StockFetcher Forums · General Discussion · Holy Grail to daytrading here<< 1 2 3 4 >>Post Follow-up
stargazer
12 posts
msg #88045
Ignore stargazer
modified
2/10/2010 5:40:44 AM

Hi I'm new here, but not to stockfetcher.


I had a daytrading system going with the Run Forest Run scan, back in mid July of 2009. I picked these 3 stocks: SPF, MBI, and BZH, and the system would involve QuoteTracker, opening the charts for the 3 stocks, 30 minute charts. And I used the indicator Slow Stochastic(28,1). Not 14, but 28,1

Here's how I traded.

I looked at the stocks where the slow stochastic(28,1) was ABOVE 80 when the markets opened in the morning, or it shot up above 80 within the first few minutes. It had to stay there for awhile, about 20 to 40 minutes or so, and then I would watch it, if the slow stochastic crossed below 80, and kept going below 50, and then 20, that would be my cue to watch it like a hawk for the buy signal.

Once it was down below 20 for awhile, the buy signal would be when it moved back up above 50, that would be my signal to put in a buy order. Below 50 bearish, above 50 bullish.

After my buy order went through, I would immediately put a sell limit order of 2% above the buy order. and sure enough it would always hit my 2% sell order in the morning and I would make my profit of $240 after commisions. This starting out with just a little over $10000 for daytrading purposes.

I would do this every 3 days, and at least one stock would do this where the slow stochastic would be above 80 at the open and stay there for awhile, and then dip below 20.

MY RULE was that it had to do this before 10:35 a.m., if it didn't dip below 20 by then, I wouldn't trade, but more often than not, one stock out of the 3 would do it.

I went from mid July all the way through October 2009 daytrading this way WITHOUT A LOSS and reinvesting the profits that I made. I went from $13000 to $17000 dollars during that time if I remember correctly.... It got to where it was almost boring, it was predictable.

UNFORTUNATELY, it all ended in November. I would go for days without a trade. I tried finding other stocks from the Run Forest Run scan, but can't find any where the slow stochastic would do this.

It's crazy, was it a fluke?

I think the reason it doesn't work anymore for spf, mbi, and bzh is because the Average Day Range(10) is kind of low now? I think back then it was kind of high around 9 or so? I could be wrong..

I thought I found the Holy Grail to daytrading, but it only lasted for a few months. Anyone got any ideas? We all need to study this and see if we can't find anymore stocks that do this (with the Run forest run scan).

By the way, after coming down from 80, the longer it stayed below 20 the better, the lower the stock went down the better (becoming severely oversold in the morning). And then cross above 50 (buy signal)..

When it dipped below 20 (by 10:35a.m.) and IF the stock kept going down, you're actually getting into the lower shadow of the candle, the little tail that you see under the candle for the day. But sometimes it would dip below 20 and the stock price would still be above the open price, SO EVERYTHING WORKED, just as long as it crossed above 50 and gave you 2% profits.

$13000 plus 2% = $260 dollars. I reinvested profits and was compounding, how much would I have had in 3 years? Almost a million?

That's what I was thinking during that time. 3 and a half months without a loss! And it was my first time daytrading..

bankwalker
30 posts
msg #88066
Ignore bankwalker
2/10/2010 12:21:31 PM

You need to write a filter to pick out the stocks that currently fit your method, not try to force your method on those 3 stocks until the end of time.

four
3,995 posts
msg #88067
Ignore four
2/10/2010 12:48:26 PM

We are told that a coin flip is heads or tails (2 options).
Sometimes the third option occurs... edge.

http://en.wikipedia.org/wiki/A_Penny_for_Your_Thoughts



miketranz
715 posts
msg #88073
Ignore miketranz
modified
2/10/2010 2:59:24 PM

Stargazer,you're trading "The little old man" method.The closest thing to the Holy Grail in the market.I know traders who have made a fortune trading one stock,same pattern,over & over again until the pattern no longer appeared.They actually traded 10% of the time,researched 90% of the time for stocks that moved in a consistent manner.Most of the trades they put on were 1-2 day holds.I trade the same method of consistent patterns,one stock,day after day.Although I do not have a 100% win rate per trade,anything over 80% you can make money with if you know how to use good money management skills.You're on the right track to successful trading.All the best,Mike.......

stargazer
12 posts
msg #88096
Ignore stargazer
modified
2/10/2010 10:14:19 PM

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bankwalker
You need to write a filter to pick out the stocks that currently fit your method, not try to force your method on those 3 stocks until the end of time.
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Yeah I know, when I was trading, my only worries were what if the stocks kept rising and became double digit stocks, would they still give me 2%? I thought I was in the zone, didn't think it would end though..

