Swing Watch – Week of 3.19.2018


Shorts: AEM, CRC, GM, PLAY

As always, entries, stops and targets are at your discretion.  I always use stop limit orders as a trigger, so some or many of the tickers above will never trigger.  My first target depends on the momentum that carries me into the trade.  If it is weak I’ll look to take some off at 1:1.  If it’s strong I’ll move stop up to BE once it passes 1:1 and look to book some profits (up to half) at 2:1.  Stops should usually be tightened after entry unless you are slipping stops in just a few cents under the prior low/high.

Nice week everyone!


Swing Trade Watchlist for Week of 3.12.2018

Usually I scan through a few hundred (thousands?) charts on the weekends and add to a watchlist potential trades setting up.  These are liquid stocks >750k avg volume, over $10, no ETFs and generally just had earnings.

For visual representation I’ve indicated the level of entry (white line), blue line for 1R target and the red line is the initial stop.  Generally, I will tighten this as price goes in my favor.

Some more notes on my trading style:  In my limited experience trading (but thousands of hours of chart reviews and trades), I’ve put a lot of trust into momentum.  If the price hits the 1R target in a day or two with strong wide range bars, I’ll almost always let it run without taking any profit and hold out for partial profits at 2R and then 3R.  I will move my stop to break even at this point as well, as strong momentum countered with even stronger momentum is not a good sign for your trade.

If price is making consecutive up days (for long) and hits my target within a few days but not as strong as previously described, I usually look to take off 1/4 of my position here and tighten my stop a bit or move it to the point where opposing momentum would nullify my edge.  If price just doesn’t do much after entry I’ll usually tighten my stop aggressively.   These volatility contractions can just as easily go against you as for you if even if you are taking it with trend.  Most of the time I won’t have a full 1R loser unless the day after entry it just shoots against me strongly or it was very tight to begin with.

Some long trades setting up: (NOTE: I always use stop limit orders to trigger me in with the momentum)

BBT.  Pressing 52 week highs with good momentum.  Long somewhere over Friday’s high should be a good trade to take.

BBT long


IPG.  Showed a nice gap up after earnings.  Has made a complex pullback and is now consolidating with a little momentum from Friday’s trading.

IPG long



FLO.  Similar set up to BBT (recommend choosing one and not both).

FLO long


WLL forming a bull flag.  Entry over Friday’s highs or if you want, the high made earlier in the week.  I don’t think it should matter as the momentum should carry it higher regardless of a few cents entry via breakout method or entry on strength.

WLL long


Since the market has made a pretty strong push up this past week, I would expect that the long positions may have a little trouble hitting their first targets quickly – only the stocks with relative strength will be “easier” trades.

Even though the market has been strong lately, I feel like a pullback is coming and the stocks that are weakest should melt down relatively quickly.  So take that into consideration when entering a short position this coming week.



Some short trades setting up:

ACAD.  Very big sell off with a hesitant pullback.  Nice bear flag showing with 3 or 4 days of consolidation.  Usually a volatility contraction signals a big move is coming (not always) and best to stick with the trend direction on that. This should go in your favor relatively quickly.  Stop is pretty tight so there isn’t much wiggle room to tighten your stop should it trigger you in.

ACAD short



COTY.  Getting bored yet?  Yes, it’s the same patterns over and over again. Strong sell-off with a hesitant pullback.  Has been consolidating the last few days with a false breakout higher.  Similar story as above, should be a quick one should you get triggered in.

COTY short


EXEL.  Ditto.

EXEL short

IMAX.  Ditto.

IMAX short


TOL. Ditto.  Maybe a bit less appealing to me as the pullback is showing a bit more strength than I like.

TOL short



WTW.   Not quite as nice as the others as it still needs some time to develop.  I would wait and see what happens here with WTW.  If it consolidated for a few more days without showing too much strength to the upside you might be catching the first pullback in an extended down trend.

WTW short

Swing Trade Follow Up

Mid-day recap and follow up for those of you who may have read my previous post.  SCCO and UA have triggered long.  I didn’t take the BVN trade, although it did trigger today.  The reason I did not take it was that it was relatively weak to the market yesterday.  I wanted to see stocks with relative strength since we are at at that point in the market where the upside may be limited before we see another correction to the downside.

If you took SCCO you are a happy camper today as it gapped up nicely to about a 2R profit.  I took off 25% of my shares here as I think the momentum should carry it higher.  UA is seems a bit slower which I expected with the recent semi-sharp sell off.

