# Intraday trading



## fallenangel22 (27 November 2008)

Unfortunately you cannot learn to day trade at your local technical college.  I have been looking at the market and trading for 6 months my whole aim was that I would be able to earn as much as I would if I got a part time job in a shop.  ie: 500 dollars a week.  I didn't think that would be a huge ask from the market.  Intraday trading 10,000 dollar trades on blue chips that move anything from 0.50 to 1.00 up.  There are some stocks that have this type of personality. depending on news overnight commodity prices etc. am I being unreasonable thinking that using the same 30,000 on 3 trades a day getting on and off tight stops etc etc.  Really can anyone tell me after you have read all the candles and listened to the morning report and trailed the internet for any lead on todays market by what has happened overnight in london and usa and whos is bailing out who.  intraday trading  .. it really is just a punt isn't it?


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## MRC & Co (27 November 2008)

LOL.

Just a punt mate.  

Lot of reading for you to do obviously.  Don't even know where to begin.....


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## shaunQ (27 November 2008)

I am definitely no expert, but have tried intraday, you need to make sure you've got good tools such as live intraday charts and live market orders. I think also that the overall trend can have major influence on your success, as a good report may come out for XYZ but the overall sentiment, or trend is down, where as 2 years ago, in a bull market, you could be more confident that it would go up. Also stopping your losses is important or you will definitely fail.

Also, you'll find 99% of most things you will read or learn about prior to the days trade will most likely already be factored in. Hence the saying Buy on the Rumour, Sell on the news. The assumption being that the "smart money" already knows about the news.


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## fallenangel22 (27 November 2008)

yes I do have live intraday charts - ok live market orders i have commsec professional unless there is a step up where you don't have to put your trading password into the order pad and waste time that way...  Yes I have read a million books on day trading  I just need to talk to an expert ..possibly I need a coach I have heard there is such a thing or maybe that would waste money I need to trade with. look blind freddy could have made money yesterday  rio, csl, woodside what a terrific day trouble is all days are terrific in hindsight.


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## professor_frink (27 November 2008)

fallenangel22 said:


> intraday trading  .. it really is just a punt isn't it?




When you think that looking on the internet for 'leads' in the morning is a viable way to daytrade then it pretty well is.


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## fallenangel22 (27 November 2008)

proffesor,  yes this is what I mean thank you.   Ok this is what I do. I check out the dow,  the news, what commodities are doing ...internet search on any companies I am thinking of trading that day.  I would have about 6 companies that I sit and watch everyday all day. I never buy on open way too much of a newbie for that ( although I know I am missing alot of the action).  I wait until the chart has settled into what direction it will have for the day .. check the short term resistance of the stock on charts  - sometimes the stock has gapped up to resistance and won't go any further that day or sometimes it will dip after open and climb to meet resistance that could be a good trade. or it might be totally oversold on open and looks like it could have legs. There might be a gap to fill up or down that needs consideration.  After each trading day at night I check the candle charts of all my stocks looking for any signs eg an inverted hammer or doji cross on  oversold stock with a rsi that is in the oversold territory. or stock trading outside the bollinger band etc..  what i really want to know is am I heading in the right direction is this what you do as a day trader, how can I take it to the next level where can I learn?


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## James Austin (27 November 2008)

when i first started intraday share trading i had quite good success trading surprise news releases. if you can work out what is and isnt news worthy, and get in close to the news release, a couple of hours trading can be very lucrative (500% or more in a day).

now i'm trying my hand at intraday index trading, and yes, my approach was akin to gambling for the first 6 or 7 mths. 

but *slowly, slowly* my approach (both system and psych) is turning around 180 degrees, so that increasingly, each and every trade is intelligent, reasoned and calculated.

but, yes i think for all beginners intraday trading is a bit of a punt, that's because only lots and lots of experience makes it systematic, intelligent, . . . without that experience its natural that it feels like a bit of a guess, a bit of a punt.

james


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## MichaelD (27 November 2008)

fallenangel22 said:


> what i really want to know is am I heading in the right direction is this what you do as a day trader, how can I take it to the next level where can I learn?




