Good evening StockBandits!
Another attempt at a rally today fell shy of success as the indexes gave back their early gains to finish right near Tuesday’s closing levels. The NAZ and S&P 500 each finished less than 1 point away from last night’s levels, while the DJIA gave up a measly 9 points. It’s sure looking like the run off last week’s lows is getting tired with the weak finishes yesterday and today, but we still have yet to see any real profit-taking kick in.
The lack of back and forth action leaves us with what has been a one-way move lately, which also makes it difficult to locate new setups for anything but the shortest of timeframes. Bullish stocks are for the most part looking stretched to the upside, making them higher-risk buys at this point. At the same time, bearish stocks have also participated to a degree in this bounce, leaving very few clear laggards to select from. So heading into tomorrow, I’m going to keep my trading timeframe brief, and I’m doing my best to be patient with new swing trades. At some point we’ll have some better risk/reward candidates to select from (as well as cleaner patterns), but right now the overall price action is offering very little to work with.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: H, UAUA, PKX, FSLR, HXM
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
UAUA, APL, WLP, LCAPA, H
Bearish Watch:
PKX, FSLR, CNQ, HXM, ANW, JOE, CRK
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
Hi Jeff,
I have brought it up before, but with the market not bringing out many ideal trade setups that fits your preference, and with the heavy weighting of day trade candidates in the hideout posts, I would appreciate some more detail and input on the day trading aspects.
I think there’s been something like 12 or so swing trade candidates posted for the year, with the majority in the first 2 weeks of January.
After January’s shakeout, and the range bound market with fake breakouts I understand the setups aren’t that great – fortunately I didn’t quite “trust” the swing trades setups that came out since late January, so haven’t run any risks on that account, but considering the lack of good setups, I would appreciate some more “meat” on these day trading candidates you list.
I know SB isn’t a day trading site, but when you state a trigger price for a day trade, I would find it *highly* valuable with a follow up on how the trade(s) actually went.
Questions I think of when reviewing the videos are: When did you enter the trade, why (in case of chasing or not chasing a stock), what stop loss did you use, when did you exit and other considerations.
Don’t know if I am alone in this, but that’s my 2 cents.
Best regards,
Kim
Hey Kim!
Good to see you here and thanks for your comments. You bring up a valid point in that the recent conditions simply haven’t allowed for doing much swing trading. We’ve seen little follow through, and with the exception of 2 downward moves, the action has resembled what we saw late last year with slow grinds higher and limited volatility. That’s not ideal for swing trading, so I’ve frequently been focused on the shorter timeframes (day trading) by using setups which look good for a quick pop but not much else.
Those day trades are what I’m eyeing for my own trading, and therefore what I’ve been highlighting in the nightly Bandit Broadcast for all of you. Many days I can grab a few nice trades and make a day’s pay while waiting for opportunities to put capital to work for slightly longer timeframes with the swing trades. Other days I may take a few small hits, but overall it has proven to be a good income strategy for me.
You are right in that this isn’t intended to be a ‘day trading’ site, in that the purpose of the site is not to exclusively discuss or highlight day trading opportunities. Additionally, the format of the site has intentionally not been structured for the focus of day trading or day trading education (no chat room for example). However, day trades are still provided here when that’s the best thing available, and entries are offered with them so that you can at least see where I’m looking to enter. They are intended to be for traders who have some experience day trading, and do not need assistance in getting out. That’s for time efficiency on my end, because I want my focus on the market during the day and not on a chat room (just to give you some background).
But with all that said, I am happy to shed some additional light on my day trading so that you can benefit from it. I don’t see a daily ‘day trade review’ feature being added here, but I can address trades when asked and I’m glad to do that. I have a number of people who email me intraday asking these exact kinds of questions, so you can also feel free to do that.
By the way, I’m going to convert this answer into a post for the Hideout so that you can locate it easily in case you want to come back and review it!
When it comes to general trading guidelines for day trades, here are a few links you’ll find useful. There are some articles and some videos, but they offer insights into how I go about managing my day trades and the rationale behind some of them.
https://www.thestockbandit.tv/2009/05/tsbtv70-day-trade-management/
https://www.thestockbandit.tv/2009/01/tsbtv7-gauging-intraday-momentum/
https://www.thestockbandit.net/2009/09/03/stack-the-odds-for-daytrading-success/
https://www.thestockbandit.net/2009/11/09/managing-day-trades-effectively/
Beyond those, here are a few additional points I hope will help you…
* I enter at the prices specified in the video from the night before. I’m going off the daily charts for entries, and going off the intraday charts for exits. Is the stock trending? Is it creating higher highs/lows or lower highs/lows? Is key resistance or support being established, or is the stock approaching those kinds of levels? If it is, I’ll need to take that into account for the sake of risk management and look to ring the register. I’m watching for intraday patterns to emerge as well (exhaustion, rounded tops/lows, support/resistance, continuation setups where I might even add if I feel aggressive, etc.).
