Saturday, June 27, 2015

Still Learning / Weekly Recap 6/22 - 6/25

This has been another week where I struggled with sticking to doing me.  When the market is slow I lose confidence in finding trades with my setups and I start experimenting and I get into trouble.  The reality is that all I need is 2 good days a week and I can make my weekly goal.  What I am looking for is $2000 to $2500 a week.  This is a fairly modest goal that can be realized by me remaining focused and taking advantage of my setups as they present themselves.  Obviously it is easier said than done.  When it's slow and it's taking forever for my setups to come I get bored and feel like I need to find trades to survive.  The only thing I am doing well is cutting losses quickly which is protecting my capital.  I still didn't hit my goal this week but had I not cut off the 5 or 6 trades I cut off early I would have easily made it.  I have to remain focused on my setups and maximizing their potential.

                               All Trades
Total Net Profit         $1,721.83
Gross Profit              $1,846.97
Gross Loss               $125.14
Profit Factor              14.76
Total Trades              18
Percent Profitable       83.33%
Winning Trades          15
Losing Trades             3

I do want to point out that I do not focus on $ amounts.  My P&L is hidden and I focus on the chart and my plan when in a trade; or at least I try to.  I try not to look at my P&L until after the trading day is done.  I think I will know if I have too many losing trades and it's time to stop for the day.

I reached out to Mike in DTW chat and he has helped me see what I am missing in analyzing the potential of a trade.  I trade a lot of weak moves but I need to be able to find the ones with the largest potential.  This should give me more confidence to let them work versus cutting them off too early. This is some of the advice he gave me:

"Trading a ticker just because a setup is there unfortunately won't yield profitable results. 

The best way to eliminate this problem is to only trade the stocks in play and keep an eye on them throughout the day. Stocks in play I define as having a catalyst for that particular day as well as valid trigger levels on the daily chart. If you abide by these simple criterion you will find your frequency of trading will drastically decrease and your potential for large winners will increase exponentially.  Hence, why you see me trade very infrequently but jump on the big movers when the opportunity presents itself. 

One thing to note is I never rely on any single indicator to determine my entry on a trade. However, I will use them all in conjunction to determine the direction of the imminent move. What I'm saying here is that I simply would not rely solely on the 9 EMA cross above Vwap for an entry. I personally prefer the price action to be above both the 9 and 20 EMA as well as the Vwap before entering. 

A great example was MBLY on Thursday. You can see the price action begin to curl back up and hold above the moving averages with a 5 minute candle close thru Vwap. All the indicators were pinching tightly together at the point making for a much stronger potential move up, and as you see it exploded quickly". 






This is a chart of another ticker I traded very poorly that shows me cutting off a winner for no apparent reason.  This would have given me what I needed to make my weekly goal. As a matter of fact if I had traded both of these tickers correctly I would have made my weekly goal in one day.  As you can see it had pretty much the same strong setup that MBLY had. Both were good VWAP trades before they broke the 15 minute opening range high that I like to trade.  I could have traded both off the VWAP with my stop on the VWAP and rode them both through the 15 min opening range high.  Both these tickers were gappers and were on my watch which means they were in play that day.




This was my best trade of the week from Monday.  I was on fire that day.  At first glance you could say I exited too early but my first profit target was the upper deviation band on the VWAP which at the time was 12.20.  It tapped it and as it came back I took the initial profit according to my plan. There was actually a secondary move that I missed.  Knowing what I know now I still would have taken profits but I would have looked to get back in.  When I start trading larger size my plan would be to take 1/2 off at the initial target and have the other still in for the next leg up.  If it is strong I could always add back in with my stop on all shares at the add price to protect profits.

I am determined to maximize the potential of the setups I trade.  I know there are short opportunities there as well so I will be studying my charts and Nate's DVD's to help me recognize those.  I will always be long biased and look for those first as I believe they help me identify shorting opportunities better.  I will keep studying and working on becoming a better trader.

Come check out the best chat.  Great for new traders.  Just click on "Take the Leap"

 

Saturday, June 20, 2015

F/T Week 3 in Review/New Setup Pattern

"Well Ed, you're in week 3 and you are a complete mess.  I am surprised that you haven't blown your account up yet.  At least you are keeping your losses somewhat under control , but you are not following your rules like you should.  The best thing that could have happened to you is being able to chat with other traders on Google Hangouts during the day to help keep you out of too much trouble".  This is an excerpt from my personal daily journal I write every night.  I think writing it and studying my charts have paid off tremendously and gives me a good foundation for success in trading.  I realize now that this is not a lazy mans profession as a lot of people think.  It takes dedication and a lot of hard work to get here and succeed.

