Rookie Swing Trader Journal September 2021

How's ETH today?

https://finance.yahoo.com/quote/ETH-USD?p=ETH-USD

  • ETH-USD 
  • when to buy? $3155
  • When to sell? 

How's my purchasing power today?


Is it a good day to buy stocks?

Look at the S&P 500 hourly chart... 
  • Is the 10 SMA above the 30 EMA? No
  • Is Williams %R (3) less than -80 (oversold)? Yes
  • Is the ADX momentum indicator above 25? Yes
If everything is Yes, buy! ...no!

⚠️ Once you bought a stock, trade the chart of the stock itself and forget about the market... 


What stocks to buy?  

Which stock in hand can I sell?
  • 12 stuck stocks at FSMone. See Yahoo Finance.
  • FB. Bought $344 (23 Sep 2021). Target $370 or $400. 
  • AAL (mm kdj rsi). Bought $21.30. Stop at $19.60. Target $24. 
  • GNUS (yf bbl to). Bought (FSMone) $1.65. Target $1.82. 
  • TNXP (no indicators, gap down). Bought $0.75. Target $0.83. 
  • SOLD
  • AXP. Bought $161 (25 Aug 2021). Sold US$175 (24 Sep 2021).
How to track medical biotech stocks, meme stocks, and penny stocks... As well as any popping stock? What's the strategy?


Until tomorrow. 

~ The Rookie Trader 


PS: I would like to thank the following...

Note to self:
  • Buy on dip from late April to early May 2021.
  • Sell in May and go away. Reinvest in November.
  • August is a particularly strong month, September is an especially bad month for stocks.
  • Premarket moves are irrelevant and distracting. Stop tracking them. 
  • Sell immediately if price spikes on news.
  • Remove emotion from the equation.
  • I need a stop strategy.
  • If I don't sell, I will have no capital to buy. 
  • Locking the profits at hand is better than risking the losing direction.
  • How to recover from stock market losses? How to recover my money lost? How to win my trading losses back? The best way to recover after losing money in the stock market is to invest again.


Trading Plan

"A trading plan is a roadmap for how to trade, and no trades should be placed without a well-researched plan. The plan is written down and followed. ... A basic trading plan includes entry and exit rules, as well as risk management and position sizing rules." - https://www.investopedia.com/terms/t/trading-plan.asp

  • 4 Stages - There are 4 stock market stages. Bottom, uptrend, top, and downtrend
  • 5 Waves - There are 5 uptrend Elliott waves and 3 correction waves. Buy on wave 2. Hold on Wave 3. Sell on wave 4. 
  • Trends - Trade trending stocks. Characterized by higher highs and higher lows. 
  • Identify a new trend using Trader Vic's 3-step method. 1. A trendline is broken. 2. There is a retest and failure. 3. Price falls below the prior low. Use the 10 (SMA) and 30 (EMA) period moving average crossover scan for step 2. Step 3 confirms trend change. Does not work in a sideways trading range. 
  • Bulls and Bear - The 200 SMA is used to separate bull territory from the bear territory. 
  • Support and Resistance - Stocks do not find support or run into resistance on moving averages. Stocks reverse at the price level. 
  • The more times a stock hits a support or resistance area the weaker it becomes (and the possibility of a breakout increases).
  • Buy at support. Sell at resistance. 
  • Volume? Not important?
  • THERE IS NOTHING ON A CHART THAT MATTERS MORE THAN PRICE. EVERYTHING ELSE IS SECONDARY.
  • Candlesticks - Stocks tend to move in the direction of wide-range candles. Narrow range candles imply low volatility. Enter a stock in periods of low volatility and exit a stock in periods of high volatility. 
  • Candlestick reversal patterns... https://www.swing-trade-stocks.com/candlestick-patterns.html
  • Reading stock charts.
    • What stage is this stock in?
    • Is this stock in an uptrend or a downtrend?
    • Is the stock at the beginning, middle, or end of the trend?
    • How strong is the trend?
    • Where are the trend lines?
    • What wave is this stock in?
    • What do the moving averages tell me?
    • Was there a breakout recently?
    • Is the chart "smooth" or "sloppy"?
    • Are there any chart patterns?
    • Are there wide-range candles in the direction of the trend?
    • Are there any gaps in the direction of the trend?
    • Are professionals selling strengths or buying weaknesses?
    • Where are the support and resistance areas?
    • Is this stock at a Fibonacci level?
    • What does volume tell me?

  • What technical indicators are best? Stop the madness! The only thing you need is an understanding of price action. The main thing that you are trying to figure out on a chart is the psychology of other traders. Look for support and resistance, trend lines, and emotional extremes.


  • HOW TO DECIDE WHEN TO BUY A STOCK
    • Buying weakness is the art of buying pullbacks. Stocks that are in uptrends will pull back offering a low-risk buying opportunity... Where do you buy a pullback? You buy them in the Traders Action Zone (TAZ)... the trader's action zone is the area in between the 10 SMA and 30 EMA...When a stock pulls back into this zone, look to the left to identify support and resistance, trend lines, candlestick patterns, etc. You are looking for multiple signals all pointing in the same direction... After a change in trend when the 10 SMA crosses the 30 EMA, look for an entry on the first pullback when the stock gets into the TAZ... Do not buy breakouts. Wait for pullbacks.
    • Find stocks that have pulled back and made a 3-candle swing point low (meaning it will likely reverse).
    • Find stocks that have consecutive down days before the swing point low developing.
    • Find the T-30 tail with increased volume.

  • When to set stop loss? What's the best stop loss strategy?

  • Don't use an automatic stop loss. They work against you in the long run. Use mental stops (you click the sell button manually) based on the closing price, not the intraday high or low... https://www.swing-trade-stocks.com/stop-loss-orders.html

  • We know that resistance can become support so it makes sense that your initial stop should go under a support area and a swing point low. https://www.swing-trade-stocks.com/exit-strategy.html

  • Easy way to set initial stop - Put stop-loss order under the 30 period EMA. A strong stock should not fall very far below that moving average. If it does then we want to be out of the stock anyway. https://www.swing-trade-stocks.com/exit-strategy.html

  • Don't tie up your trading capital on a stock that is just trading sideways. Treat a stock as an employee. If it doesn't do what you want it to do - fire it! https://www.swing-trade-stocks.com/exit-strategy.html

  • WHEN TO TAKE PROFITS?

  • Place trailing stop-loss orders after the market has closed. My trailing stop loss order needs to go under the current day's low or the previous day's low - whichever is lower. https://www.swing-trade-stocks.com/trailing-stop-loss-order.html
















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