I will look to take 1/2 off of UA at about 1:1 or 1.5:1.

Also, these days I have been exclusively day trading stock X (US Steel) because of the volatility with Trump’s talks over NAFTA and tariffs on steel.  If you are looking for a nice stock to trade with nice trends and good intraday volatility and liquidity, X is a great candidate.





Swing Trades Setting up for March

Been a while.  I’d like to post some swing trades I’m looking at to set up this first week of March.  While I have been active everyday with day trading I still do my homework and look for opportunities swing trading.

First up is UA.  Been beat up pretty bad over the past few years and has made it’s first strong attempt to break this down trend.  Had a big gap up after earnings with (albeit a bit strong pullback) consolidation looking for the next leg up.  Entry I’m looking at is somewhere above $15.

Target can be a measured move from the previous leg up or you can manage this however you usually manage your trades.  As I’ve mentioned I do like to take off some at 1:1 depending on how strong it got there.  Generally if it reaches my 1:1 target in one strong move, I’ll take off less or none and wait for perhaps a 2:1 move as this momentum can usually carry it a bit further.  If it is hesitant getting there I’ll take off up to half at 1:1.



Second stock is SCCO.  Forming a really nice bull flag on the daily.  Although the pullback is not that deep, this looks like it could really spring out of there.  Entry somewhere above Friday’s high but I will look to get out of this one quicker if it doesn’t go my way immediately.   May become a complex (2-legged) pullback but I like the chances of this one springing out of there if it does continue higher on Monday.  Be on the lookout for a second entry if it does pop on Monday but retraces a bit after.



Third on my watch list is PNM.

This one is a short entry.  Forming a nice bear flag on the daily.  Has been pretty strong to the downside so this may be overextended a bit.  I like going short on this under $35 and this one should move quick as well (if triggered).  If after entry it is just hanging out or I get some strong push back to the upside I will look to exit before my full 1R stop is hit.


Other stocks I’m keeping an eye on are FOSL and BVN to the upside.  Both are consolidating near highs after a strong push up.  FOSL is maybe a bit too slow of a mover but worth looking at the chart.  BVN is also not the prettiest chart but could see a big move up over the highs if it does go.



Whoa, been a while

I made a big move in my life not long ago.  Recently I moved to Berlin, Germany and am enrolled in a full-time MBA course.  So without saying, I haven’t had much free time.  That doesn’t mean I haven’t been trading, though.  Actually, my school schedule allows for me to still trade 3 or 4 days per week.  Since the market opens here at 3:30 PM, it’s a great timing to get things I need to get done in the morning, trade, then have dinner and enjoy my evening.  Perfect.

So, I have still been swing and day trading actively.  My swing trade account has been steady.  Still trading trends, watching out for high short interest stocks where long setups are forming (to squeeze out those nasty short shitholes – thanks Trump) and my day trading is still improving (not consistently profitable yet).

I will try and upload some charts of my daily trades that I feel might help others.  One big improvement I have made in the last few months/weeks is recognizing patterns.  Sure, it’s obvious to spot bull flags in a TOP 10 NASDAQ stock that’s on stocktwits, but spotting patterns in other day trading stocks is not so easy.

It’s been about 7 months that I’ve been day trading now.  I have winning days and losing ones but one thing I need to work on is my overtrading.  Right now I keep about 8 charts on my monitor and watch for setups coming and trade them as they do.  Problem is with 8 charts, you will probably get at least 10 setups a day and your mind is everywhere.  Trading a triangle on this stock, to a pullback on another.  So I’ve decided this week I’m going to reduce that to try and focus on maybe 4 stocks to trade per day.  Hopefully this reduces my overtrading.

Here’s a stock I’ve been trading awesome lately.  This was one of my best trading days ever.  Got long on a triangle, took some off, added on the pullback and rode it up to almost the high of the morning.  Was really happy with this trade and should’ve shut down my system after this.  Of course I went after a few more and gave some dollars back to the market.

2018-01-09 XNET


Focus is a Necessity

It’s been a few weeks since I have been able to put my thoughts down on here.  I recently moved from Korea to Berlin.  Although I am still getting used to my surroundings and moving things, I was able to trade the last week or two.  And one thing I want to focus on is focus.