I saw a video last night put out by Clay at  http://claytrader.com/  that I think may have saved me from myself.  http://claytrader.com/videos/trading-full-time-key-questions/  It identified the hidden mental hangup I have had since June 1st when I went full time.  I was worried about making enough to make a living.  Instead of focusing on a trade, making and following a plan, I was looking at how much money I can make and how close I would be to making what I needed to so I can pay the bills.  I have enough in the bank but I do not want to touch that so I was so focused on making it from my trading.  He helped me realize that by thinking that way I had very little chance of being successful in trading for a living.  I can have my rules in my face all day but if your psyche isn't right, you will not even think about your rules. So, thanks to Clay's video, I started this Friday out with a new attitude, and killed it.  It's 11:00 and over $1200 in realized gains so I'm done for the day unless a picture perfect setup hits my scan.

It was amazing how much was lifted off of my back.  Everyone for the last few weeks commented on how tense I was.  Even though I worked out every morning at the gym, I was still wound up tight.  Now I realize that all I need to be concerned about is following my rules and trading my setups.  Nothing else.  There is more money out there than I can ever make in  my lifetime so If I do what I have been doing and just bump up my position sizes, I will be just fine.  I can make peanuts for 2 or 3 days in a row but if I'm not ready for the big day because I am doubting myself and worrying about making money to pay bills, I will miss it.  So, if you are thinking about doing this full time or part time, watch this video.  Don't think about having to make money because it's there waiting for you.  Focus on your trading and following your rules and develop your own trading plan.  It's perfectly fine to work with someone who trades the style you trade and feed off of him/her while you are learning.  I do that everyday. The main thing is, just focus on your trading and the money will come.

I have to say that I have experienced every trading emotion over the last 3 weeks known to man.  Now that I have that out of the way I believe I can move forward right now. I'm not going to go into detail on all the mistakes I made because I have moved on from that but let's just say I had some bad Kool-aid that looked and tasted good at first but turned sour pretty quick (FOLD).  I traded it but not using any strategy that I have traded in the past.  The daily chart was over extended so I said short for the big HR.  That's what you need now to make it.  Big gains.  So I almost blew it all up chasing 1 ticker.  Yes I made some profit on it but I could have lost it all and then some.  I was lucky to get out and break free from that ticker when I did.  So from now on, my setups only.  I can make a living off of them and I can scale up when I am ready.  This is my month so far.  After looking at these numbers I don't feel too bad after all.  But a lot of improvement is needed.  I just do not feel that I have traded well at all these last couple of weeks.

                                                                              All Trades      Long Trades     Short Trades
Total Net Profit                                                         $7,072.72      $4,680.20        $2,392.52
Gross Profit                                                              $7,914.00      $5,277.00        $2,637.00
Gross Loss                                                              $841.28         $596.80            $244.48
Total Trades 68 50 18
Percent Profitable 77.94% 76% 83.33%
Winning Trades 53 38 15
Losing Trades 15 12 3
Avg Trade Net Profit $104.01 $93.60 $132.92
Avg Winning Trade $149.32 $138.87 $175.80
Avg % Gain 1.87% 1.68% 2.35%
Avg Losing Trade $56.09 $49.73 $81.49



One of my strengths I feel is the fact that I put a lot of time studying the charts of my trades as well as charts of my setups that I didn't trade.  I have noticed something in these charts that I have started tracking.  I don't know if it's a fluke or if it is a legitimate indicator that I can use to increase the profits on my trades.  Take a look at the highlighted areas on these charts:





I just recently added the 9EMA study to my charts.  When I would trade reversals sometimes the move up would get stuffed and I didn't understand why.  There wasn't any resistance anywhere near where the move failed.  Then someone mentioned about the 9EMA being an area of support or resistance.  It didn't make sense to me because the moving averages are a trailing study and I didn't understand how it can be used as an indicator of support or resistance.  But when I went back and added the 9EMA to some of my failed moves I saw where it moved up to the 9EMA and just rode it and then popped up or came back down.  Whatever it did I was usually out and if it did take off I was out of the move.  So ever since then I have used it on my charts.

