I’m going to reveal one of my intraday trading strategies on how to buy stocks on pullbacks but I want to make one thing very clear. I have a certain system that I’ve developed over the years that encompasses many different aspects from market timing, stock selection, when to enter/take profits/sell for loss using alerts and intraday charts, etc. My point here is that while this is one particular strategy showing exactly how I enter certain trades, there are other factors in play that I’m not willing to share and spill my entire system that ultimately determine if I take a trade or pass on it.
I am not in the business of giving away everything I’ve learned, but I do hope that if you’ve read my blog for a long enough time you can gleam a certain idea here or there to help you perfect your own trading. I like to embed ideas throughout my blog so you have to read everything and the casual blog reader who stops by and can’t bother to invest a few minutes each day to read and educate themselves, will miss out on the bigger picture.
I remember it was years before I ever considered looking at intraday charts and after I did I wondered how I ever lived without them. Therefore if I would have came across a post like this in my first year of trading, there’s no telling how far it could have jump-started my career. To be fair, when I started investing I didn’t even own a computer…. I did all of my research at the library and checked my stock quotes on my local newspapers delayed quote line. How archaic is that? Do any of you have a story that beats that?
Ok…to the trading strategy and I’ll preface this entire method by saying that you have to have an exit strategy determined before hand to tell you when your trade isn’t working. Mine is a combination of factors that run off of daily and intraday signals. I use Strategydesk to keep them in a watchlist,like this, and the column that says “Ult” is my ultimate sell signal. When it lights up and my alert goes off I exit immediately, without thinking.
Before this software I used another site, Stockboss, and that was a big hassle compared to what I use now. However, it was the only thing I had at the time and it worked very well when I actually had a job and could have the alerts sent right to my work inbox…
I was originally going to have this post out yesterday evening, but didn’t get a chance to finish it and I think it’s just as good as I can now show how these 2 charts reacted the next day to see how you could profit by buying stocks like this.
The type of stocks I like to use this intraday trading strategy are:
- Strong daily charts that have a catalyst like earnings news that fuel a big move up. A book I’m reading “Sentiment Indicators” calls this a landmark day.
- A certain lookon the 60 min chart. Below are two examples that have that look of strong move followed by a orderly retracement.
- Buy when it hits the 50ema. Hesitation will cost you money.
- Have a profit exit scenario and a loss exit scenario.
- Scale out of profits as you’ll never hit the top perfectly.
- Scale out of losses if the stock isn’t behaving properly.
The last point I have never heard talked about before but think about it for a minute. How many times have you sold a stock only to have it turn around and move a cool 10% on you. Frustrating…isn’t it. Now the reason why you probably sold it in the first place is because it didn’t act right or you had a feeling it was going to move lower. Those same emotions are responsible for a lot of missed opportunities.
How would of that trade been different if you sold half when you had a feeling (as long as you didn’t have a primary sell signal), and you kept the other half. That way you protect yourself by only losing half as much from that point, but you also stay in the game and position yourself to profit if the stock turns around. You may only break even or you could even make 5-10%, but more importantly than the financial gains are your emotional gains.
Here’s the next day and how the charts held up.
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