DAILY TRADING CHECKLIST – MUST FOLLOW EVERYDAY!

 

 

1.     Is the stock:

 

a)    Uptrending - LONG         b) Downtrending – SHORT

              c)     Choppy - AVOID

 

2.     What is the float? 

3.     What is the short-interest? 

4.     What is the catalyst? E.g PR, earnings, chart pattern

5.     What is the range from the previous day? If it’s a slow moving stock DON’T BUY

6.     What is the volume from the previous day? Is the volume increasing intraday? If it has little volume DON’T BUY

7.     Draw trendlines – support, resistance, flags, triangles

8.     Check the chart on all time frames – DAILY, 1 MIN, 5 MIN, 15 MINS etc

9.     What is the setup?

                        a)   Morning spiker  i) buy dip   ii) buy breakout 

b)   Delayed morning spike – drops on open then forms support, watch this. 

c)    Ascending triangle

d)   Triangle

e)    ABCD

f)     Double bottom

g)    Triple bottom

h)    Afternoon breakout

i)     Range trading

j)     Flag

 

10. Has the stock dropped more than 50% from it's highs, if it has DO NOT BUY unless support is holding

11.  What is your entry, risk – find the best level that tells you your thesis is wrong, draw the trend line and if it breaks below SELL. What’s your profit target and risk/reward. 

 

RULES

 

·      Don’t try to catch the bottom of a downtrending stock, especially panics and stocks that drop far from their pre-mkt lows.  This is a low-probability setup.

·      If a stock drops on the open but not far from the pre-mkt range, watch for support as it may be a delayed spike so get ready to buy the breakout.

 

·      Watch stocks that are moving all day as they can form setups during the day, watch for the higher lows, ascending triangles and get ready to buy the break.

·      Always watch both the CHART & LEVEL 2, not one or the other.

·      Always think of any mistakes you’ve made in the past and TRY NOT TO REPEAT IT.

·      Don’t buy a stock on the second day after it spikes then drops back down to where it broke out even if it ramps up a little towards the close. Any increase after-hours or pre-mkt the next morning could be a dead cat bounce. Give the stock time to consolidate which might take a few days. 

·      Don’t buy stocks with BAD long-term charts as bitter bagholders will sell into any spike. 

·      Focus on the best setups only . Be patient, prepared and disciplined.

·      Don’t regret when a trade goes back after you sell it, it means your thesis was wrong at the time, move on!

·      When you’re buying a stock after-hours or pre-mkt, make sure it the best setup because ECN fees have to be worth the rewards

·      Don’t regret missing a trade

·      Don’t force trades and don’t revenge trade

·      Have a plan and stick to it!

·      CUT LOSSES QUICKLY

 

 

 

YOUR SIGNAL SHOULD BE ON PRICE ACTION NOT GREED, FEAR OR EGO. DON’T HESITATE WHEN THE PRICE ACTION IS GIVING YOU A 100% SIGNAL TO GO!

 

Studying and preparation takes time, but it’s very front-end loaded, once you have the knowledge/mindset/discipline, you’ll never go back. - Tim Sykes