So, for the past couple of months I've been working on my pure day trading systems as it's been a real weakness in my trading skills and I'd envisaged that Jan/Feb would be quieter months therefore a good time to get stuck in to it. Obviously entries and exits are the things that trip up most day trades and determines what is going to become income or cost trades.
At the start I found myself getting shaken out of so many trades as my indicators were just too tight to allow a stock to move so brokerages were way up and profits were way down, it wasn't working. So that this post doesn't become a book, I'll cut to the chase on what I'm finding working really well and profitable. Love to get other views on this.
I'm now setting up my charts with an 8 and a 20 EMA's, I've muck around with many over the past month and this combination is the one that I'm most comfortable with and is getting the best results.
So, entry on a one minute chart when SP is above the 8 and of course 8 above the twenty, get through the next few nervous candles and switch to a five minute chart.
Now here's the five minute chart and you can see that the EMA's and PA never gave a reason to sell until my exit. The 8 and 20 is smooth and easy to read allowing for more trades to be done simultaneously and have four going taking up one screen. Obviously the further above the 8 gets from the 20 the more comfortable the trade is.
It could be argued that I'm not getting the best exit and I accept that as when a see a red candle I maybe should revert back to a 2 min chart, still a work in progress.
Anyway, just adding what's been working for me, it's taken a squillion trades over the last couple of months and Commsec keep sending me hampers and thank you cards but it's been well worthwhile.
Pure day trading isn't really what I want to do but as my short termers have been on holidays this was a great opportunity. Happy to hear other views.
