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Trading Plan

  1. TREND → Start the day by monitoring the market trend.
    1. Daily candles → Begin with daily candles over the past month, what direction is it moving in?
      1. If it is trending up, be more willing to go forth with your long trades.
      2. If it is trending down, err on avoiding long trades and consider shorting positions.
    2. 5 minute candles → Advance to 5 minute candles over the last day. Include the extended hours trading view.
      1. When looking for an entry, wait for the market to pull back (also known as retracements). The market ALWAYS pulls back, it always gets too hot to handle and drives down, it’s a natural, temporary movement against the dominant trend. Wait for a TIC.N value in the negative red. A good rule of thumb for TIC.N marks:
        1. $0 to -$400 → Slight pullback on the market, mere fluctuations.
        2. -$500 to -$800 → Starting to get stronger, you could enter a long position but you are uncertain of whether this indicates a downtrend.
        3. -$900 to -$1100 → Strong indication of downtrend, avoid any long entries.
        4. -$1200 or more → Get the fuck out of long trades.
    3. Fundamental driver → What’s the reason for the market’s vector?
      1. Inflation
      2. Jobs
      3. Growth
      4. War/conflict
  2. ENTRY → As mentioned before, I wait for a retracement to enter a trade. I prefer going long on trades because of the inherent risk shorting a position can hold — but at the end of the day I will honor the trend in the market. I also start off with smaller share size especially if the market hasn’t fully established its trend direction yet. Then I ease into larger share sizes when I feel more confident in the stock’s behavior.
Drivers
Favorable Entries
Non-Favorable Entries
Volume
>2M shares traded, the higher the better
<2M shares traded, with
Price
I prefer volatility with my trades, which is why I prefer trades that are over $20. I’m most comfortable trading stocks that are around $75 - $500 because I’m willing to put more upfront capital on stocks with more volatility so I can quickly scalp what I need.
I never trade a stock under $5.
Gap Up/Down
Any spikes of >50% in price overnight — even driven by fundamental news, it still seems too hot for me to enter. I keep an eye on it, but seldom enter.
In general, I prefer not to enter on these. They spike up way too high for my taste because wisdom tells me the market’s always over-extended by the time the first hour or two in the market lapses.
Volatility
Average True Range (ATR) should be at least $.20 on a 5-minute candle when the price is under $20. If we’re trading something around $200/share, then I expect the ATR to be at least $1.00 on a 5-minute candle.
Any ATR less than $.10 on a 5-minute candle will be too slow-moving for you to trade. If you’re long on one of these slow movers, don’t be surprised if the price suddenly tanks after waiting hours for it to inch higher.
  1. EXIT → I exit a trade primarily by scalping. Unless I feel strongly in the market’s overall trend, I won’t hold onto a trade for long. I will be happy scalping off any value when I can if the DOW, NASDAQ, and S&P 500 are within a 0.5% margin improvement/decline. Until you get more seasoned with reading the charts, it’s better to take your loss while you can. There’s also general wisdom to place stop losses on your orders. I personally don’t place stop loss orders but am mindful of when to exit my trade. I keep an eye on it and measure my worth as a trader based on how diligent I am to pulling out of a losing trade.

When I’m conducting technical analysis, I look for support and resistance lines on the price to see how the market dictates the price. I mainly observe the SPY index and attribute its movements to the general movements of the stock price.

  • Enter trades when:
    • The market is trending in your position’s direction
    • The stock has had a retracement
      • How much consolidation? Volume?
      • Time of day?
      • How strong or tight is the consolidation?
      • What % must it retrace?
    • The .TIC.N is positive and trending upwards
  • After entering the trade:
    • Set a stop loss at $100 ($200 maximum)
    • Set an exit of $100
  • Stop loss should be at a $200 max loss
  • Max attempts in a ticker per day

Trading Philosophy:

  • Will you take a bunch of tiny profits (large volume), or will you take a few large profits (small volume)
  • How tight are your stop losses? Will you accept a low success rate in order to avoid large losses?