Remember when you were in high school or university and you had a tough exam coming up – one where you had to get a good grade or you had to really put in the time and effort to do well.  And do you remember how you went into the test?  Was your mind wandering?  Were you focused on what questions could come up?  Did you daydream about random things?  Chances are, if you did well on that exam, you were focused on what questions could come up, how to answer questions should you maybe know the answer but aren’t 100% sure and you probably were in the proper frame of mind with enough sleep or at least caffeine to keep your head in it.

Why is all of that important? Well, day trading requires this level of focus and commitment EVERY SINGLE DAY.  I went into a few days last week, fresh off of my move to Berlin, with bag still unpacked.  My mind was on documents I needed certified, appointments I had to make to get my visa and whether or not I’d be able to find a reasonably priced apartment to live.  Before moving, I had been doing well day trading – so I thought “I got this.”


Went into the trading day with my mind everywhere else but trading and got run over.  I thought that just by seeing the pattern and entering that the world would surrender to me and give me my profits.  I didn’t go in with a plan, when to size in, where my stop would be, where to take profits.  Nothing.  I thought I had it all figured out.  And the worst part is, I traded like this for probably 3 or 4 days straight, thinking it’s just a numbers game and I had a few bad trades.

Only this week did I mentally prepare for the trading day ahead.  I scouted a watchlist (reason for the gap), drew pre-market lines of S/R, had my bias for direction, patterns for entry in that direction of bias and the focus to stay patient and let my trade work out as I envisioned in my head.  Just like that biology test that I aced in my sophomore year of high school.  All the work was done before it.  I just had to execute.

So for those of you hitting a rough patch, think to yourself – am I really focused and do I have situations mapped out before I get into it?

Bad scenario: If you are throwing up a few charts of stocks 10 minutes before market open that you think you might like (or that you got from stocktwits), with no pre-market bias, no areas of potential interest and just saying eh, I’ll risk $100 on this and enter with no target, a sort of kind of logical area for a stop loss and just exit if it hits my stop or I’ll take profit if I’m kinda in the money (not sure how much in the money).   I don’t focus on the spreads, volume and use market orders to get in and out. NO.  Don’t do this.  You’ll get run over.  Repeatedly.  Or at least suffer death by a thousand paper cuts.

Better scenario:  30 minutes before open I have 6 stocks on my watchlist.  I use my ThinorSwim scanner as well as market top 20.  My 6 are all gapping up or down and the SPY is gapping up/down and these stocks are showing relative strength/weakness.  The gap is clearing support or is gapping right into strong resistance.  I’ll focus on the ones that have resistance far from my anticipated entry or the gap has cleared resistance.  I draw lines where pre-market S/R has formed as well as prior day.  I generally stick to using the 2-min and 5-min charts.

Market opens.  Stock ABCD is approaching that area of resistance I drew pre-market.  It is forming a breakdown/breakout pattern that I really like trading.  The spread is tight, volume is good.  Stop limit order placed .01 cent below this line so it’ll trigger as soon as it hits.  Stop is placed above the previous swing high/low or opening price.  Order triggers.  Good volume on the pop and looking for follow through.  If it doesn’t follow through I may look to reduce size.  First target is 1x my risk with 50% of my shares.  First target hit.  Now price is pulling back.  Do I want to sit through the pullback and leave my original stop in place (which means it’s a breakeven trade)?  Or should I move it to break-even and squeak out with a small gain?  Market (SPY) is moving with my trade so I will leave my original stop in place and it showed good momentum on the breakout/down.  Manage from here.

See the difference?

So if you are having problems or streaky periods of wins and losses, consider your focus during the trade.  The difficult part of trading is not the pattern recognition, entries or the exits.  It’s the focus required to do well every single day.  You are taking that tough biology exam or SAT or university entrance exam every single day when you trade.  It’s mentally exhausting but it’s what the market requires to be successful.  So ask yourself, are you really preparing and focusing?  Did you have a fight with your wife or did you have a small fender bender and stressed about the car repairs?  Sometimes it’s better not to trade.

It’s tough and I still struggle to get into that mental capacity every day.  I find going for a run before market opens or some mental preparation exercises like meditation or whatever you use to get your mind right.   Try it out.  Let me know how your trading is affected.  Peace.


Ways to find stocks to trade

Wanted to make a sweet and short post on resources I use to find stocks.  Finviz is a great resource, but scanning and scouring hundreds of charts gets tedious.  Not only that but you start wanting to see what you want to see after flipping through a few pages of not seeing much.  I realized I need to find a better way to search for stocks to not only day trade but swing trade as well.

