Lately I have been focusing on the morning spikers. This seems to be my strength. Buying into the spike and catching the "meat of the move" Tickers with couple million trading volume pre market seems to end up being choppy as there are tons of buyers and sellers moving the price in chunks. This means the risk and reward spread will have to be bigger to ride the volatility spike. I also noticed since when volume is high, the price moves so quickly sometimes it is hard to capture the desired entry price and exit price if you don't have your trade order ready to submit.
Going forward, I am going to have a very defined plan before I enter a trade. I will know exactly my position, my entry price, my risk exit price, as well as my profit goal. Going to practice this on a papertrade a few times to make sure I get a better flow of this strategy.
Example of defined plan:
TEUM - $2.81
$3.74 R4 Feb 17
Risk(1)/Reward(5) 0.17 / 0.83
$TEUM - Entry $3.10, aiming for $0.40 -$0.70/share, Risk Exit $2.70. Position 650
Example of defined plan with explanation:
NVFY - $2.85 (current price, usually pre-market)
$2.95 R1 (First Resistance = R1, Second Resistance R2, etc)
N/A (First Support = S1, Second Support S2, etc)
==Position 650== (Number of Shares)
==Entry $2.87== (Have this price on my eTrade order page so I just gotta click Submit to place order quickly)
==EXIT $2.60== (Have this price on my eTrade order page so I can get out quickly)
==$0.30 - $0.50/share== (Define the profit goal so greed doesn't get into my head)
Good Volume (Does it have good volume like it will trade at least 1 mil for the day?)
Risk $0.27/Reward $0.50 (Define the Risk $ amount, and the Reward $ amount. Is it worth it?)
$NVFY - Entry $2.95, aiming for $0.40 -$0.70/share, Risk Exit $2.60. Position 650 (Then summarize this in 1 sentence.)
*****If the ticker doesn't go as my defined plan, then don't trade at all. Make sure you are comfortable or else, do not trade on emotions or gut feelings.*****
If plan does not work, form Plan B such as a dip buy into rebound plan asap to catch the 2nd spike.
Both tickers didn't follow my plan when market opened on 12/27/17, so I didn't buy into any of them. I formed a plan to dip buy into TEUM, but then I realized I gotta study more and have a better understanding of how to dip buy before I jump the gun.
Task: Learn how to dip buy and form a dip buy strategy for next blog post