
3. Tomorrow only, sell short 1/8 point under today's low.
4. Our initial protective stop is 1 point above yesterday's close.

How this could work intraday:

Yahtzee in Sight

Trading has been good recently. I'm feeling much confident about the set ups that I look for. I have been bad about churning lately though. The last time I had a bad day it was the same thing, I just kept throwing money at NYX and some other stock that I traded multiple times. Yesterday I could've made another personal daily high for about $350 and I lost bunch of money on RIG and GSF. I ended the day down about $100... son of a bitch. I should have some kind of personal policy like two strike and I'm out and never touch that stock for the rest of the day.... boy, that was just stupid.

If I did end up $350 on Monday that would've put me about 3 or 400 dollars away from yahtzeeing, which really is quite exciting. I'm up for November right now, which is one of my goals. Let's trade smart and maybe on some of the trades I'll take 400 shares. If all goes very well, I just might yahtzee by the end of this month.

I've been reading this book called Hit and Run by Jeff Cooper, which is more of a technical book and I thoroughly enjoyed it. It was a quick read since there's bunch of charts in there. I wonder if this was really worth $100 like it's going for on Amazon. I'm going to write them down and think more about them later b/c I'm not exactly sure how it'll translate to the timeline we're trading but I get a hunch that it'll work pretty well since some of the chart pattern does seem kind of familiar.

NO BLOW UPS!!

Had a good day today. Set a new personal daily high of about $290, $300 depending on how my commissions come out. It's hard to gauge with so many shares that I traded... about 16,000 shares. I was up about $178 yesterday, really, not too shabby for two days of work. Maybe I'll get on that list for top rookies of the week. In order to do that I need to prevent a blow up tomorrow. Every time I have a good winning streak I seem to follow up with a bad losing day and it gets difficult shake that stink. That's what happened last Wednesday, fortunately I was able to get two small up days on Thursday and Friday to end the week in positive territory to be able to trade 400 shares this week.

I feel more comfortable about taking 200 shares to get in a position trade now. The set ups I look for work most of the time. I think I can time it a lot better and get more profit out of the trades. Looking back at some of my trades, it's nice that I have some good winners but I think I've been letting some of my losers get out of hand.

Had a little chat with Chris last week and he showed me this rank report that shows the most active stocks by volume and it'll show how high or low it is relatively to today's range. It's a pretty handy tool to look for reversals, bounces or if the price breaks through the previous level you could follow the trend. I want to take some time and talk to David and Anthony. It'd probably be easier since they took part in my interview.

My Fingers Are Not Listening to My Brain

I'm still trading a lot. In fact, I traded even more than I did on Monday. 12200 shares. Yeesh! That's 3 or 4 times more than what I usually trade. I said at one more in mid morning: "my fingers are not listening to my brain. I can't stop pulling triggers."

I need to practice some discipline and on the really good set ups I'll take 200 shares.

Got into CHL yesterday in my personal account. After an hour of trading I was convinced of the stock and China and the bull market, for now. I sold my DEO for a loss... such pain. Not only it ticks back up but the stock needs to go through settlement for three days so I can't use it for trading. D'oh! I'm still don't fully believed in this rally. If the sellers come back in I might get out...

Gaining Momentum

So I had a good week last week, up about $125 and Monday was another good day, up about $150. I've been trading a lot more shares than usual and I think it's because I've been having good days and I felt a little bit more confidently, maybe overly so, and sometimes just start pulling triggers without really thinking about it. I've definitely chased a few stocks. I got some really good winner that are .50+ and I've also had a few bad losers. I think I'm going to try to fine tune my trading styles and the set ups that I'm looking for and once I do I'll take 200 on the trades instead of 100.

And I want to start talking to different traders and bounce some ideas around. I'm going to talk to Chris, he's the top rookie in the company right now and then maybe David and Anthony since they interviewed me and also Nish.