Egg 7 - Makin the Move
The Best Time to Trade, I find, is the first two hours after the stock market opens, and the last hour before it closes. On most days, stocks just do not move much in a normal market, except maybe around lunchtime.
As a Day Trader Hawker with your eyes glued to the computer screen, I would encourage you to follow a trade with a one minute time period for a few days. Sorry, I know this will give you a headache, but a fast price movement is a good way to learn that one minute trading is extremely difficult, if not impossible to do - in a Profitable Manner. At the speed of one minute, one chicken foot slip and you just bought 20,000 shares of a stock you meant to only buy 2,000 shares of. This will wake you up!
This Hawk mainly uses a Daily timeframe as the Main focus, and the 15 minute timeframe for a Trend. The 5 minute timeframe I use as a trigger alert for making a buy or a sell. This allows for ample time before placing a stock order to take a chicken step back, watch the 3 minute timeframe (hint) and take a breather before committing myself to the purchase of the egg. The 3 minute timeframe allows for a 2 minute reprieve before you pull the trigger and place the order. Just think of it as the farmer standing over you with the hatchet hiding behind his back. There is still time to chicken out.
Frequently, this technique has saved me from having a bad trade with a particular stock that had a good possibility, but a market that went opposite of the candlestick signals and what I expected.
Expectations are Not Emotions. After studying the signals and patterns, there is some expectation of what the end result Might Be, as Candlesticks have proven that the patterns do repeat themselves.
When I make scan choices the previous evening (or last trading end of day) for Candlesticks signals and patterns, I use the Daily timeframe. Keep studying and practicing and eventually you will find what works out best for You!
I wouldn’t classify myself as a day, night, week, swing or any other type of trader. As Rick Saddler of HitandRunCandleSticks.com will tell you, “Hawk is a Profit Trader”, a simple statement that carries a lot of weight. Thinking of yourself as a “Profit Trader” also helps to keep you in a Positive Mood.
In a humorous note, I have answered three phone solicitation calls in the past few years where the first question asked of me was,” Are you a Day Trader or a Swing Trader?’ When I answered with the reply, “I am a Profit Trader!” In each instance the person asking the question promptly hung up the phone. I am still to this day confused as a chicken as to why they hung up? After all, isn't that what it's all about?
Onward chicken soldiers, now that you bought your stock when is it time to sell?
Uppermost in your mind should be your goals. Some Hawkers think on dollars and others think of percentages. My thought is, “you can only deposit or withdraw dollars and not percentages”.
Another way to think of it is, “I want to sell to try and meet my immediate goal” Whether the most immediate goal is for the day, week, or month. If the stock market is moving too slowly, especially in the summer months, then immediate larger profits may be harder to obtain. I then might start taking smaller profits, even $50 net profit as ten trades of $50 = $500. Remember, the goal is not to make the biggest gain on one trade, the goal is to Make Profits!
When I think of percentages the end of year is the first thing that pops into my little chicken brain. Each day, 365 days a year, I ask myself, “Have I reached my goal?” This thought keeps me focused on my goal, which provides incentive for me to keep at it.
How can you minimize losses?
By taking profits whenever you can! Fine-tuning of Your Trading Plan is a continuous task. Many trades where you were happy with selling for a $500 profit, “would have” turned into an $800 profit if you only held the stock an extra 20 minutes! But who can say you did wrong? How can you go wrong, if you are $500 richer?
Put Profits In Your Pocket and prepare for the next stock trade. The market changes all of the time just as economies and Hawkers change their minds. The nice thing about Candlesticks is that whether changes in the market are up or down, Candlestick patterns will keep reappearing both in the short and long terms. Also, if the stock market suddenly and without warning did a Humpty Dumpty move, you can usually still find eggs that flew the coop (so to speak) and are rising like a soufflé.