Tuesday, April 22, 2008

Trade Du Jour

The past few days I have been finding good success in going long strong stocks that open weak. Doing my premarket research and setting a game plan of 3-5 stocks to watch. These are stocks that were very strong the previous day. I 'hope' for a weak open or a gap lower and then i zoom down to the 1 and 5 min. time frames and look for 'corrective' declines and then get long and ride out a reversal. Needless to say, I had some amazing trades which i sold way too early i.e. POT on friday, opened down $2-3, then went on to rally $10. At least i made about $1500 on it.
HES, today worked out great. it opened $.40 cents lower, decline looked corrective and i went in with 1000 shrs right away and the stock never looked back. I could have milked some more out of it as evidenced by the chart but i am pretty happy.
These past few days, i have been doing well with this strategy. i make my money early, usually done by 7AM(pacific time) and i am done for the day. 1-2 trades per day. Simple, no over trading, trade the very active first hour reversals, avoid the afternoon chop. Come back at noon and see if there's anything else worth playing.

happy happy :-)


upsidetrader said...

wat to go stewie, an apple a day keeps the doctor away,nice job

Stewie said...

thank you sir. i seem more focused now and more organized in my game plan each day. I do not let new ideas(over trading) creep into my plan. Watching DRYS and POT tmrw, if they open weak, i'll be hunting for entries.

Bluedog said...

Nice strategy. Do you consider futures or US macro in addition to prior day's performance?

Stewie said...

bd. i always wanna make sure the mrkts are cooperating with the trade. that's why i sold HES so soon today, b/c the mrkts started to rollover and didnt wanna lose that nice gain.

Bluedog said...

Got it. Thanks. HES was a good trade today. Maybe it'll cooperate again tomorrow.

Doug said...

StreetSmack (remember him?) had us doing just the opposite - I was using TradeIdeas to grab the big gap-ups at the open - 3-5%. I had my desktop set up to see the 1m, 15m, and the news (in case the move was justified), plus the usual rsi/macd of course.

If it was a big gap up with no explanation, RSI in the rafters and low vol, I'd short it, usually in 500-1k bot sizes. Worked well, but took big nads if it went against you if you were sure you were right, but being done by 7-730am sure was nice!

The other hard part was walking away and not giving back those nice morning gains, being done early is an adjustment. Fun stuff!

Glad to see you rocking as usual, buddy.


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