Here's how my morning went, just to give an example. 2 winning trades, 4 losing trades, but I'm up nicely. I'll walk thru it as tho it's real time.
when we were trading messages this morning, the stock I was watching was ROSG. It hit new hi in premarket, so I checked news and it had some that seemed like should make the stock run. But I watched the level 2 action and when I found it, it was at 1.39 and more sells were coming in on the ask. Price kept lowering and lowering on the ask. That shouldn't be happening. I want to see those buy orders hitting the ask and the ask keeps moving up and up. So I didn't buy. But the news was good, so it was on watch for me at the open. premarket can be very erratic. I watched the open and it went down for a few minutes. If it's going to run it had to break the high of the day, which was 1.33. When it hit 1.34 I placed a buy limit order for 10k shares at 1.34 and got them all. My mental stop was 1.32 (Ironically very close to hypothetical prices I talked about earlier this morning).
So now I watch price action to get out. Unlike value microcaps, daytrading is all tickers and price action for me. I know nothing about the companies. I never try to force a stock to make a certain percentage for me or whatever. Stocks don't give a crap about me. They don't know I exist. I just watch the action. The trade was never in the red. ROSG moves up quickly to near 1.40, almost all green buys. Above 1.40, the upward movement slows down and more shares come in on the ask. It's still moving up, but it's up and down. I decide to take 1/2 my shares off and I get 1.41 for them +$340 (all figures are after commissions. (I like to scale out because if you think about it, I made 7 cents, so now the price can go 7 cents below my initial buy on the other half, and I still break even. that's the way I like to think of it). After a brief move down ROSG moves back up but starts showing weakness, so I take off the other half at $1.47, resulting in +$640.
I know ROSG is a past runner so I still keep it on watch. I'm constantly flipping between daily charts, and 1-,2-,3-,4-,5-minute charts. On pullbacks I tend to use a moving average to determine a buy point. I used 3-minute chart for ROSG. I try to see which one fits which stock on a given day. I don't know if this TA is all real or hoakum and self-delusion, but it's worked for me. I notice that ROSG volume from just the morning is hugely above average. Seems like those stocks can tend to move throughout the day. So I'll keep it on watch. In real-time, I set my buy points right at the moving average, but on pullbacks I tend to scale in. Smaller position this time cuz the inital burst is probably out of the stock. Buy orders for 2k at 1.39, 2k at 1.38, and 2k at 1.37, sell stop for all at 1.34. All the orders get executed so I've got 6k shares. The price starts to move up and as the moving average moves up, I move up my stop to 1.39, the stock flashes down and my sell stop gets excuted at 1.37 for all. Darn, but them's the breaks (it's referred to as slippage). So three losing trades that total about -$75 after commissions.
Then I moved on to SGY. I missed the initial breakout at 7.50, but it pulled back to under 7.50 and seemed weak. Then it picked up steam and I bought 2k at 7.49 with a 7.44 stop. It moved up for a few minutes but then turned right back around and I sold at 7.49 for just commission losses (another rule for me is I never let a winner turn into a loser). As I write, the stock is trading at 8.18 and I sold at almost the exact bottom. But that's okay. It really is okay.
Still keeping an eye on ROSG and SGY for the rest of the day, but it will have to be a really low-risk entry for me to try again. Keeping my eyes peeled for any others, but I'm probably done for the day unless it's a real eye-popper.
I'm up around $900 on the day with 2 winners and 4 losers. It's a decent day and you have to have good days to make up for the losing days.
I try to never let a green day turn into a red day.
