Thanks @Kevin . I appreciate the votes of confidence, especially from great trader minds like you.
Don’t mind talking about strategies at all. I’ve been day trading in some form or fashion since around 2010. Every trader needs to learn to do what feels most comfortable for them. There will be things that resonate with me that don’t with you, and that’s okay. But also because of that, those things will be more useful and seem more viable to me than they would to you. I try not to discount other peoples ways of trading, as long as it’s proven to work for them. There is no substitute for personal experience in this field.
Let me answer your 4 questions directly first, and then I’ll talk more generally:
- Almost all of my trades are based off of a support or resistance play idea. I started with that back when I started trading my own shares, and have never found anything that can replace conviction that comes when those lines either hold or they don’t. I especially look for plays that use overall market forces to force the issue at those support/resistance lines, which I’ll talk about more later.
- I try to keep my trades as absolutely simple as possible. More on this later as well.
- This changes based on the type of trade I’m doing. If I’m buying fds for a quick scalp, I’m almost always on the 3min. Most of my normal plays during the day are on the 5min. Things I’m tracking for larger information (like VIX, DXY) will be on the 15min, as well as anything I’m planning on holding for days. I find that the time frame used needs to match the intent of the play being evaluated.
- This is one of the areas I’m currently refining my processes on the most. Currently, I watch volume and those intraday support/resistance lines that are usually extremely transitory (like whole dollar numbers), but can screw you if they get sticky. If it feels soft, I’ll start to cut some of the position. Lately, I’ve been able to keep almost all of those cuts in the green, but sometimes they aren’t, and that’s okay. The play almost always ends up green in the end because I stayed light enough to go back in at a more sure support/resistance, and made back what was lost when that held. It doesn’t always work out in best case scenarios, as we all know. I’ve had times where I’ve cut and it runs, leaving me with little in comparison to potential. I’ve also had it dive further down than the support I averaged back into, making the bad play a very bad play. But in ALL cases, it was better to take smaller gains or smaller losses than to risk more. And as long as the play still can be assessed as viable, it’s worth averaging down imo. For example, if a play was completely based on a support holding and it doesn’t, then I cut. But if there’s a secondary/stronger support close by that I can look to, then I’ll hold to see if it saves me.
4b. Wanted to separate the last part of your last question because it was really important to me. Knowing when to cut a trade for a loss is imo the hardest thing any of us can learn. It’s both lazy and comforting to hold onto “bags” when all indications are that the trade is over. It’s hard and demoralizing to make that cut, knowing it’s gone once you do. I think all of us have had big losses where we’ve felt this. With options, it’s even more important that these feelings get managed properly and aired out so that we don’t lose everything due to hiding or freezing up. So for me, the only way to handle it is my 50% rule. If a position is requiring me to put more than 50% of my account total into it in order to “save” it, then it’s unsavable, and I’m just not able or willing to see it. If it gets to that point, I just cut it and start over. It’s happened (I think) twice in the last month, and I’m doing great now BECAUSE I didn’t hold. You may need to adjust the % to something smaller or larger based on your trading style and account size, but having a set go/nogo % will save you from yourself.
To that end, I’ve tried most strategies we’ve discussed in the trading group, and have tested and used most indicators available at some point in time. I absolutely do not claim to know even a tenth of the trading knowledge most of the gurus on here do, but have a lot of personal experience that has taught me how to trade for me. I have settled on a very straight forward way of trading (that honestly really started with the original Conq challenge account) - KISS (keep it simple stupid).
I try to use the information the group is always compiling and sharing (
you dd people, seriously!) to decide on tickers to target and an overall thesis to apply to my coming day/week strategy. I rarely come up with the start of a strategy on my own, but will tweak the one that resonates with my feelings and adjust it to my own way of trading to make it my own.
I buy and sell in round numbers, set stops and limits at easily identifiable markers, and do anything I can to simplify processes. There is enough going on that I don’t need to be complicating any of it with extra calculations or steps.
Things, like me not trading during the initial morning until the market shows what it actually wants to do for the day, my 50% or cut rule, or me trying not to carry intentional intra-day trades over to the next day, are three simple rules I’ve given myself to help me frame the daily picture properly and keep trading well each day.
But overall, it boils down to this: Take in as much “pertinent” information as you can in the shortest amount of time and make the most simple and informed decisions based on how that information gets processed in my brain QUICKLY. While I could (and have in the distant past) trade decently by analyzing what the Ichimoku Clouds are predicting, it takes a significant amount of brain space to use them properly and time to form a good signal. All the while, I’m wasting many opportunities for plays deliberating on that one indicator. Likewise, I could spam my screen full of indicators that would all tell me something pertinent about the price action, but then I’d have to analyze all of it, and that AGAIN takes a lot of time and brain space. Also something incredibly important to “get” is that, the more indicators used, the more likely some of them will contradict others, leading me back to missed opportunities. So instead, I try to work with what appears to be the simplest and quickest snapshot indicators for changes to the current price action of any given ticker:
- Bollinger Bands (easy and incredibly useful tool for seeing a lot of information in a single indicator)
- SMA 20 (quick check for trend)
- VWAP (decent indicator for when sentiment has shifted)
- RSI (oversold/overbought is helpful, but the least useful of the indicators I use)
- Support and Resistance lines (that either I drew, or came from the group)
That’s it (other than volume). Time frame is entirely based on the type of trade I’m making. Anything else ends up being noise to me, and slows me down, so I don’t pay attention.
Now, by only looking at those few indicators, I’m able to watch a lot more tickers at once and get instant snapshots of how each is performing with respect to each other and can process that information quickly. For that reason, I will (almost) always be tracking these 4 specific tickers: SPY, AAPL, DXY, VIX. Beyond the core, I like to find tickers that are doing interesting things with respect to each other and/or the market. Often that includes TSLA 
but any high volume ticker that can use the overall market direction as a catalyst for a play is game. In addition, I will regularly be tracking the charts for the 2 to 3 option strikes that I’ve started trading, as well as any tickers that have been identified by the group as potentially day-tradeable. Most of the time, I’ll have 2 screens of 6 tickers running on each and my third screen is setup for my “other work” and discord/forum, 4th screen is just video conference and market news.
Some days, like today, I have a fairly small time to trade, but most days I am trading the whole day. Either way, I try not to have a dollar amount target, but want to constantly be getting better at reading and reacting to the market. My trades are as much for testing myself as they are about making profit. Yesterday was a day where I was pretty down on myself after it was over, even though I had a VERY green day, and that was due to the fact that I felt I didn’t really get better at all and was lucky more than anything. I’m nowhere near perfect at it, but the growth from where I was a year ago to where I am now is incredible. A lot of that has to do with this trading community we have, but also to my personal focus on becoming the best trader I can be.
Hopefully I didn’t ramble too much and answered the questions well enough. It definitely ended up longer than I expected it would. I keep this journal mostly for myself, but I love the idea that it could maybe be of use to someone else. I hope that something I’ve said or done helps one or two of you, the way seeing in detail how some of the great traders in our group think their trades through has helped me.
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show entirely. Switched to SPY puts, guessed wrong on direction, and on what the market would do in reaction to things that were said. The ONLY thing going for me was my averaging. Getting in and out quickly really helped me keep on top of bad calls I made, and I almost always ended up green (except for the calls I tried at the end that told me I needed to stop).