Then I started noticing what you see in the highlighted areas on the charts above.  When I would go back and look at the gappers that made a move up to and over the 15 minute opening range high, I would get the 9EMA crossing over the VWAP and a strong move up.  I have always been a trader who tries to put enough technical info together to give me the best chance of making a successful trade, while the same time keeping it simple/stupid.  So I tend to look for things like this. I guess it's the engineering background in me.

On FIT, the crossover was .44 away from the 15 minute opening range high. This gave me an entry to get that extra profit with a defined risk.  I set my stop .05 below the VWAP.  This is what I set my stop at when I make trades off of the VWAP so I just adopted that rule for this strategy.  On ADXS the crossover happened about .50 away from the 15 min. opening high so this gave an extra profit before the 15 minute high breakout which was nice because the breakout was weak.  A month ago I would have made little to no profit on ADXS waiting for the breakout. Using this crossover as an entry point I would have made a decent profit on the move up.  This is what I'm looking for.  Ways to maximize my profits on my setups.

One of the things I have found is that on the strong moves the ticker is always trading just above the 9EMA prior to the crossover.  Of course not all tickers make the move after the crossover but since I have been tracking it 68% will make a decent move up.  The tickers that trade below when they crossover rarely will make a tradeable move up immediately or just fails.  Here is an example of one that took over an hour to make a significant move.  This is a low $ ticker so you would be trading it with some size but the lack of volume is what kept me out of this trade.  I knew without volume this ticker would struggle to move up.  Also for a day trader it would be difficult to hold a position through this chop:



Sometimes the crossover will happen pre-market.  KBH had a crossover premarket on Friday so this was an ideal trade out of the gate when it showed that kind of strength. But, I stuck to my rules and traded the 15 minute opening range breakout for a decent profit.  This ticker ended up making a strong late day move.



Here is another example that took a little bit of time to move but the crossover finally produced a big move up



This is usually what happens when I do not get the crossover.  It will come close in the first 15 minutes but will fail.  This would be a signal to take it off my breakout watch and move it to my breakdown watchlist for a potential short.



I won't trade off of this event alone.  I just use it in the vetting process to help me decide if I want to take the trade or not.  I will never base a trade off of 1 indicator or event.  Several pieces will have to come together for me to enter a trade.  But this is an indicator that would enable me to make extra profit by entering the breakout trade a little earlier with a set risk.  I am a person that looks for solid trades with built in risk management.  I have back tested it as well and it has proven to be a good indicator of a breakout over 70% of the time so I feel comfortable implementing it into my trade decision process.

Come visit me in chat:


Sunday, June 14, 2015

My Trading Station/Updated



I have been asked a few questions about how I have my station set up because it is a little different than most traders.  Everything is powered by laptops.  I think I did a post several months back on my set up at the time but I have substantially upgraded.  I started with 2 laptops, then 1 laptop and 3 small monitors, then to 1 laptop and 2 larger monitors, then 2 laptops and 2 large monitors, then to what I have now; 1 laptop powering 5 large monitors for charting and platform and 1 laptop and 3 monitors for chat and social media.  I found it easier to be able to watch all of the tickers on my watchlist on individual monitors versus continuously switching screens back in forth to monitor them.  As you have read, I have tried different configurations to try and find my comfort zone.  I am happy with what I have finally come up with.

So to answer the main question I get; why a laptop?  Simply, I want portability.  I like to change scenery.  Sometimes I like looking out of the front window, sometimes out the back, and sometimes I like sitting on my front porch.  I even like to roll my desk out on the patio on a pretty day.  I wanted to be able to trade anywhere.  So I started out finding a desk that was light, sturdy, and had wheels.

A lot of people have said that I shouldn't use a laptop for a trading station and that I need more power.  Now I'm not a computer wizard or a professional anything with computers, but I'm an engineer and I believe that I can understand information and data and make a well educated decision on just about anything technical. I also like to simply everything and look at it as if I were a child so that's is what I did in this case.   The reality I came to is this, the trading platforms and charting software don't need anywhere near the power that these PC gaming systems need, but a lot of people seem to connect the two and say you need these high power trading computers to be successful.  In a way I set out to prove them wrong, but in the end I just wanted something that I liked and felt comfortable using.

