Daytrading with Consensus

[Ares]

Note: This is mainly for educational purposes. Please do your own Due Diligence.

My goal here is to pick stocks that would capture the interest of traders from scalpers to long term investors.

I would like to see how long it would take to double $5,000, trading stocks Under $10.

To get better consensus, I need pros and cons.
Please post positive and negative comments.
Any suggestions would be greatly appreciated.

In this thread, my trading plan is to trade 500 shares with 20 cents risk:20 cents reward ratio. (My primary trading plan is to trade 1000 shares with a 10 cents risk: 25 cents reward ratio)

The current criteria would be:
(please post here if you see symbols with these criterias.)

Plan A:
1) a premarket mover (traders could give their input before the market opens)
2) long term uptrend
3) liquid (at least 100,000 shares)
4) volatile
5) good fundamentals being a bonus ( I prefer charts and level 2 combination)

Plan B:
1) Go through list of uptrending stocks with Weekly Golden Cross - preferrably with a fresh cross of the MACD, Slow Stochastics, MACD histogram, and the upper Band of a tight Bollinger Band being broken with Big Volume.
2) Sort by change (looking for symbols trading at least 0.25 above the open)
3) Select symbols with a positive net price(narrow down candidates).
4) Select symbols with volume that is at least 100,000(liquidity).
5) Select symbols that has a nice level 2 set up
6) Select symbols that have a block print of at least 25,000 in the green

Plan C:
1) Take a rest (exercise self control and try not to force a trade)
2) Smile and think: "No money gained but no money lost too."
3) Look for opportunity the next trading day.
4) Eat info like fish - Eat the meat (good information) and spit out the bones (bad information).

Plan D:
Diversify and put some money long term and follow the 3SOF Portfolio
(which have good fundamentals).
I already felt left out with my own picks(which doesn't require good fundamentals) that I posted in the Stock Picking Forum.
ie: PRXI,AVZA,STEI

My wishful thinking is for scalpers(who adds liquidity) all the way to long term investors, would benefit when the sweet spot is "tickled" where the shorts have to cover to cut their loss, the AX giving way for higher prices, and the stock being taken to the next level.

I would like to gather as many eyes (who knows, an institutional eye may get a glimpse ) to focus on  stocks under $10 that has the most potential for the day.

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I'm revising my trading plan starting today (February 26, 2007)

1) Use 1000 shares for stocks under $5 with a  10 cents risk : 25 cents reward ratio

2) Use 500 shares for stocks under $10 but above $5 with a 20 cents risk:20 cents reward ratio.

First choice: Daytrade with Consensus.

Second choice: Bottom Fish a long term uptrending stock that has tanked for the day.

The reason I'm revising:( A result of new information and reminders that I have acquired recently from 3SOF).

1) To maximize the use of a $5000 capital.
2) As long as I still go with the longer trend, I feel more comfortable bottom fishing.
3) My reasoning is if there is not enough volume to push the stock up past the breakout point for the day, most likely, it will come down.
4) When it comes down, as long as it has enough volatility and volume, most likely, a lot of bulls(long term) will find it cheaper and start buying.
5) It's mainly a matter of determining proper support and resistance.

"Buy high to sell higher or buy low to sell high."

[Ares]

Today's pre-market stock pick: lvlt, mama, brlc.

Deleted lvlt and brlc from my stalk list because it had a negative net price

Watching MAMA to see if it meets the other criterias.
Hourly Support: Looking at 5.05, and 4.40

[Ares]

XIDE was not in my list of pre market movers but is looking good.

[Ares]

XIDE is under Plan B
In: 8.42
Stop:8.22
Out:8.65
This may still go up but I'm out at 8.65 for the day.

Start: Trading Capital: $5,000
In    = $8.42 x 500 = $4,210.00
Out  = $8.65 x 500 = $4,325.00
P/L   =$115
(Trading Capital=$5000) + (P/L=$115) - (commission=$20) = $5095
End: Trading Capital: $5095

If someone sees an error in my calculation, please point it out right away,

thanks,
Ares

[Ares]

XIDE may still go up but I'm out at 8.65 for the day.