Corrected, 10:35 wallstreet time.
I forgot to mention, dip by 9:35a.m. central time, which would be 10:35 wall street time..

initially when I started daytrading, I would buy the stock as soon as the slow stochastic dipped below 20, but over time I would wait until it crossed above 50, because sometimes I would see that the stock kept going down when it hit 20..., but it was rare..

Anyone else notice that the high's and low's for the day are made in the morning?
Also if the DOW makes triple digit losses in the morning, it'll usually stay that way all day long..



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four
We are told that a coin flip is heads or tails (2 options).
Sometimes the third option occurs... edge.

http://en.wikipedia.org/wiki/A_Penny_for_Your_Thoughts
-------------------------------------------------------------------------------------

Yeah it's weird.
I'm thinking one more trade, and if it's a loss, I'm getting out of daytrading..for good...



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miketranz
Stargazer,you're trading "The little old man" method.The closest thing to the Holy Grail in the market.I know traders who have made a fortune trading one stock,same pattern,over & over again until the pattern no longer appeared.They actually traded 10% of the time,researched 90% of the time for stocks that moved in a consistent manner.Most of the trades they put on were 1-2 day holds.I trade the same method of consistent patterns,one stock,day after day.Although I do not have a 100% win rate per trade,anything over 80% you can make money with if you know how to use good money management skills.You're on the right track to successful trading.All the best,Mike......
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I searched for it and it takes me to Eman93's "Late to the Party" scan. Is this the scan?



miketranz
715 posts
msg #88099
Ignore miketranz
2/11/2010 12:24:04 AM

Stargazer,"The little old man" post can be found by typing in search,then go to forums.Once you read it,you'll understand.You're right about the highs & lows of the day being made in the first 30-60 minutes.This occurs most of the time,but not always.Also,most of the volatility is right of the open.To make money day trading,you need movement,the kind of movement that scares people into making the wrong moves,and catches them on the wrong side of the market.Fading the gap is a perfect example.It is one of the best set ups on here for day trading.If I understand you correctly,your method was basically waiting for a strong open pullback to a 20 indicator level,then jump on board for a reversal to the upside before 10:30,only if the stock trades up & above a 50 indicator level.That's a great method that worked consistently.How did you come across it?I'm surprised you didn't short it right off the open.I trade strictly off the open,first half hour,I'm done.That's where the action is.Any longer into the day,my odds go down for profitable trading.My reasoning is volatility drops off,consistency drops off,randomness prevails,plus I don't want to be stuck to a screen all day.I'm always looking for new stocks to trade off the open that move consistently.I'm really surprised most people avoid trading the open.That's probably because they got their heads handed to them using market orders on the open.........

SAFeTRADE
412 posts
msg #88101
Ignore SAFeTRADE
2/11/2010 1:04:54 AM

stargazer, how or why did you choose the 3 stocks you did. What criteria did SPF, MBI, BZH display?

thanks,

safetrade

BarTune1
403 posts
msg #88104
Ignore BarTune1
2/11/2010 4:10:12 AM

Mike,

If you want to short off the open, how do you figure your entry? I have had limited success fading the gap. And I would never recommend market orders. One of the problems I have is that my broker (TD) often takes4-5 mintues to approve the trade while they search to see if there is available stock to short.

chetron
2,817 posts
msg #88106
Ignore chetron
2/11/2010 6:43:01 AM

@ BarTune1, i use td and i noticed there are three conditions to an order, open, filled and pending. if i see pending, i cancel. my experience tells me that pending orders are equities that td won't let you short.


hth



cunparis
71 posts
msg #88114
Ignore cunparis
2/11/2010 10:04:54 AM

Bartune, if you want to short I suggest IB. It is very rare that it doens't let me short and the shorts are filled instanteaously. I was never aware of such problems shorting before reading your email. I guess IB has so many customers that they have no problem finding the shares.



StockFetcher Forums · General Discussion · Holy Grail to daytrading here<< 1 2 3 4 >>Post Follow-up

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