Monday Trading Goals / Prospects

Tomorrow will be interesting after the return of the bulls last week. Futures are slightly down at 10pm tonight. Maybe we’ll see a gap down with a slight recovery for a sideways day. Lots of traders are looking to short the financial sector, and we are in slightly overbought territory so a pull back is likely coming. Whether it will be a light drop or to new lows, and when – are the questions. I think we will digest the gains a little before we go down again.

I’ll be paper trading on Monday. While I have many goals and rules that I want to follow, here are main ones tomorrow:

• Over-trading – I’m waiting 10 minutes before each trade using an egg timer. I tend to make back to back trades for two reasons: 1) Right after a significant loss, I want to make it up so I jump in without thinking. 2) When I think a rally or drop is coming, and I don’t want to miss out, so I enter with out signals. Waiting slows me down. Having a cap on the number of trades I make daily really isn’t good because the strategy I’m using depends on entering every good set-up I see and cutting my losers. The problem with my over-trading is that I make trades that have NO entry signals, but the 10 minute pauses me just enough.
• Market Structure: I want to determine as early as possible if we are in a range bound / channel day or if we are in a trending market. See my post from yesterday for details on this.

Here are the five stocks on my initial watch list tomorrow – these are day rangers or short candidates. I will add three pre-market movers in the morning.