The first thing I ran in to was that a laptop video card is limited, so hooking more than 1 or 2 monitors to the laptop video card can overwork/overheat it which will eventually lead to premature failure.  However, most laptops today have at least one USB 3.0 port, which can transfer up to 4800 Mbps or 4.8 Gbps.  Contrary to popular belief, they work great for extra monitors. All you will need is a USB 3.0 to VGA or HDMI adapter.  These work as "mini" graphics cards. The VGA works pretty good but if you have HD monitors the HDMI adapter allows you to take advantage of the HD capabilities. It is recommended that you hook only 2 monitors up per USB port, but I found that if you get a self powered USB 3.0 hub you can hook up to 6 monitors up to a single 3.0 port on your laptop without losing any data transfer speed to the monitors.

I experienced no lag or video issues with any of the trading platforms I use.  My laptop does not get hot and it runs all day.  I would't recommend this setup if you are trying to set up a PC gaming system.  I didn't design it or research it for that.

Now lets look at my laptop specs.  I have 2 Asus - 2-in-1 15.6" 4K UHD Touch-Screen Laptop - Intel Core i7 - 16GB Memory - NVIDIA GeForce GTX 950M - 2TB HDD + 512GB SSD.  I found that for live streaming and video recording that a SSD drive is needed.

Like I said earlier, I needed at least a 7 port, 3.0 USB hub.  It needed to be self powered because I didn't want it to rob power from the computer.  Then I needed 3.0 USB to VGA or HDMI monitors.  I started using all VGA adapters because I started out with traditional flat VGA monitors.  I did not have any problems when I used that setup but i figure if I have HD capability now why not use it.  I use the j5 create brand but I believe this will be a personal preference.  Because my charts works so well with these 2.0 VGA adapters initially that further proved to me that I didn't need a $2500 trading or gaming computer to be successful at trading.




I have 3, ASUS  VS247H-P Black 23.6" 2ms LED Backlight Widescreen LCD Monitors that I use to chart the tickers I am watching, (6 max) and an ASUS VE278Q - 27" Widescreen Flat-Panel LED-LCD HD Monitor - Black on top that I run my scans from. Since I have started the chat community, I have added 2  Asus VE228H 21.5" Full HD HDMI LED BackLight LCD Monitors.  One is powered by the laptop from my main trading station and the other from my social media and chat designated station.  I had to use the 21.5 monitors because of the oversized 27" monitor I am using on the top.

This is the monitor stand that I use



This is the two that I added to each arm to support the new monitors




My social media laptop and monitors are on a separate lap top roll cart that I modified to hold 2 extra monitors. The third monitor is part of my main trading station and I will use that for when I have the Morning Show or Sneak Peek Wednesday in the other room.  The specs for this computer were given earlier and these are 3 more 21.5" widescreen monitors that I hook up using USB to VGA adapters. (2 monitors on my cart and the other one on my main trading station. Didn't see the need for the added expense of getting the HDMI adapters and cables. Nothing special about it.  It has my secondary chatroom/classroom and other social media running all day.  This is also my travel trading station now.  When I go out of town all I have to do is unhook the laptop and monitors.  A couple twists of a knob and the cart is in 2 pieces.  The cables stay attached to the cart so it breaks down and assembles in less than 5 minutes. It works great.  This is actually the setup I traded when I was out of town for a few days last month.  I am very comfortable trading with this setup as well.  It forces me to to focus more on tickers that offer the best setups.  This is also the one I roll outside on the patio when the weather is nice.  I just unhook from the monitor attached to the main station and I am outside enjoying this beautiful SC whether while it lasts!

Last but not least I needed to get the fastest internet that I could possibly get.  A lot of people who have problems with their charts lagging have them not because of their computer, but because their internet download rate is too slow.  I had the lagging problem when I first started but when I got the fastest internet I could get in my home, my problems were solved.  Also, I do not use WiFi.  My laptops are hardwired to a dedicated ASUS high speed modem.

Well this is my trading station at a glance.  Hope it answered all of the questions.  Another thing to note is that it took me many months to buy everything, and then  I take a % of my profits to invest in the business for upgrades as they are needed.  You never know when a computer or a monitor will take a crap and leave you hanging.

Happy Trading!

Sunday, June 7, 2015

Who Are You?

Recently I was asked, "who are you?" by a veteran trader.  Not in a derogatory way but in a way for me to look inside myself and try to determine who I am as a trader.  It was in response to a post I made earlier in the week concerning my mid-week struggles.  Another question he asked is if I had a journal or a blog that I could go back to and figure out who I am.  So I mentioned in my last blog that I went back to my blog and found my way back rather quickly.  But, the question he asked me first has been eating away at me all weekend.  I'm sitting here watching NASCAR, as I usually do all weekend.  If there is a Camping Work truck race and an Xfinity race during the weekend, I am there. It's really a good weekend if there is a drag race on TV as well.  But I just couldn't get that question out of my mind.  So, I decided to put my thoughts together in a blog so that I can have a quick reference guide to go to in case I forget who I am as a trader again.