[Ares]

Today's premarket movers: chtr,mama,zvue,lvlt,brlc,armhy
so far, all have a positive net price - watching who the leader will be.

[Ares]

lvlt is leading. Needs to break 6.47, then 6.80

[Ares]

Went to Plan B
Saw an opportunity in MEMY
In at 4.75
mental stop at 4.55
I may have  made a mistake, got in without checking T and S for Block prints.
If it opens and closes below the 15 sma or have more signs of weakness, I may have to get out at a loss.
After reading information about MEMY from the 3SOF thread under stock picks, it gave me a more positve perspective about my decision.
I'm tempted to close my position because I have to take my son to school but I'll take some extra risk and hold this one and see where it is when I come back.

[Ares]

Out at 4.71 took a loss with MEMY.
Start: Trading Capital: $5,095
In:   4.75 x 500 =  2375
Out: 4.71 x 500 = 2355
P/L: -20
Commission: -20
End: Trading Capital: $5,055

I may have sold right at support but couldn't tell at the time I sold it.

This is where the "should have" comes in.
I should have sold my position at a plus before I took my son to school (Right after I got in at 4.75, it went down and touched my mental stop loss of 4.55. I was supposed to initiate an exit already. The price went up to 4.90 and gave me an opportunity to get out - but I didn't.)
I should have respected my stop loss and got out as soon as possible.
I should have waited for confirmation and rode with a block trade before buying.

[Ares]

Starting Today, I'm going to brush up on my Chart Reading Skills by reading as much as I can from 3SOF's Technical Analysis Section and to gather information from traders that seem to be successful.
I'm on a mission to find what the majority of traders are looking for and to trade WITH them.
I will be editing this post from time to time to add observations.
If someone knows a short cut to this mission of mine - please post.

So far, this is what I have gathered:
1 Volume doesn't lie
2 Buy on the dips
3 Momentum Trade
4 Ascending Triangles
5 Breakouts
6 Bottom Fishing
7 It seem like the most common indicators that are being followed are the Moving Average, MACD,RSI,stochastic, and Bollinger Band
8 Support and Resistance
10 Fibonacci
11 The Trend is your friend
12 Amateur trader's looking for affordable stocks
13 Time and sales (looking out for blocks)
14 Identifying and observing the Market Maker's Actions (These market makers really know how to trick people - especially the AX)
15 Trend reversals
16 Multiple timeframes
17 False breakdown
18 Volume must be higher than the previous day
19 Wolf Wave Patterns (Had 7224 views - seems like the most popular in the Technical Analysis Forum, followed by Ascending Triangles which had 5800 views.)
20 Symmetrical Triangles
21 Parallel Trendlines
22 Fundamentally Sound
23 Good News
24 Broadening Wedges
25 Divergence
26 3 Magic Lines (Impressive)
27 Linear Regression and RSI(2) - I ended up signing a free membership with prohet.net after reading ny10013's post.
28 From G Pattern to STEPS.

[AussieTrader]

Hey Man,  well this is a great resource (maybe you already seen it) http://stockcharts.com/school/doku.php?id=chart_school

Don't know if you read much, but I would also advise you read some trading books to further identify your own trading goals / motivations / psychology.

My advice for you (for what it's worth). Go with either plan C or plan D. Plan D being follow the 3SoF portfolio that David is running. It answers the type of trading you are (currently) looking for: fast action, decent return, small portfolio size (start point), big gains (hopefully) You can contribute to stocks being analyzed / traded whilst learning and sharing with the community.

Plan A or B will be a real painful road. Day Trading is tough.

Good Luck

[Ares]

Hi Aussie Trader.
Thanks for your reply.
I do use stockcharts.
I like reading a lot ( to the point that my eyes hurt already ) but have to stop to give myself some rest.
I'm a Transit Operator. Most of the time, at the end of the loop, I read.
If my eye won't hurt, I don't have to eat or sleep, and have no other responsibilities, I'll probably keep on reading.

