So a bearish outlook in conjunction with various pivot point levels (old school day trading stuff) could easily have me buy or short the QQQQ ETF (Nasdaq representation). I plotted the daily ATR based on a 10 day moving average which has been higher than 48 cents for the last couple of years. In fact the low of the last few months has been 88 cents. This is an acceptable move when applying a tight stop as any gain of even 5 cents can produce at least a break even trade.
So, a bearish day would have me shorting the stock if it nears the daily pivot point...although this strategy I have yet to work out... or buy the stock on a bullish day on the topside of the pivot. This is a single day trade setup per day and it either works or it does not. perhaps a 20 cent stop on a 200 - 300 share trade ($60 MLA).
I figure that a 20 cent VTSO off the start followed by some more trade management once it starts to move (using pivot points and support and resistance levels as stops and targets) in order to hold the trade for as long as possible with the goal of getting at last to break even as quick as possible. This is not my primary trade plan so it is allowed to cut a trade quickly for small profits as the entire goal is to see if I can catch more longer intra day moves based on the forecast than I lose on... without affecting other trades. I can even enter trades pre-market if I think it will work out well.
This will be the start of my stock trading in place of options. Even though this is not part of the day trading plan I like the idea. 200-300 share trades at this point are only going to take about $3500 with a $60 loss allowance.
Seeing as we have had many days where a bearish (or bullish) day was expected and all of our option picks ran away without us this gives me the opportunity to take advantage of the overall move without undue risk. It also sets me up for stock trading practice with the different available order types in the Elite platform now.
Examples of gains from this would be:
Friday = 70 cents (all 250 shares based on the startup cash float...this can grow each day if wanted)
Thursday = 40 cents
(Holidays for one week)
July 2 = 40 cents
July 1 = 75 cents
June 30 = 80 cents
June 29 = 60 cents
June 28 = 9 cents
June 27 = 25 cents
June 24 = 30 cents
June 22 = 80 cents
June 21 - 50 cents to $1 ( I will use 50 cents)
There is about $1,250 in profits in those simple little trades. Now I am sure that I might not get in all of them as well as that and others I could easily have gotten in better so that may work out in the wash. There are also about $130 in commissions to account for but all in all these are easy small quick trades of 250 shares using pivot points for entry and exit guidelines. Pre-market trading may likely add more to the profits as the levels are known at the previous day close.
Just an idle idea that I may try out in real trading upon my return on Monday.
Jeff.
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