It's good that I have reminders that guru's have shared posted on my desk but how do I directly relate them to me. What are my thoughts concerning these rules and common mistakes that new traders make and how they relate to me. How do I define myself as a trader?

Well, first and foremost, I am an "Average Joe" hence the screen name I chose.  I am a long biased trader.  Now that may change over time but this mindset has brought me to this point.  My big loss last week was on a short that ran away from me quick and I didn't have a plan for that.  Should have had my stop in, went in with a smaller size, plus other things I didn't do right. So if I had a set of "rules" specific to me, what would they be?  I figured I should work on some and these should be posted as well so I won't get lost in a stupid trade that doesn't go with my style.

Intra-day Trading Rules

1.  Focus only on the best setups that I am familiar and consistently profitable with.

2.  I need to make sure I have a plan for each trade before I enter any trade. I have to have a defined entry and exit strategy and a defined stop.

3.  Keep my plan simple.

4.  Use the price action, volume, RSI, and VWAP to establish my plan for the trade

5.  Make sure the trade is definitely a quality setup.

6.  Never get emotional in a trade.  If I do, I'm in with too much size or I do not have a solid plan that I understand

7.  Never follow anyone else into a trade.  Never! Always make sure I vet every ticker I trade.

8.  Losses are good if I learn from them.  Focus more on my losses and failed trades

9.  Cut losses quickly. Use position size correctly to establish correct R/R:  At least 2:1

10.  Be prepared to improvise, adapt, and overcome in the changing markets.



Quick Reverence Guide
1.  My Setups
     - 15 Minute Opening Range Breakout - Pre-market gappers
     - 15 Minute Opening Range Breakdown - Pre-market gappers
     - Bottom Reversals
     - Top Reversals
     
     Sub or Secondary Setups - Patterns I normally look for after I have traded the initial move
     -Trades off of the VWAP (above for longs and below for shorts)
     - ABCD set-ups for long trades - typically a secondary move for my pre-market gappers.
     - Gearing and perking to break key resistance areas, HOD, R/G moves

2.  Best time of the day for me to make profits is 9:30 to 12 so that's the time for me to be aggressive.  Later in the day will need to make sure the setups I trade are solid and take profits quickly.

3.  Make sure I know where the SPY is trading.  If it's trading below the VWAP, take caution on long trades.  If trading above take caution on trades to the short side.


My setups are simple so I do not need a lot of indicators to help me trade.  I like to get in and get out as fast at the trade allows.  As I develop as a trader, I will swing more and take trades with plans of holding for longer time frames.

Saturday, June 6, 2015

I'm Ready! Or Not!

Going into Monday I was focused on remembering one main thing; do not change a thing.  Stick to what got me here.  This is just another day in the markets.  In reality, everything was different.  I'm looking at 4 monitors with my TOS platform and charts, my laptop w/Das Pro on it for order executions, and another laptop and monitor with chat and all my social media running on it. I only got to use this setup a couple of times since I put it together earlier in the year.  It was easier to look at the charts without flipping from one screen to the next to see my charts like I did at work, but at times it was overwhelming.  But, I was comfortable and happy, and ready to take on the markets.  My first trade was an out of the park HR, which is probably what threw me off.



To begin with, I didn't want to change what time I got up and what time I did my watchlists so I still get up at 6am and I am at the gym by 6:30.  I work out and take a shower at the gym and I'm back home fresh and ready to go by 8, about the same time I would be getting to work.  I'll go through and make my watchlists, (which I will go over in detail later in this blog), brew my coffee, and wait for Ross to come to work.

So to start my Monday out I was looking at trading the Gap and Go, a strategy that I haven't traded before.  I would watch Ross execute these trades every day, but I was at work with slow internet and an unreliable wed-based trading platform.  But now I was home, had my Das Pro, had my hot keys set up, and I was ready to trade the Gap and Go.  I vetted the gappers like I normally do.  But the one I picked to trade wasn't the same one that Ross picked, so I was on my own.  IMGN put in a pre-market high on 11.48 and it was consolidating around that level about 10 minutes prior to open so I knew that if it pushed 11.50 it would run up pretty quick, hence the Gap and Go.  The bell rang and I immediately saw buyers coming in so I entered into a position.  My share size is small enough to where I get very little, if any, slippage so I market in and out.  I marketed my order and didn't get filled until $11.755. When I got in the ticker it was going parabolic and ran $2.60 in 4 minutes.  I got greedy and didn't take profits when I should have but I still ended up with a decent profit.

