Advice on developing trading strategy

[sazr]

Hello, what should I be doing to help me develop/find a trading strategy? What did you do to develop a trading strategy? For my specific situation I intend to do day trading of stocks on the ASX.

For eg, should I be doing stuff like:

• Find yesterdays most volatile stocks and view their 5min candlesticks. Try to find patterns that are occurring so you can detect these for future stocks.
• Use some specific software to perform back-testing (what software should I use?)

Could anyone share some practical advice on what to do here as I'm lost.

 

[divs4ever]

traders among us include @Skate , @tech/a , @DrBourse

the @ bit hyperlinks the members name search can search for their numerous posts/threads

there are several others ( past and rpresent )

BTW i don't trade ( as such )

good luck ( there is much to discover here )

 

[tech/a]

Just quickly as I'm strapped for time.

You need volatility without it you cant day trade.
Day trading Aussi stocks is difficult but not impossible.
Pennies are good if you can pick it. $5K to $30K
Blue chips are also good if you have deep pockets $30-100K to day trade.

I've written volumes on this site and I'd edfinately give @peter2 many trade
threads a read.

Happy to answer specific questions if you ask.

 

[debtfree]

Hi @sazr

@tech/a has a heap of great reading if you chase it up that will point you in the right direction and as he stated above, @peter2 has got some great reading as well that's worth a read or two.
To save you a bit of time looking (if interested) I've put a list of Peter's Threads below with the links. A lot of reading but certainly worth it. Hope it helps.

Started on the 11th Feb 2015 ...... Pavilion103's LIVE ASX Momentum Setup Trading Thread ...... https://www.aussiestockforums.com/threads/pavilion103s-live-asx-momentum-setup-trading-thread.29536/
Started on the 25th Jun 2015 ...... ASX Momentum Trade Book - Part 2 .............................................. https://www.aussiestockforums.com/threads/asx-momentum-trade-book-part-2.29971/
Started on the 21st Sep 2016 ...... P2 Trade Book ....................................................................................... https://www.aussiestockforums.com/threads/p2-trade-book.31422/
Started on the 28th Dec 2016 ..... P2 ASX Weekly Portfolio ..................................................................... https://www.aussiestockforums.com/threads/p2-asx-weekly-portfolio.32779/
Started on the 28th Jan 2018 ...... P2 Momentum Trade Book - Part 3 ................................................. https://www.aussiestockforums.com/threads/p2-momentum-trade-book-part-3.33744/
Started on the 3rd Sep 2018 ....... P2: A batch of FX market trades ...................................................... https://www.aussiestockforums.com/threads/p2-a-batch-of-fx-market-trades.34221/
Started on the 18th Nov 2019 .... P2 starts another ASX Portfolio (Wkly/Dly) .................................

https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/

Started on the 13th Dec 2019 .... P2 US Equity Portfolio ......................................................................... https://www.aussiestockforums.com/threads/p2-us-equity-portfolio.35088/
Started on the 23rd May 2022 ... P2 - ASX Swing Trading Portfolio (Pull-Backs) ............................... https://www.aussiestockforums.com/threads/p2-asx-swing-trading-pull-backs.37050/
Started on the 13th Apr 2022 .... P2: ASX Speculative Portfolio (weekly charts) .............................. https://www.aussiestockforums.com/threads/p2-asx-speculative-portfolio-weekly-charts.36979/

 

[tech/a]

@sazr

Have a bit more time and thought about this “ Often asked “ question one I asked a lifetime ago.
Its daunting Stack of information in fact information overload.

Day trading is intoxicating , you see examples mostly from spruikers selling their secret which youll
note becomes more and more complicated as each “ Secret is presented —- always one more for another investment and you’ll be making a fortune.!!!!

This is what I found in my case and works for me.

This is ONE. of my daily strategies
I’m looking for pennies with lots of liquidity
under 10c and above 2c preferably but not exclusively closer to 10c

There is a reason for this group
at under 10c price moves in .01 c moves 100,000 = $100 a tick.
but once it gets going and at 10.5 c it moves in .05 c moves = $500 a tick

if it flicks back to under 10c it also moves in .01 increments
often if all is moving strongly I’ll have been adding over sometime and my holdings could be many 100,000 s so you can see it can be well worth it.

so how do I pick a prospect ?