1. What is your expectancy?
2. What is your win/loss ratio?
3. What is your win %?
4. What is your edge?

I think MRC's response is most likely the correct one, but you never know - surprise us.


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## jersey10 (27 November 2008)

fallenangel22 said:


> proffesor,  yes this is what I mean thank you.   Ok this is what I do. I check out the dow,  the news, what commodities are doing ...internet search on any companies I am thinking of trading that day.  I would have about 6 companies that I sit and watch everyday all day. I never buy on open way too much of a newbie for that ( although I know I am missing alot of the action).  I wait until the chart has settled into what direction it will have for the day .. check the short term resistance of the stock on charts  - sometimes the stock has gapped up to resistance and won't go any further that day or sometimes it will dip after open and climb to meet resistance that could be a good trade. or it might be totally oversold on open and looks like it could have legs. There might be a gap to fill up or down that needs consideration.  After each trading day at night I check the candle charts of all my stocks looking for any signs eg an inverted hammer or doji cross on  oversold stock with a rsi that is in the oversold territory. or stock trading outside the bollinger band etc..  what i really want to know is am I heading in the right direction is this what you do as a day trader, how can I take it to the next level where can I learn?




It is an interesting question: how can novice traders can improve their knowledge and skill in trading.  There doesn't seem to be too many options other than reading books and forums and opening a paper trading account and 'doing the hard yards'.

I believe if you can get some sort of mentor you will save a load of time and get consistently profitable a lot sooner.  You could apply for a place like MRC is at and learn from a company like that (proprietary trading firm) through their training course.

I decided to join The Chartist a few months ago and have made 5% using .5% risk trading AUS and (mostly) US stocks.

I believe there is a magnificent business opportunity for someone to offer a intraday trading service similar to the Chartist (which is based on EOD trading).


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## fallenangel22 (27 November 2008)

1. What is your expectancy?
10%

2. What is your win/loss ratio?
Ok my win loss 3:1

3. What is your win %?
this week 2 out of 5  (I know pretty dismal)

4. What is your edge?
if I had an edge I wouldn't be here

 I don't know If I have passed your test michael d  probably not but if I did I probably woulddn't be posting in the newbies  forum


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## professor_frink (27 November 2008)

fallenangel22 said:


> proffesor,  yes this is what I mean thank you.   Ok this is what I do. I check out the dow,  the news, what commodities are doing ...internet search on any companies I am thinking of trading that day.  I would have about 6 companies that I sit and watch everyday all day. I never buy on open way too much of a newbie for that ( although I know I am missing alot of the action).  I wait until the chart has settled into what direction it will have for the day .. check the short term resistance of the stock on charts  - sometimes the stock has gapped up to resistance and won't go any further that day or sometimes it will dip after open and climb to meet resistance that could be a good trade. or it might be totally oversold on open and looks like it could have legs. There might be a gap to fill up or down that needs consideration.  After each trading day at night I check the candle charts of all my stocks looking for any signs eg an inverted hammer or doji cross on  oversold stock with a rsi that is in the oversold territory. or stock trading outside the bollinger band etc..  what i really want to know is am I heading in the right direction is this what you do as a day trader, how can I take it to the next level where can I learn?




If you think that certain candle formations might signal a reversal the next day then code it up in some software and test it. If you don't have some software to do it for you then do it manually. Find a stock that you currently trade and find every doji, or hammer or whatever you are looking for, and record what happens the following day. When it works, what are the conditions surrounding it? What is the trend like leading up to the signal, what is the broader market, sector doing at the time? Can you improve it at all?

There's no point in saying that you are looking for hammers(or whatever) if you have absolutely no idea what actually happens after you see one.


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## mazzatelli1000 (27 November 2008)

professor_frink said:


> If you think that certain candle formations might signal a reversal the next day then code it up in some software and test it. If you don't have some software to do it for you then do it manually. Find a stock that you currently trade and find every doji, or hammer or whatever you are looking for, and record what happens the following day. When it works, what are the conditions surrounding it? What is the trend like leading up to the signal, what is the broader market, sector doing at the time? Can you improve it at all?
> 
> There's no point in saying that you are looking for hammers(or whatever) if you have absolutely no idea what actually happens after you see one.