One way is to find stocks in the news.  These are stocks that will see institutional money and new investors (whether it’s into or out of the stock is up to the charts).  Here is a great page to find just that.


Some people pay hundreds of dollars for in play by briefing.  This is a great free alternative.  Here you can see which stocks have heavy pre-market volume as well as which stocks are gapping up and down.

Don’t want to read through all of that and get right to the list of gappers and high volume pre-market movers?  You sound like me.


Boom.  30 min before market opens it’ll give you a list of all the gappers plus their volume. Click gap-down tab for the gappers down.  Be sure to check up on why they are gapping.  (Buy-outs won’t move much, common stock offering don’t move much either).

Those are great ways to find stocks to day trade for the day.  What about swing trades?  Well usually a few days after they gap, you’ll see either a nice breakout, pullback or breakdown pattern forming as people sell off from the gap ups or buy their shorts on gap downs.  This gives a great swing trade opportunity several days after the big gap and even if you missed it on the day trade side, they provide ample opportunities to get in on the swing trade side.

Hope this helps  some of you find some consistency in which stocks to trade.  I think searching for stocks after market open or just randomly flipping through charts is a losing way to trade.  Prepare days in advance or pre-market how you want to trade and let it come to you.





Moving soon – Busy!

I haven’t been updating the blog lately.  My wife and I are getting ready to move to Berlin, Germany at the beginning of September.

I have still been day trading about 3 days a week and taking less swing trades than normal.  Only because I don’t have as much time to keep an eye on them.  Unfortunately, I thought I could manage and just set stops, targets, etc. but I took 2 big losses when stocks gapped down past my stop order and I didn’t notice until I logged in a few days later to see that I am down 2R more than I should be.  Lesson learned.  Don’t get too complacent with your trading.

Right now swing trades I’m in are only SBUX from $55.50 (working out really well so far, I’m adding if it breaks below $52.99 today).

If you followed my squeeze lists a few weeks ago, you’ll see that ATHM has finally made someone call “uncle.”  I entered, stopped out, entered, stopped out multiple times.  Whoever was shorting this stock had deep pockets and was willing to just keep adding to their short position, regardless of how it traded.  I gave up.  It finally squeezed.  Ugh.  Guess whoever was holding their short position finally had enough.

Hope to get back to posting regularly after the move sometime in October.  Until then, happy trading everyone.



Day Trading Setups (Holy Grail?)

I am on the road to have my first profitable month day trading since I have started day trading.  I probably took about 2-3 day trades per week starting back in January or February up until April.  I was up a little, down a little, back to break even.  Since I couldn’t take more than 3 trades per week due to the PTD rule, it was a good way to ease into it.

In May I finally opened up a proper day trading account.  First month did not go so well. The mistake I made was over trading.  Having the freedom to move in and out of trades as I please was more of a bad thing than good.  So I lost about 10% of the account.  My P/L was actually not so bad, it was the fees and commissions that took my account down so much.  Some days I was in and out 15-22 trades.  I read about other guys doing shit like that and said what an idiot.  Who takes 22 trades in a day.  Yeah, well……

Second month was a little more of the same.  I was taking less trades and started seeing some profits.  So I immediately increased my risk per trade and 2 bad days in a row and I had loss all of my gains I had made.  So now I was down about 15% of the account.

Third month, July, is when I am finally seeing some consistency.  Took it slow with my risk.  Taking less trades, being patient with the setups I am familiar with and tracking tracking tracking everything.  Tracking is so very important.  People say knowing yourself as a trader is the holy grail.  Well, you can’t know yourself unless you track what you are doing and finding out what you do well.

I downloaded a trade journal that lets you track pretty much everything and it computes your win%, setups that work for you, time of day, which profit taking methods work best and so on.  So now I know from the data, what has been working and what hasn’t.  A real eye opener.

I’d like to share with you guys what has been working for me the best.

July (first profitable month) statistics:


Win % – 53%        Long – 30%         Short – 64%

Payoff Ratio – 1.96 (winners are almost double my losers, winning % at 50%, I’ll trade like this all day every day)

This also tells me I’m more successful taking shorts.  So I adjusted by only taking the absolute best long setups.  I don’t even look to go long unless it’s shouting at me, take the trade, take the trade!

