Pandabear | Profit.ly

Ten things I learnt today while studying

1. When a stock makes a big move, always watch it the next day for a secondary move as you can play the red to green setup e.g $CYCC on 8/16 and 8/17.

2. Timing day trades using time of day.

Morning = Price discovery. This is where you get the quick spikes in the morning then it comes back.

Midday = Price consolidation & price retracement. This is where stocks take a breather and consolidate or retrace. The small flags that you get in the morning you don't see midday so you can't really play it as there is no real trend

Afternoon = this is where stocks choose a side, start to trend so you can play it either way.

3. Don't buy a stock when you don't have clearly defined levels, or clearly defined ways to get out of stock. Always wait for patterns to develop before jumping into any stock.

4. Don't expect home runs on every trade. If you do you will not last long in this business. Always shoot for singles and doubles. Occasionally you'll get the home run but don't plan on it. Know the characteristics which will get you the home run and if it happens it happens.

5. When buying or shorting a stock, always look at the big picture or the longer-term chart as patterns are not always what they seem e.g buying a stock that looks like a bull flag intraday but on the daily long-term chart the stock is overextended or has moved up a lot in a short amount of time with no rest.

6.You can play the bounce on a stock that has gone parabolic to the downside and is at oversold levels after a parabolic move to the upside. To confirm the bounce you look for strength like a gap up or bull flag.

7. Never buy a winner without a good reason. Never double dip in a stock that you made money on the same day unless you have a logical reason. eg. you sell a stock for a nice profit, then it continues going up and you are "angry" you got out early so you buy again only to have it immediately drop. Don't make this emotional decision. Only buy stocks that have a valid setup with good a risk/reward ratio.

8. Don't be the first one in a move. Always piggy back the momentum when a stock has already spiked.

9. Be adaptable when markets change. If you have a strategy that no longer works due to changing market conditions, adapt and adjust your strategy and play it until it stops working.

10. Always trust your plan and accept that losses are a part of trading. When you do, you won't be afraid to trade. Like Tim says, trade scared i.e have a plan for risk, and you won't be scared to trade.