I like what the Professor has to say
Understand the underlying you trade --- each has its characteristic after you have been watching it for a while


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## fallenangel22 (27 November 2008)

You know professor that is the thing.   technical analysis is probably the one thing that has been consistent.  I am sure you are a smart person with a name like professor how could you not be.  And I am sure you know what I am talking about when I quote an evening doji star and yes i have tracked back on my stocks to confirm what that might mean to that particular stock... This is the thing even though all the fundamentals and environmental indications point to a different senario  if I see that star that stock is going down.  I do not profess to know alot about candle reverse patterns or alot about charting I am still learning 6 months in the market is like a new born baby.  Can anyone give me a clue I am sure there is a multitude of things I am not doing any pointers


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## CanOz (27 November 2008)

fallenangel22 said:


> proffesor,  yes this is what I mean thank you.   Ok this is what I do. I check out the dow,  the news, what commodities are doing ...internet search on any companies I am thinking of trading that day.  I would have about 6 companies that I sit and watch everyday all day. I never buy on open way too much of a newbie for that ( although I know I am missing alot of the action).  I wait until the chart has settled into what direction it will have for the day .. check the short term resistance of the stock on charts  - sometimes the stock has gapped up to resistance and won't go any further that day or sometimes it will dip after open and climb to meet resistance that could be a good trade. or it might be totally oversold on open and looks like it could have legs. There might be a gap to fill up or down that needs consideration.  After each trading day at night I check the candle charts of all my stocks looking for any signs eg an inverted hammer or doji cross on  oversold stock with a rsi that is in the oversold territory. or stock trading outside the bollinger band etc..  what i really want to know is am I heading in the right direction is this what you do as a day trader, how can I take it to the next level where can I learn?




Perhaps you could trade with the trend, and just look for pullbacks to sell.

Use VSA to idenify weak stocks and then short them intraday, as Tech/A does.

Cheers,

CanOz


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## MRC & Co (27 November 2008)

jersey10 said:


> There doesn't seem to be too many options other than reading books and forums and opening a paper trading account and 'doing the hard yards'.
> 
> I believe there is a magnificent business opportunity for someone to offer a intraday trading service similar to the Chartist (which is based on EOD trading).




Yes, read some books on T/A and money management first.  Pretty much all the same.

Then the hard yards begin.  Creating your own style and finding your own instrument to make yours.

Jersey, there are a few sites where you can pay to enter live rooms to learn intraday and trade their live calls (a lot of them VERY expensive, but I have heard they are pretty good).  Ones like Trade The Markets (John) and Puretick (Alex).  

Ultimately, if you are going to trade intraday, overcoming your emotions and discipline will be a HUGE test.  As you will be sitting there all day watching and so all types of emotions will come into play.  Not to mention, as you are constantly trading in shorter timeframes, you will get caught in the heat of the moment a lot more.  You will also probably want to learn to read the tape.  The most useful and powerful tool IMO (you will need level 2 data for the order book for this).  Though, just about anything can work if you can make it your own and find your own edge using it.


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## peter2 (27 November 2008)

I am curious Fallenangel22 to see how you could have made money trading RIO, CSL, and WPL yesterday as you stated. 
What would you have done to profit in these stocks? 

State the context of all trades 
eg. RIO - BHP withdraws bid, RIO shares tank big time overnight
CSL - ?
WPL - Oil up $2 bbl.

What would you have done pre open, open and during the day?

Please include your risk management. 

Your reply will tell us how much you know about trading.


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## kotim (27 November 2008)

Mate learn to trade futures, the brokerage is so cheap compared to shares that if you want to trade intraday, getting in and out a number of times per seesssion then imagine the costs.  IB will trade 5 aus per side on spi, yet your controlling a large sum of money.  It would cost you 50-100 dollars easy to control the same amount of stock, imagine how big an edge you need in shares compared to futures, just to pay for the commission.

In reality the shortr the time frame you trade with shares the harder it is, mainly due to commissions, let alone other things.