Time of Day Performance

  • 9:30-9:50 – 61% win
  • 9:51-10:00 – 40% win
  • 10:11 – 10:40 – 20% win
  • 10:41 – 11:14 – 50% win
  • 11:15 – 11:31 – 100% win (only 1 trade taken)

I win mostly right after the open.  I have a bias based on the daily chart or gap and take the trade.  Not only do I win the most here, but it also nets me the biggest profits.  So now I actually don’t really take trades after 10:00AM EST and only manage trades I’m in after that point.  Unless something is absolutely shouting at me to take it, I’m very hesitant to trade after this time.

Entry Setups (Don’t mind the abbreviations, I’ll explain them in a later post)

  • TBOP – 0 for 2
  • TBDP – 1 for 1
  • 1m PB – 6 for 13.  1.7 payoff ratio
  • 2m PB – 3 for 4.  1.85 payoff ratio
  • 1m 3BP – 4 for 5.  1.76 payoff ratio (my 2nd favorite trade but this setup doesn’t come along often and when it does you have to be quick quick quick)
  • 1m ORB – 3 for 4.  1.73 payoff ratio (and highest payout expectancy – my favorite trade because it makes me the most)

Profit Taking

  • Fixed Target – Set a 1.5 to 2x R target based on the setup.  ORB and 3BP do best with fixed 2R-3R target
  • Dynamic Target – 1/2 off at 1R, 1/4 off at 2R, 1/4 off trailing the swing/pivot.  Also works well on the ORB and 3BP setups but seems to work best on the pullback setups.  And actually taking off 3/4 at 1-1.5R is best.  I’ll explain why…..

Before I started tracking my trades, I had no idea what was working and what wasn’t.  I just took trades based on technical analysis books like pullbacks, breakouts, etc.  I usually used a 1 min time frame and just kept doing it and doing it and taking targets whenever I felt like it was a good time to take them.  NO.  Like a parent telling their kid.  NO!

Track your shit.  It’ll open your eyes and give you the confidence you need to let the trade work.  And of course I am still working on letting trades develop and following what the numbers tells me but it is hard, of course.  If you don’t track them, you’ll never know how to approach profit taking for a particular setup.  And I really believe each setup will yield different profit potential. You won’t know how much money you didn’t make because you aren’t tracking it.  Again, different setups yield different profit opportunities.

For example, in my experience, taking a pullback trade after the initial move has made its move or the trend has already been established usually won’t give you as much.  Get in and get out.  Everyone has spotted it already.  The big move from the open has already happened.  You’re now in it from the crumbs.  So take your 1-1.5R and move on.  You’ll probably have a higher winning percentage but smaller wins.

Taking the opening range breakout will yield you much better.  Because that is the “igniting” move of that stock.  That is the move that basically starts the trend.  So of course, you will most likely be able to get 2-3 or more R out of it.  You wouldn’t know this without tracking your trades though.  Winning percentage will be smaller, but you’ll win bigger each time.  Know this before you take the trade and set your target accordingly.  Because if you still take profit at 1R like you did the pullback trade, and it only wins 40% of the time, you’re a losing trader.  If you know this setup nets a minimum of 2R 80% of the time it moves past 1R and it wins 40% of the time, you are now profitable.  Same setup, same entry, just having the confidence and knowing when to hold on makes you a profitable trader.  

Taking a breakout or breakdown in the middle of the day is usually not as lucrative as in the beginning of the day.  I found these setups get stuffed pretty quickly as well.  So take off 3/4 of your position at 1R and see what the rest can do.  Or take off the whole thing at 1R.  It all depends on what your tracking journal is telling you.

So, don’t fall into the trap of setting an arbitrary target each time without doing your research.  I fell into the trap of just setting an arbitrary target on many of my trades and when I go back and look at them, I realized, damn these are good entries, but instead of taking off half at 1R or exiting all at 1.5R, I shot for all or nothing at 3R and came home with a full stop out.  Shit.

Yeah, taking a pullback off of an already established trend on a slow stock hoping to get 4R is not a winning proposition.  Taking a trade at the open based on a breakout on the daily chart with positive earnings report?  OK, yes 4R is realistic.  Go for it.  See what I mean?

