ENTRY & EXIT POINTS
So, to answer this question, we must first consider a few variables. First being, does one have the time to sit in front of the computer during market hours, or no? And two, is there less than $25k in the account that leaves them open to PDT (pattern day trading rules) that states on your 4th round trip (buy and sell of single security in a day) within 5 consecutive trading days you will basically be blocked for 90 days or until you fund $25k.
Let's assume first that you DON'T have $25k, but you want to build up to it without the risk of chasing P&D's for the big bucks. I will outline the TWO ways I would use to trade. The 3rd example down would be for a PDT exempt account.
First, like always, we focus on a few stocks that we know VERY VERY well. No experimenting on new picks here, because we never know what could happen if it goes down. We need stocks that have volatility, a strong support, and VOLUME!
We will use AFPW as an example here. Hypothetically, as it is right now, these are the support/resistance levels.
PASSIVE TRADING - NO ROUND TRIPS
So, let's say today is Wednesday, and the stock opened at .0052 but is down to .0041 towards the end of the day. THIS IS AN ENTRY POINT!! Buy what you can by sitting on the bid for a little bit. I think 250k shares is a nice amount personally and so far relatively easy enough to buy and sell on any given day. Now, if there's really not a whole lot going on, and it's just your average day to day trading type of scenario...then you immediately place a LIMIT SELL ORDER for the same share count, and TIME = GTC (GOOD TILL CANCELED). If you bought at .0041 then you simply add 20%, 25% 30% or whatever your profit threshold is. let's use 25% (=.0051) cause odds are by the time you wake up the following morning, it will get filled. That's $250 profit without using a "round trip" and basically while you were sleeping.
ACTIVE TRADING - NO ROUND TRIPS
Active trading to me, would be using the same exact scenario as above on the "BUY" side, but instead of just setting your sell, you decide to sit and watch Level 2 the following day so that you can either A: Maximize profits selling higher than the 25%, or B: Sell for 10% or 15% if it doesn't look like it's gonna make it up there. THIS TAKES DISCIPLINE as GREED can get involved. But, if properly executed would get you profit more often.
ACTIVE DAY TRADING - PATTERN DAY TRADING EXEMPT
Okay, so last but not least, we will use the example of someone who has $25K+ in their account, thus not having an issue with PDT rules. More often than not, this guy DOES sit in front of the computer all day glued to Level 2. This is really quite simple now, because you can buy and sell multiple times in a trading day watching the resistance and support levels and not really worry about anything other than trading fees. At this point, you will have already have your own system, entry and exit thresholds, etc. etc.
So, to answer this question, we must first consider a few variables. First being, does one have the time to sit in front of the computer during market hours, or no? And two, is there less than $25k in the account that leaves them open to PDT (pattern day trading rules) that states on your 4th round trip (buy and sell of single security in a day) within 5 consecutive trading days you will basically be blocked for 90 days or until you fund $25k.
Let's assume first that you DON'T have $25k, but you want to build up to it without the risk of chasing P&D's for the big bucks. I will outline the TWO ways I would use to trade. The 3rd example down would be for a PDT exempt account.
First, like always, we focus on a few stocks that we know VERY VERY well. No experimenting on new picks here, because we never know what could happen if it goes down. We need stocks that have volatility, a strong support, and VOLUME!
We will use AFPW as an example here. Hypothetically, as it is right now, these are the support/resistance levels.
PASSIVE TRADING - NO ROUND TRIPS
So, let's say today is Wednesday, and the stock opened at .0052 but is down to .0041 towards the end of the day. THIS IS AN ENTRY POINT!! Buy what you can by sitting on the bid for a little bit. I think 250k shares is a nice amount personally and so far relatively easy enough to buy and sell on any given day. Now, if there's really not a whole lot going on, and it's just your average day to day trading type of scenario...then you immediately place a LIMIT SELL ORDER for the same share count, and TIME = GTC (GOOD TILL CANCELED). If you bought at .0041 then you simply add 20%, 25% 30% or whatever your profit threshold is. let's use 25% (=.0051) cause odds are by the time you wake up the following morning, it will get filled. That's $250 profit without using a "round trip" and basically while you were sleeping.
ACTIVE TRADING - NO ROUND TRIPS
Active trading to me, would be using the same exact scenario as above on the "BUY" side, but instead of just setting your sell, you decide to sit and watch Level 2 the following day so that you can either A: Maximize profits selling higher than the 25%, or B: Sell for 10% or 15% if it doesn't look like it's gonna make it up there. THIS TAKES DISCIPLINE as GREED can get involved. But, if properly executed would get you profit more often.
ACTIVE DAY TRADING - PATTERN DAY TRADING EXEMPT
Okay, so last but not least, we will use the example of someone who has $25K+ in their account, thus not having an issue with PDT rules. More often than not, this guy DOES sit in front of the computer all day glued to Level 2. This is really quite simple now, because you can buy and sell multiple times in a trading day watching the resistance and support levels and not really worry about anything other than trading fees. At this point, you will have already have your own system, entry and exit thresholds, etc. etc.
EL JEFE'S TRADING FOR PROFITS
"I LAY IT OUT FOR YOU TO PLAY IT OUT"
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