Anatomy of a Day Trade

I was able to make a day trade this morning.

OSIP: +$.76

I have been swing trading these last couple of months. But I will probably be day trading more in this market. So I thought I would share how I day trade. I am be no means a good trader, but I use a system that makes money more times than not. Here's what I do.

When day trading, I basically use the same system as the HCP Group, whose newsletter I used to subscribe to. I have a list of about 120 stocks that I watch, which I am constantly updating. These are mostly market leaders and momentum stocks. For the last couple of months, I haven't been looking at these charts much. I've been trading lazy. But last night, I went through each stock, looking for some setups. I added both the 50 SMA and the 200 SMA to my charts, and I was very surprised to see how many stocks, which were leaders just a few weeks ago, are now trading near or below their 200 SMA. This obviously does not bode well for the market. I saw a lot of sloppy and bearish charts. Two stocks that were showing some strength were ICE and OSIP. Zanger also had ICE in his newsletter last night, so I had these on my list this morning.

When I am planning to day trade, I sort all of my stocks in QuoteTracker by VOL%. This shows me all the stocks that are trading at higher than average volume from top to bottom. I only want to focus on the top 10 stocks or so. This morning, ICE was in the top 10, and moving fast. As I was setting up an order, it blew through my buy point before I even finished setting up. So I just sat there and watched it mover higher and higher without me. Then OSIP started moving up the list, so I put in a Buy Stop at $42.01, just a penny above what I had selected as a good breakout point. I had a stop at .05% below my buy point. After it cleared $42.50, I moved my top to b/e, then trailed it as it moved higher. I was stopped just below my last stop at $42.80 for a gain of +$.76 per share.



Not a huge trade, but I was able to catch a good part of the move. If they were all that easy, I could make a living doing this, but they’re not.

I am still holding USO; otherwise I am in cash. I know I won’t have time to trade tomorrow, and Wednesday may not be worth it. Also watching FXE.