By no means am I a super profitable, ultra successful trader just yet.  But I’m getting there.  And each month I’m improving.  So here is my suggestion.  Take a month or two and risk small size.  Risk $20 or something.  You’re going to lose money during this time, no doubt.  This is time for you to track everything.  Do not take stupid impulsive trades (that’s why I say risk $20, if you do it on sim you’ll start fucking around too much).  Take the setups you learned.  Just set an arbitrary target at 1.5R or something.  At the end of the month find out which setups win the most and least, go back to the charts and find out where the best profit targets would have been.  Maybe 1.5R is perfect for your specific setup.  Track how much you would’ve won at 2R.  Track it how much if you scaled out half at 1R, half at 3R, etc.

By the end of a month or two you’ll have a decent idea of winning percentage of setups and which target is most profitable.  If you have a setup that wins 30% of the time but the times it wins it goes 6R, great.  Set your target at a little less, maybe 5R and figure out if it is still a profitable setup.  If not, dump it.  You have a setup that wins 80% of the time but only nets you .8R?  Might seem good, but after commissions and fees it’s a losing setup.

Point is you’ll only know if you track it.  I never understood what successful traders meant by “you have to work hard to make it at trading,” and I think this is what they meant.  It’s not fun.  It’s like doing chores.  But I make time every week to do it.  And it has made all the difference so far.  Put in the work, track your shit, adjust your plan accordingly.

And when you start making money, send some my way.









Getting Paid – Trade Management

A topic I have been researching a lot lately is taking profits during a trade.  That’s right. Payin’ yoself!  We’ve all been in the situation where we are in the money nicely and price just barely misses our target only to watch in horror as it comes back to entry and even potentially stopping us out.  No, no, no, no, no.  Can’t let this bastard take all that I had.  Get fidgety and next thing you know, I click the button.  Close trade for a tiny profit or break even.  What the &*)$ the trade is now going back in the original direction.  Shit.  Don’t you hate that?  So what do you do to avoid it?

Before you continue: I would say that I am proficient enough now at choosing the right trades to get into. Usually they do move in my favor from entry at least 60% of the time.  The other 40% of the time, prices either reverse or go my way a little bit and reverse or consolidate more.  So that means I am picking the right trades to get into when I stay disciplined on my entries.  If you aren’t at this point yet, probably better you keep working on your entries and then focus on trade management when you get some trades going your way.

You’re picking the right trades and it always seems like you are watching in horror as you see profits running away from you, right before that target is hit.  You don’t want to keep taking tiny profits and but you hate seeing your profits disappear.

Well, if you were like me, every technical book out there stresses – You need to set at LEAST a 2R target and anything less is not worth taking.  Ok, true.  You should only take trades with the POTENTIAL to gain at least 2x your risk.  Don’t confuse the two.  What do I mean?  Well, you see a pullback coming, you want to short.  The previous swing low is about a 2R profit away, so it’s reasonable to take the trade.  Stop above the swing you just entered short on and we’re off.  Except price lurches down, almost getting to that 2R, reverses sharply and you’re now sitting at a break even trade.  Ugh.  I can see the pain in your eyes.

What’s the solution?  Well, I pay myself on the way.  I stalked the trade, I made the correct entry and I was right about prices continuing.  Why shouldn’t I take some home with me?  So, regardless of what technical books tell you, I’m going to let you guys on a little secret that has turned me somewhat profitable swing trading and improving my day trading.  PAY YO SELF (with certain requirements of course 🙂 )!

Let’s review conventional profit taking methods:

  1. Set it and forget it.  The target is at 3:1, it either hits stop or target.  For me, too strict, too arbitrary, and it just eats me up to see a trade miss my target by a penny and reverse for a full loss.  I used to do this.  Didn’t work.  So, no go for me.
  2. Trailing your stop above or below the previous bar.  So if you’re using 5-min bars, you just trail it down on a short above the previous bar’s high.  Except for me, price always seems to “tap” me out and then continue on down.  Then it feels like some troll is just behind a desk, stop searching.  Again, not for me, usually.
  3. EMA exit.  You put some EMA you like on the chart and ride the trade until prices touch it and you exit.  Not a bad idea, keeps your emotions out of the trade as long as you stick to your rule and usually keeps you on the right side of the trade.  But then again you can miss out on a lot of gains as you’re most likely taking profits at the end of the pullback.
  4. Pivot exits.  You entered short, price is going down and you wait for the next pullback.  Excruciating as that sounds, some patient people are able to sit through 3 pullbacks and take profit at something crazy like 8:1 towards the low of the day. You simply put your stop above the previous pivot/swing high or low and keep riding the trade up or down until it is hit.  Requires zen-like patience and balls of titanium.  Again, not for me.
  5. Into strength – a lot of those penny stock guys like to do this.  You get a nice big spike and sell some of your profits before the pullback.  Not a bad idea as usually after you get that nice surge, a pullback is underway anyway. Hmmm…

So what to do?