Some of the books I've  read were:
1) The Market Maker's Edge by Josh Lukeman
2) Swift Trader by Charles Kim
3) Bollinger on Bollinger Bands by John Bollinger
4) by David Nassar
5) by "Trader Vic" Victor Sperandeo
6) Japanese Candlestick Charting by Steve Nison
7) a booklet from Vision Investing

Some of the Sites I check from time to time is:
1) NASDAQ.com and
2) StockScores

I took a course with:
1) Teach me to Trade and
2) Cyber Trading University

Almost everyday, I talk to people who are involved or are considering playing the stock market (due to exposure by being a bus driver).
I tell them to take a course first or, if they want to save money, to visit 3SOF's website first.

How I wished I followed Livelife's footstep of saturating himself with information from 3SOF when I read his post (about 3SOF) from the Yahoo Message Board about 2 years ago.

It's just recently that I started getting involved with 3SOF (when David invited me to try the Premium Section).

My main problem is controlling my emotions and respecting the trading plan I made before pulling the trigger to buy a stock that interest me.

My recent post at LVLT to Melf Elf would probably answer my response to your advice.

My goal is noble when I started a thread called "Daytrading with Consensus".
If I'm stepping on anyone else's  toes here please let me know because I'm considering not to continue this thread anymore.

Thanks again for your reply,
Ares

P.S. revised the plan and added "Plan D".

[wrangler]

Hi Eatinfolikefish
Don't give up so fast on this thread. It,s you're diary to learn from, it doesn't matter if anybody responds to it or how many does respond to it. Use it for your own reference to go back in from time to time to see where you have made you're mistakes and where you have made your winners and you'll begin to find what style of trading is best for you,,what works and what doesn't work.
  I have started day trading and it is hard as aussie have stated and if you're new at trading my advise to you is don't start as a day trader. Day traders must and always stick to getting profits while profits are there without trying to look for maximum gains you get in and you get out.
I really like this thread and will come back to it for some good reading,, even the most experienced traders can learn from those still learning. One thing I've learned in life is when you think you know to much to learn from those that doesn't have as much experience as you have ,,that is when you'll begin to lose because you begin to think you know it all and nobody knows it all.
Wishing you goodluck in this new world of trading.

A good buck for new readers you might like
Investing For Dummies
By,,Eric Tyson

[Ares]

Thanks Wrangler,
When I started this thread, I did view it as my diary to look back to for mistakes made and hopefully not to repeat them again.
The added bonus is, there's a lot of experienced traders here at 3SOF to keep me in line.
My experience of losing is posted under stock picking - lvlt.
This is my post there: (I haven't figured out how to cut and paste quotes properly yet.)

Amazing analysis Melf Elf,
Holygrale and Quasi was right.
It makes me want to put some money for longer term now too.
I'm still weighing out the pros and cons of holding overnight.
I got burnt on a gap down before.
At that time, GNTA looked fundamentally sound so I bought 1,000 shares at $2.25. It gapped down later on and now I'm still holding it.
GNBT looked nice at the time too, so I bought 1,000 shares at $3.13
with a stop of $3.03.
GNBT gave me a lot of chances to get out that day at a plus after it hit my mental stop - but I didn't get out - I held it overnight!
My plan at the time was: Buy at $3.13, mental stop at $3.03 then buy again at
the $2.00 range with a stop of 0.10 again and 1 more time at the $1.50 range with a stop of 0.10.
Again, I held it overnight!
Now, I'm still holding 1,000 GNBT shares at $3.13.
The 3SOF's program of holding fundamentally sound stocks with risk distributed to 15, looks very interesting.
I'm considering the premium area, but for now I would like to read up as much as I can.
Thanks for your expert analysis,
Ares

Thanks again for your reply Wrangler,
Ares

[Ares]

I'm looking forward to the day when I'm disciplined enough to open a Margin account.
I would like to go long on a fundamentally sound stock that is uptrending.
Buy insurance by hedging my position with a Protective Put.
Earn residual income by selling Covered Calls.
For now, I'm sticking with a Cash account.

While I was driving yesterday, this question came to my mind:
Besides profit taking, why would someone go against the Trend and a Big Buyer/Institution?

Making money going short seems very profitable in a fast way profiting from people's fear ( If you know what your doing.)
The downside is:
1) Getting Squeezed
2) Margin Call
3) Upside loss without a stop - better not hope.