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## MichaelD (27 November 2008)

fallenangel22 said:


> 2. What is your win/loss ratio?
> Ok my win loss 3:1
> 
> 3. What is your win %?
> this week 2 out of 5  (I know pretty dismal)




Well whaddya know - sounds to me like you're basically doing just fine if these numbers are accurate (and 90% of my question was aimed at working out whether you actually knew what these numbers were all about).

Why do you think you're not doing well?


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## Bobby (28 November 2008)

I'll give a hint with intraday.

Watch the speed of trades ~ there volume & direction , try to ignore the depth quoted     get that feel first !


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## fallenangel22 (28 November 2008)

peter2 said:


> I am curious Fallenangel22 to see how you could have made money trading RIO, CSL, and WPL yesterday as you stated.
> What would you have done to profit in these stocks?
> 
> State the context of all trades
> ...





Ok peter here goes... 

Rio  Well we all knew something would interesting would be happening there ... as you know rio gapped way down... I waited to see if there would be any short covering rally after the initial sell off in the morning..watching, watching...  when it started to run I got in at around 43.50 (tight stops) and out at 44.40 as I started to get spooked to fast too soon.  ( yes that was a bit of a risky punt but a bit of a rush)

csl was trading way outside of the bollinger on friday with a very healthy shadow on the candlestick - fundamentaly csl is a good defense stock and has held up well in the past although it had some good gains over following days it gapped down on Wed at 30.80 it was a green night on the dow and I thought it would have legs still oversold by my indicators a slow steady rise made it a safe trade for me.


wpl - oil is going up and woodside has gapped down on open. plus trades down to 31.60 looked for the rebound and jumped on.

feedback is appreciated.


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## MichaelD (28 November 2008)

fallenangel22 said:


> feedback is appreciated.




1. You're letting winners run and cutting losers short.
2. Based on your numbers, you have a positive expectancy.
3. You haven't blown up in these market conditions.

Doesn't sound to me like there's any problem, apart from you perhaps thinking that everyone else here is doing better than you (with very few exceptions, they're not - most have been slaughtered in the last 12 months).


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## peter2 (28 November 2008)

Thanks for your reply. Like MichaelD I am surprised to see that you do know something about trading. The trading scenarios were possible although you didn't specify how much of a risk you were prepared to take if price didn't continue in the right direction for you. You will have to organise this aspect of your trading or it is gambling. 

The challenge for you would seem to be if you are capable of trading in this manner day after day. Can you step up after one or more losing days? Your approach is very discretionary and is very susceptable to emotional saboutage. I think this is what is happening to you now. You are doubting your ability to do this all the time so you are using the punting excuse. You must believe that it is a business. You must mange your risk all the time. You must persevere day after day. You must keep a constant eye on your trading stats to monitor your performance. 

Discretionary traders do it tough and very few survive. I would urge you to morph your approach into a more systematic approach. Then you will be able to see what works and when. Newcomers always trade in a discretionary manner until they have a few losses and then they are lost because they don't know what they were doing wrong and they can't find out because they have no system.

You will have to work slowly towards your trading goals. Self confidence takes time to build so does your trading capital. It is much better if both grow together.


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## professor_frink (28 November 2008)

MichaelD said:


> 1. You're letting winners run and cutting losers short.
> 2. Based on your numbers, you have a positive expectancy.
> 3. You haven't blown up in these market conditions.
> 
> Doesn't sound to me like there's any problem, apart from you perhaps thinking that everyone else here is doing better than you (with very few exceptions, they're not - most have been slaughtered in the last 12 months).




yeah I agree with Michael.

It sounds like you aren't doing as badly as you think fallenangel. I'm curious as to why you are still referring to it as  a punt. Is it due to the win rate? Or aren't you making enough money yet? Or is it because you just don't think you 'know' what you are doing? If that last one is the case, then you might get something out of my comments below.





fallenangel22 said:


> I am sure you are a smart person with a name like professor how could you not be.




Dunno about that one




> technical analysis is probably the one thing that has been consistent




yep. That's why I like it. Whilst a lot of people are running around in a panic, the market remains essentially the same from a TA perspective and quite tradeable in this kind of environment.



