Day Trader’s Weekend Aftermarket Lounge 12-14 Jul 2019

Originally posted by Thesardoz: ↑

Hello friends...
Few questions for the Day Trending crew....

1- who does keep a daily journal of their trading performance and how it is structured.
2- who does Trade Full time as only source of income and for how long
3- what do you to improve your skills on a daily basis

Then this is for @highlandlad I would appreciated if you could share...
I have noticed from your mentions on your post that you primly trade bounce of daily falling stocks cause from negative catalyst or technical retrace.
Why do you chose to focus in this setup rather then other and what was the reason.

Thank you.

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Hi @Thesardoz.

Why do I focus on bounce trading? Fair question.

I didn't start out this way. Like many I began by reading every trading book I could find: Guppy, Elder, Tharp, Bedford, Farley - I have a shelful of them. I faithfully memorised the technical set-ups for momentum trading, breakout trading, gap theory, swing trading - all sorts of approaches - and tried to put them into practice. Well, I lost more money than I made. That's not to say it's impossible to make money using those approaches, just that they didn't work for me in the market that existed when I was starting out. In frustration I tried buying uptrending stocks on retrace and discovered I could make money that way. For whatever psychological reason, that approach resonated with me and I was able to execute much better. In particular I found it easier to minimise losses by only buying stocks that have already come back a long way intraday.

I eventually got better at some of the other techniques and had a mix going until the GFC came along. Then there was nothing to trade but falling stocks. No breakouts, no upward momentum, no new highs. Tried shorting - harder than it appears, especially when the swings during the GFC were so severe. Still made money bounce trading and realised that it works to some extent in every market because stocks retrace even in bull markets.

If you're successful enough in bull markets as a full-time trader you can afford to sit out bear markets. I'm not that good, so I need something that generates an income in every market.

Trading is all psychology. Each of us has to find an approach that is firstly, profitable; and secondly, allows you to see the opportunity and pull the trigger without hesitation. We all bring different skills and mindsets to the market. The key is to find your niche and hone your skills. Bounce trading is it for me. It won't work for everyone. It's not as lucrative as other approaches in a bull market, but it works in all markets.

Important point: it works best in retraces in uptrending stocks. With downtrending stocks, well, the trend is against you. (Duh.) Trading "bad news" dumps is also possible but much more hazardous and the losses when it goes wrong can be crippling. Plenty shares don't bounce.