Daily Game Plan…Day Traders
In lieu of a trade today, we’ll go over the story line leading up to our first
Day Trade.
If you understand, you see.
Yesterday we did a day trade in the oil. You either made app 70 cents or worst case, you scratched the trade.
My Definition of a day trade: Picking a level, whether with the trend or contra-trend ( a place you expect price rejection the first time in), with at least a 3/1 risk profile (meaning you’re risking 1 dollar to make 3-4).
To do a day trade you must be disciplined with a game plan and stick to it.
The board showed that Risk/Reward wise 92 Oil was a better sell level the first time up. This does not mean that it’s a forever high. It’s just a level where you expect descent price rejection the first time up given the distance the instrument has already traveled.
That’s why it’s called Day Trading…” Frequent Short term trades to make money with defined risk”
Let’s dissect yesterday’s trade:
1) 4/16/13.. Oil… WTI over ran my buy area, however the Brent stopped @ 98 confirming the low for now.
89.33 will act as the upside pivot. “We were looking for a low”…
4/17/13….98.00 Brent is the critical hold and pivot level running the oil complex.
4/18/13…Oil put in new lows for this move and reversed the same time Gold filled out it’s
long term Point & Figure chart last night, buoyed by domestic Chinese and Indian buyers,
for a straight up 60 dollar rally back to resistance.
4/22/13…OIL…89.33 is the level we’ve yet to penetrate over the past week. Sustaining above this level will lead to the next resistance @ 90.50.
Note…I did not talk about it on 4/23/13
If it’s not in play it’s off our radar. On the other hand, if we’re continually covering it Something is afoot!
4/24/13…Oil & associated names are leading the stock rotation to keep the Indices firm.
90.50 has been our first upside re-test level. Now it’s all about how and where the breaks hold.
If the move is real we’ll see 92 down the road.
” Oil paused here with was a 55 cent break before powering through to our objective.” The breaks held..
4/25/13…Oil…we got to 92 a little faster than I expected. All new strength is needed over 92.25 for more upside.
4/25/13…Daily Game Plan…Day Traders
Oil @ 92 shows the most risk definition.
Let the “Pit” opening range be your guide. The June Pit opened at 9186-9194 and broke straight down to 91.11.
Look to sell the oil against 92 with a very tight stop looking for an initial 80 cents.
Follow the dialogue!!!! We will get you from point A to Point B.
We were looking at 92 as a go or no go level. This was the only place to take a contra-trend trade.
The reasoning was twofold: it was the right day of the week for a shot at a good technical level we’d been targeting for days + we knew that going 92 + bid we were wrong.
Posted @ 8:06 CDT 4/25/13….
Each day we will try to write one low risk set up for Day Traders.
We’ve already seen the expected wiggle we were looking for in the Oil market.
The first time into our # zones is the time to act…
The first time into a good # set is the least risky with the highest probability of success.
This is the second time up and the zone should no longer be used as a sell level
If you’ve just done this trade you should now be using a break-even stop.
Pay for the trade on weakness between 91.20-30.
FYI…”Pay for your Trade” is our code for take most of your chips off the table.
Risk management 101!!!..
Where are you wrong?
If you don’t have the stop before you do the trade..Don’t do it!!…It sounds almost ridiculously simple,
Stick to it, Day Trading is about hitting singles not home runs.
Rule #2!!!!!
Only trade, at a side, from a level where you can codify or define your risk!
Stick to your stops…( stay with your game plan) you can always decide to get back in.
Mr. market is never wrong!!! Only you’re assessment of the fundamentals or your trade location is flawed!
Trading markets is all about not fading the capital flow at the wrong levels.
The story line can change but the chart foretells the story.
Recap:
We had a level with defined risk looking for a defined return.
We had the stop “before” we did the trade.
We knew how much we were looking to make, app 80 ticks.
Lock..Load..Execute