> I do not profess to know alot about candle reverse patterns or alot about charting I am still learning 6 months in the market is like a new born baby.




that is why I mentioned doing a lot of testing to get yourself to the point where you do know a lot about reversal patterns if that's what you want to trade. And by know, I don't mean knowing the theory about identifying what a doji or hammer is, I'm talking about a practical knowledge that helps you trade - whenever a doji has shown up on WPL in a downtrend in the past, there is a 41% chance that the close will be higher than the open tomorrow and the open will be in the bottom 10% of tomorrow's range. That kind of stuff.



> Can anyone give me a clue I am sure there is a multitude of things I am not doing any pointers




If you want to make it as a daytrader, you need to become a true student of the market, observe and record everything that you see happening. This goes for general market movements as well as recording the trades you make. 

If you want to trade WPL for example, are you also watching the other oilers, and the oil price throughout the day? How does WPL react if the oil price starts ticking up during the day? Is it also influenced by the rest of our market, how does it react to BHP or RIO moving during the day? Are you also watching the other sectors of the market to see if you can pick up on an overall market rally a little earlier than if you were just watching the company you wanted to trade? Only with continued observation and recording will you be able to truly answer all of these types of questions. And once you start to learn how the market is moving, it'll probably turn around and completely change on you, but as you go along you'll get better and better at picking up on these types of changes and will be able to adapt quite quickly.

One way to do this is to save a copy of the generic news article we all read in one way or another each morning before the market opens. Keep a record of any major news story that impacts the market during the day too. Collect data(or if you can't get it take screenshots) on pretty well everything you can think of -  stocks you are following, the local index, major currencies, commodities, overseas index futures, anything else that you can think of. At the end of the day, you should be able to explain to pretty well anyone what happened during the day and what the market is focusing on, which companies/markets are moving together, and which are moving independently. Over time you will start to notice certain correlations that you can start looking to trade off.


Recording your actual trades is very important too. In 2 years time, you want to be able to look back at the RIO trade you took the other day and KNOW exactly where you entered, where you exited, why you wanted to trade it that day and what you were thinking about at the time you took the trade.

Here's one way you can do this -  take a screenshot of the intraday chart with each trade you take, marked with the entry and exit on it. If you were looing at an EOD reversal/continuation pattern, then keep a copy of that too. If there is a news story behind the trade, then keep a copy of that on your hard drive with the annotated chart(s). You can also get audio recording software so that you can sit down at the screen with a microphone and run a commentary as the trade sets up right through to the exit and store that with the chart and news story. Sounds like a lot of work, but isn't that hard once you are in the habit of doing so. 

As you go along, you will end up building up a massive database you can then reference for later  use to get some feedback on what you are doing. Don't just read about what's going, actually learn how the market moves and how you react to what you see.

Hope this helps.


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## fallenangel22 (28 November 2008)

Thanks professor,

That's what I am talking about... Great post and really constructive ideas. 
Cheers to you.  And thanks everyone else too


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## kitrob (2 December 2008)

guys, Im enjoying your chat. Ive been at this trading game now for a year. I started by believing the local ABN Amro broker who put me into 10 stocks. I then got keen on all this stuff and started doing my own research, analysis etc.  This involved reading the usual books, just finished the Kaplan Technical Analysis course, reading newsletters till they come out my bum etc. It didnt take long for me to realise that the ABN broker didnt know ****. Meanwhile because I did not know about stop losses and other trading tools my 10 stocks tanked to the point that they must now sit in the bottom drawer till they return to value in 5 years time. (I dont have to sell stock at 50% of its purchase price!!!) Needless to say the expensive ABN broker has been fired and I now use Directbroking for my trading and Incredible charts for my analysis. Through all this I have deduced that it is bloody difficult to make money in the markets going long in a bear market. Im convinced that these guys who claim to make these huge returns in trading do so in bull markets and are to a large extent reliant on the market bull rather than there expertise to make there gains. I know you can short etc but show me the financial wizards of the last 12 mths?. anyway, despite all that I am ahead for the year apart that is from my bottom draw buys which remain alive. Anyway can someone help me. I want to use a live feed to the ASX with good charting capabilities. I have looked at Boursedata but at $120 per mth its a bit expensive. Has anyone got any suggestions?


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