This is where you have to know yourself as a person to improve.  Are you fidgety and hate seeing profits wash away, like me?  You want to stay with the moves that are big but get out of the ones that are quick?  How to know when which is which?  You don’t! So, combine profit taking methods!

Usually with my swing trades, I do the following:

  1. 1/2 or 3/4 size at 1R or 1.5R.  Here is where discretion is important.  Price has reached your 1R and on the intraday chart looking faaaabolous for more.  It is “spiking” on the daily. Wait.  As soon as price starts sputtering on the 5 min chart, take off half or more (you are selling into strength).  Usually you can milk out about a 1.5R doing this rather than the 1R.  If you take off 75% at 1.5R, you will have a profitable trade even if your original stop is hit with the remainder and here is the most important part for people like myself.  Or maybe price has been shitting around for 2 or 3 days right around your 1R.  Take off 3/4 or half depending on how you feel about it continuing.  No shame in taking some money at your initial risk.  The little guy in my head saying “take the fucking profit, man, take it and run!” is happy and calm.  It’s like I just gave him a fidget spinner.  No longer can I lose on this trade.  I am a winner.  I like winning.
  2. If you want to move the rest to break even, go ahead.  If not, you can’t lose money.  Or you could even take off 1/4 should it go to break even.  Never thought of that huh?  Yeah, put a stop at break even for 1/4 and the last 1/4 at your original stop.  You do it on winning trades, why not on trades going against you?  That way if it does barely stop you out at break even and start moving for you again, you can’t sit there screaming WTF@#%.  You’re still in the game!
  3. Since you just paid yourself the risk you took on for the trade, you can now be a bit more patient with the last half or 1/4.  Here is where you can switch to a different method that is used to squeeze more out of the trade. I’d say a higher EMA (20) and pivot methods are better for staying patient and riding the trade.  Trailing behind previous days is a bit spaz if you already took profits and selling into strength you probably already did when you took your first half off.  Unless you get another day or two of nice momentum movement, then trailing below the previous day is not a bad idea.
  4. Price is moving along nicely.  You are now up to like 3-4R on your second half.  Prices are pulling back to a lower EMA like the 10 (a decent place to take profit on the impulse wave which is probably beginning to pullback).  Wait, don’t cash out just yet.  Take off 1/4 of that now, let the other 1/4 ride as a set it and forget it (where you can sometimes really cash in).  Put your stop to break even and let that last 1/4 go until a target is hit that you set (52 week high, previous swing high, whatever) or your stop is hit.

Note the limit for taking profit is always at least 1R.  Do no start taking some off the table if price is just barely in your favor.  That guarantees you to be a losing trader.

So you get to combine all of the methods into one just for you.  You can be spaz and take off some quick and zen Buddha at the same time and let some ride till the end.

I’ve had so many trades this past month basically only give me step 1.  Maybe 70% of my winners.  But if I hadn’t taken off some at that point, I’d be a net losing trader right now.  Would letting those 30% that went beyond step 1 in a full size position made me more profitable?  Ehhhh, maybe, maybe not.  I should probably do the math, but haven’t. And here is the reason why:  I would’ve definitely lost my sanity and probably gone into “shit %^$# mode,” and start making undisciplined trades if I had so many losing trades or winners turn losers.  So very important.

I am now trying to implement something similar in my day trading.  Things move much quicker and it’s tough to decide which method you want to use with which trades.  I’m still ironing it out, but I think this is the closest to the “holy grail” you will get and once I can implement the trade management that suits my personality on a regular basis, I will be profitable day trading.

So try it out.  If you are still losing money, your entries aren’t good.  If your entries are good enough to go at least 1x (setting a low bar, but that’s how I like it) your risk, you can make money   Take a look at your past trades and make the assessment.  Are most trades you get into going against your sharply?  Practice entries.  Are trades you enter, doing well and then reverse?  Change your trade management.

And for me, it took probably a solid 6-7 months before I was making “good” entries, and I am still improving.  So don’t be upset if you aren’t at that point yet.  You need a setup, trigger, assessment of the trend and chart, etc. but that’s a whole different topic.  Once you master getting in, you gotta master cashing in.

Happy trading ya filthy animals.