As you guys know I have really been working hard to solidify my "trading system", lets no confuse this with automated trading as I am a discrectionary trader. With that comes the rules that define my system, the style of trading, the method of identifying or quantifying risk/reward, the resources to prepare for trading, the review process in order to improve and eliminate that which does not work.
When someone asks me what kind of trader are you? And how do you approach the market? I want to be able to tell them...
I am a day trader. I capitalize on short term trade setups and imbalances between supply and demand. I accomplish this be basing my trades off of the tape (Looking at prints, level II, and inside market) and the charts (really are one in the same, because really with out the tape you would have no chart. The chart is a visual representation of the tape). I look for trade setups that offer a minimum risk/reward of 1:5, and I realize that this is a game of probabilities and I can not control what the market will do but I can control the trades I enter, when I enter them, and when I exit them. It is not about being right or wrong, your ego will kill you in this game. It is about developing high probability trade set ups and trading them the best that you can and hopefully you are lucky to be on the right side of the trade. If not you move on to the next trade idea, it is not personal.
Well I digress...I play in play stocks: This is any stock that has earnings, news that will act as a catalyst, a stock that belongs to a particular sector that is hot. I want stocks that are going to be volotile intraday. I am looking for stocks that trade a minimum of 1 million shares pure day and in most cases an average daily range of $1 or greater.
How do I prepare myself for trading and how do I find in play stocks. Below is a list of resources that I use:
Briefing.com: Lists all stocks reporting earnings on any given day. Also provides news stories on stocks coming across the wire as the come. Important economic numbers that are coming out for the day. How the overnight markets and foreign markets did.
Finviz.com: Just recently discovered the power of this one. I use this to scan the market for in play stocks based on customer filters.
Freestockcharts.com: Use this to take a deeper look and to identify important price levels in a stock on different time frames. Also try to identify any important technical pattern that may be forming as this can more often than not be a catalyst to move a stock.
Stocktwits: Some good content all around.
Blogs: Traderfeed.com, SMB Blog, T3live blog.
T3live: stock ideas, what other traders are trading and what setups they see.
I use Camtasia video recorder to record my trading for review later. I have also developed a excel spreadsheet that I dump all my trading into where I can make comments on trades that meet certain thresholdes. It also calcutes some key performance metrics that I have identified as important. Lastly I keep a journal of trade ideas and a place to reflect on the trading day. As I gain more experience I will refine the process.
Just thought I would share.
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