MOMENTUM

I search for 52 week highs
Liquidity
technical markers in lower timeframes that show me clearly that sentiment has changed
and supply has decreased and at best stopped. I look at 5/15 and 1hr timeframes

I’m looking for changes in fact strong changes in sentiment that also show my position is at risk.

what is my timeframe ?
from intraday to a week or more —- if momentum is mine and consolidation patterns continue to show a pause in momentum and the continue I’ll stay in.
but I won’t be slow to get out if important support areas both in the chart and also in book levels
ill also leave it on a watch to re enter —- but a re entry is pretty rare.

there are great search engines in IB‘s software

so in your search look for Supply and demand technical indicators
consolidation patterns DURING a momentum move
BE DECISIVE
learn not to panic and definitely don’t HOPE if your wrong hoping won’t make it right!

Risk 1-2 % max on your initial capital if you pick momentum correctly this won’t happen often.
protecting profit will be you main concern.
So this is just a small snippet you can do very well often I’m just trading one stock but a grand
or more a week keeps me interested.

 

[tech/a]

One I’m currently trading into next week
You can clearly see the obvious technical buy signal

 

[rcw1]

Hello, what should I be doing to help me develop/find a trading strategy? What did you do to develop a trading strategy? For my specific situation I intend to do day trading of stocks on the ASX.

For eg, should I be doing stuff like:

• Find yesterdays most volatile stocks and view their 5min candlesticks. Try to find patterns that are occurring so you can detect these for future stocks.
• Use some specific software to perform back-testing (what software should I use?)

Could anyone share some practical advice on what to do here as I'm lost.

Good evening @sazr
Hoping you are getting your head around day trading. A most self-satisfying and rewarding trading construct which takes years/decades to attempt to master ... and even then .... but certainly is not insurmountable or for the faint hearted, for that matter.

what should I be doing to help me develop/find a trading strategy? What did you do to develop a trading strategy? For my specific situation I intend to do day trading of stocks on the ASX.
Great questions, in response and only according to rcw1, take it or leave it:

You must enjoy Day Trading and the challenges that will surely await you;
Acquire the virtue of patients;
Always be honest with yourself;
Always conduct your own due diligence;
Research, research and research again.... ;
Have the time to day trade;

Do not use your hard earned to trade until you know what the puck you are doing;
Always watch, look, interpret and understand the dynamics;
Work out what to buy, when to buy;
Work out when to sell;
Do not feel obligated to effect trades every day only when the opportunity presents with current knowledge level;
Only dummy trade; no cash and see how you go first for a long time then buy stocks using small amounts of money;
Gain confidence knowledge;

Do not be gullible and believe everything you read, view or get told;
Believe nothing, trust noone, until you are happy it meets your requisite benchmark of evidence;
Make sure that you are always the one that makes the decision what to trade;
Do not be influenced by anybody;
Don't do much talking, just learn and always ask the question if you don't know but attempt to firstly find out by your own research - a very good habit to get into;
At some stage you will puck up, lets be clear on this, accept it and move on, don't dwell learn from your mistakes and don't do it again. As aforementioned, use small amounts of money until you get you head across things;

Read these books:
The Stock Trader by Tony Oz - How to make money trading stocks; and
Japanese Candlestick Charting Techniques by Steve Nison

Check out the forum - find threads to read and learn. There are plenty of them.

When you done all of this, get back to rcw1 but don't use big words otherwise rcw1 will get confused ha ha ha ha ha just jokes... All the very best, take your time and make money.

Kind regards
rcw1

 

[tech/a]

One I’m currently trading into next week
You can clearly see the obvious technical buy signal

Happy with that for 3 days trading
Picked up over $4 k on around $9k investment

 

[tech/a]

Just saw this on Facebook

 

[DrBourse]

Can anyone help, I am Looking for some advice on the TradingView Watchlists....
Anyone know how to DELETE the highlighted watchlist as shown below - On my TradView ,The Rubbish Bin Icon is not active for Flagged Watchlists....

 

[DrBourse]

Can anyone help, I am Looking for some advice on the TradingView Watchlists....
Anyone know how to DELETE the highlighted watchlist as shown below - On my TradView ,The Rubbish Bin Icon is not active for Flagged Watchlists....
View attachment 183341

I tried the following from the TradView Help Section....

THAT DID NOT WORK....
SO NO IT WAS NOT HELPFUL....