* I don’t want to chase a stock beyond that level, so if it gaps through my intended trigger, I’ll avoid the trade entirely since my risk/reward profile for the trade will have changed. There simply are too many stocks on the move to get married to one and chase it beyond a prudent entry.
* My stop loss from entry is most of the time going to be 1% (as outlined on the day trading strategy page). That limits my losses significantly, and allows for a risk/reward in most cases of about 3:1. Most stocks will make a good move intraday (when they run) of about 3-5%, so a 1% stop offsets that nicely and gives me ample reward for minimal risk. A more lively stock that might move 5-10% on a given day will get a wider stop (like 2%), but often those are either highly volatile stocks or the single-digit stocks, both of which are listed here rarely. So in most cases 1% is enough for me.
* I’ll look to book profits based on the intraday price action and the profits I’m looking at. If the stock is clearly losing momentum, I’ll take at least 1/2 my shares off. If the stock has approached a key level, I’ll exit. If it’s climbing at a sustainable rate with plenty of blue sky above, I’ll look to sit tight and just adjust my stop to an appropriate level.
* My stop does get adjusted during the trade. If I’m up 1% in the trade, I’ll usually tighten my stop to breakeven. And as the trade climbs more, I’ll make incremental exits (for example, often when I’m up 2% I’ll take off 1/2). Essentially I want to keep a tight initial stop, monitor the intraday chart (anything like a 2-minute, 3-minute, or 5-minute chart will suffice), and see how long I think I can ride the trade. I’ll use excessive strength to my advantage and offer out some shares, and I’ll tighten my stop with the arrival of consolidation phases.
So while I might not be able to post every entry/exit each day, or review the day’s trades since the Bandit Broadcast is a forward-looking newsletter geared toward tomorrow’s price action, I still am willing to discuss day trades and hope you’ll feel free to ask for help anytime you have questions. I won’t always be right, I’ll have losing trades and losing days, but I’m always happy to help out!
Hi Jeff,
Thank you for a long and thorough answer 🙂
I do think you have many good articles providing generic and sound advice on trading in general, much of which is also applicable to daytrading
You mention that you have a number of people that ask you intraday daytrading related questions.
Perhaps a daily day trade review could be done after hours and disseminated to these interested subscribers, but separately from the hideout/broadcast page or via email?
If only this could be done in consistent manner and format – I agree with you in that this doesn’t have a place in the videos, with them being forward looking.
I always liked your concise format for describing swing trade positions – what I am after for the day trades would be even more concise than that, like:
“AMED triggered long position on opening gap, filled at $61.85 with initial stop at 61.20. Out 10:16 when sharp pullback hit raised stop at $61.30
The sharing of information as a follow up on the day trade entry points you bring to light in the daily videos would be a logical step to get a sense of closure.
I can also see why you would be hesitant to mix day trading events with the swing trade aspect, as this may dilute the StockBandit focus/product, and may even get some subscribers in trouble (Ie. swing traders trying day trades and failing to manage trades efficiently)
Hey Kim,
It was a lengthy answer, sorry it kept going on and on like that!
You raise some good suggestions here, and I’ll have to think about it. My concern is that to report how I managed the day trades is going to be viewed as ‘performance’ and that would never be the intention of it – particularly because I will not be putting out stops/exits for the day trades and therefore those trades will still be managed by each individual. That’s the intention of them, to offer additional plays for those who are willing to manage their own exits.
Thank you for the food for thought, I will consider it!
Fyi, today for example 2 day trades triggered, but I did not take either one. Both H & HXM simply had too light of volume for my preference, so I skipped them both. HXM went this morning for 2% without me, but total volume was only about 40k at the time it triggered and it simply looked too thin. H went this afternoon without much momentum, again due to the light volume. For the day trades, I really like to see momentum, and unfortunately neither of these had it, so I let them go without me. Hope this helps!
Hi Jeff,
A long answer means you’ve given it a lot of thought, which is much better than just deflecting my query with a brief “no”, so kudos to both of us. 🙂
I wasn’t aware you didn’t take all of your listed daytrades – I have been thinking many times “Oh, Jeff took a hit on that one” when watching the behavior of some of the highlighted day trade setups.
That highlights my interest even more in seeing feedback on your day trading activities.
I view The Stock Bandit as a way of getting insight into the selection process of stocks and management
of (swing) trades in the short term.
What makes SB different from something like Stocktwits or many other blogs is that you provide a continuity in the selection and management process that is presented in a very consistent format.
That is to me like being able to watch over the shoulder of a more experienced person working fulltime, while I work on manage my positions.
I do understand your concern about the potential pitfall of having the daytrades being put on your “performance record” and pulling your swingtrade performance down – you would know your subscribers best of all.
With that said I do hope you’ll think of a way to swing it both ways
On a more trading related note, I noted you tweeting earlier today about VMI leaning heavy on $79 intraday when the indexes went south in the morning trading. When I looked at the setup I was more looking for the
continuation pattern on the long side if it could break back above $80.00 and $80.50 which it did not too long after your tweet.
Sadly I had to tend to my “real” job and will catch another one another day.