$1,098 profit IMGN Long Stock by AverageJoeTradr



I wish I can say it got better but after the first 30 minutes on Monday through Thursday, I traded like a complete idiot.  Forgot about my rules, and I was trading unfamiliar patterns and trying to make something happen because it was so slow. I completely abandoned what got me here. The bad part about it was that I knew it but couldn't do anything about it.  I was really beginning to worry and think I made a mistake.  But, I went back through my blogs and read my rules and reviewed the ones on my setups and was ready to start fresh on Thursday.  Turns out that is exactly what I needed.  I went from all losing trades on Wednesday to all winning trades on Thursday.

What happened to me this week is the main reason I write my blog, I need to leave myself a map just in case I get lost.  I was able to quickly identify what I was doing wrong and refocus on what I needed to be doing.  I actually wrote it with the expectation that hardly anyone would see it, but the fact that it has helped and inspired so many is just more motivation to me to keep documenting my journey; failures as well as successes.

I realized that I can make money with simple strategies and that they are adaptable to the changing markets.  Sure some days I won't make as much but the profit potential is still there and it it scale-able which will allow me to increase my position size as my account grows.  This in turn can produce larger profits.  I just have to trade in my comfort zone.  My daily goal this month is $500 a day, which is more than enough to keep the job away.  But, I do not focus on that during the trading day, or at least the first 3/4 of the day.  I only focus on finding the best setups and trading them correctly.  If you do that, you will hit your goals.  If you are doing that and not hitting your goals, the answer is not to trade more, it's increasing your position size on the strategies that are successful.

I try to keep this in mind every day


The mistakes I made this week:

1.  Trying to force trades to hit my daily goal
2.  Trading with too much size trying to make a larger profit
3.  Not trading my setups and trying to trade on "feel"
4.  Not having a complete plan before I entered a trade
5.  Not sticking to my R/R plan

So really, I broke rules 1, 3, 6, and 7.



Here's some other pictures I have taped to my desk








So once I read my blogs and taped these pictures to my monitor I was on my way to getting back on track.  I credit my ability to get back on track so quickly to these pictures that Nate @ InverstorsLive sends out and Ross @  Daytrade Warrior teachings.

This is how I start my day:

I wake up a 6AM, wash up, grab my protein drink, water, gym bag and daughter, then head out to the gym.  I get my muscles heated up in the sauna for 10 minutes then jump on a cardio machine.  They all have TV's so I watch CNBC while I'm on it.  Now Monday, Wednesday, and Friday I only do cardio for about 15 minutes because I work out with the weights those days.  On Tuesdays and Thursdays I stay with just cardio.  My workout is finished about 7:30, I take a shower and my daughter and I head home.  I am energized and refreshed which I believe gives me the best opportunity to do well.  Ok, I know you didn't want to hear all of that so now to the good stuff.

I get home, fire up my trading station, cut on CNBC, grind and brew some coffee, and start looking for some gappers.  The first thing I do is go to  http://thestockmarketwatch.com/markets/pre-market/today.aspx.  This give me the tickers that have gapped up or down from their previous close.  I used to use Equityfeed for this but since I am doing this as a business now, if I don't need it I'm not paying for it.  I tested this prior to me dropping Equityfeed and it didn't miss a beat, and it is continuing to do well.  All I have to do is refresh the page every 10 minutes to get updates to the list. I vet these the same way I did in the past: http://averagejoedaytradr.blogspot.com/2015/03/how-i-vet-tickers.html

Now the blog post has the Equityfeed filters but I use the same vetting parameters.  The only difference is I check the volume and news on TOS instead of Equityfeed.  Once they are vetted I put them in my watchlist, I have a separate one for gap ups and gap downs, and I wait for Ross to come to work an put his screen share up.  This is usually around 8:45.  I also have a Benzinga newsletter that I get every morning and I read it at this time.  I sometimes find the tickers they mention on my watchlist which will move that ticker further up on my list.  After his scans are up I just look as his gapper scan for updates because it has the volume, float, and the other technicals I like to use right there.  Now the reason I look at gap downs is because some recover and run out of the gates similar to a gap and go we see from the ones that gap up premarket.  I do check the news on these but I do not fall in love with it.  I will usually post what I'm watching on Twitter.  How I usually trade the gappers is explained here: http://averagejoedaytradr.blogspot.com/2015/05/my-gapper-strategy-explained.html

I do plan to start shorting the gappers that go the other way on my 15 minute opening range breakdown strategy as well as trading more Gap and Go's with Ross since I am home.  I will keep the gappers on watch until 11:00.  Then my main focus will be on reversals.

My reversal strategy is simple.  My first choice is to catch bottom reversals but I have been studying top reversals as well.  The top reversal setup is just the opposite of the bottom reversal setup.  I have a scanner for both that feeds live to a watchlist on my TOS platform.  I am also learning how to use more of the tools in my TOS platform.  My only complaints so far is that it will not scan premarket.  Here are my scan setups for my reversals;



These are simple scans that have given me good results.  All of the tickers that hit are not good setups so I just follow my setup parameters to identify the ones I plan a possible trade for.  This blog shows some examples but I have modified what I look for based on the changing market conditions.  My modified explanation is below.  http://averagejoedaytradr.blogspot.com/2015/04/explanation-of-reversal-setup-472015.html

Here's what I look for: When the ticker bottoms and makes the first new low after at least five red 5 minute candles, I note the RSI, the volume, and the candlestick that made the new low.  Sometimes it will have a doji or a small green candle that did not make a new high compared to the previous candle and it would make you think it's trying to reverse.  I try not to fall for this.  I will want it to print a candle to make a new high relative to the candle prior to the one that made a new low.  If the RSI is above 25 and the volume is still flat, I look at this as a short opp and will take it if Level 2 shows more sellers in line than buyers. I will wait until it tries to bottom again where I would get another doji or small green candle that may make me think it's starting to reverse. I look at the RSI and volume again.  If it is lower than the previous RSI but not below 15 and volume is still flat, then I will still think short.  If the RSI is higher than when I noted it previously and the selling volume has gradually picked up, then I will look to exit my short position because I expect the reversal to come soon. (I know it sounds backwards but I have studied my charts from the past month on these and that is what I have seen and it has worked every time I have tried it.)  But, the bottom line is that I will let the chart and price action tell me what it wants to do.

I have my setups and parameters to try and give me and edge but the fact remains that the market is always in control.  I have to have at least five red 5-minute candles in the row before I consider the setup.  The RSI has to be below 20. My planned entry needs to be at least .50 away from the VWAP.  The VWAP is my first profit target on a reversal so there has to have enough of a potential move for the trade to make sense.  Meaning if I have a .20 stop on LOD and only a .25 potential move to the VWAP, the R/R is not good enough to take the trade.  I like my stop to be on LOD for all my reversal trades.  This does change based on setup conditions though. Before I enter I have to have a 5 minute candle to make a new high compared to the previous candle, and the next candle has to open higher than the close of the candle that made the new high.  That's my trigger to enter. It's conservative but it keeps me from making too many mistakes.  I am looking at a 2 minute setup but I feel more comfortable with the 5.

Also, one of the key factors in me entering a bottom reversal trade is where the SPY is trading. If it's trading below the VWAP or showing signs of significant weakness, I will be very skeptical about taking the trade.  Everything else would have to be perfect and if I do take the trade I will treat it as a scalp.  In all of my research of the trades I have 80% of the time instead of reversing the ticker will stop fading and consolidate or give a small move to the up side and then consolidate.  Like anything else, this market indicator is subject to change but it has worked well for me the last few months.  When I do trade and the SPY is trading below the VWAP or is weak, I will take smaller profits and exit positions quickly if I do not like what I see.  I take small profits and do not give a ticker too much room.

Some examples of my reversal trades are here: http://averagejoedaytradr.blogspot.com/2015/05/how-i-use-candlestick-patterns-on-my.html

Lastly, I have two other scans that I run all day to give me a feel of what is going on.  I look at these tickers and sometimes recognize an early setup but I do not do much with these now.  I'm just tracking data and comparing it with my reversal scanners.  They track the largest % gainers and losers throughout the day and feed a live watchlist on my platform.




That's all for now.  I will keep you posted as I develop this month and adapt to trading full time.  Have a great week