Posts Tagged ‘Day Trading Chart Patterns’

Day Trading Stocks – Price Action and Volume

Tuesday, January 8th, 2013

Day Trading Stocks using price action and volume 

In this video we show you are best day trading stocks from this morning.

By using relative strength as an indicator you can locate potential trade setups and then use price action and volume to validate your entries.

Day Trading Stocks – Our best day trading stocks from January 7, 2013

Monday, January 7th, 2013

Best Day Trading Stocks – January 7, 2012

In this video we show you a few of the day trading stocks that were on our list for today.

You will see  few good examples of relative strength and weakness and few textbook chart patterns to trade.

 

As you can see most of the day trading stocks on our Watch List performed well despite the sideways trading in the overall market.

Intraday Swing Trading Stocks and ETF’s

Tuesday, February 14th, 2012

Swing Trading BLOG – Swing Trading Boot Camp

Today I thought I would take some time to show you some examples of our Intraday Swing Trading strategies.

Lets first take a look at the Diamonds ($DIA) to see how the market started out this morning.

DIA - Intraday Swing Trading

In the chart above you can see how the market GAPPED DOWN opening well below yesterdays close.

You can then see the two bars after the open are "inside bars" and this gives us a nice pattern to trade once we get a breakout.

We always wait 15 minutes (3 bars) to allow the market to establish itself before we look to enter into a trade so this was a good setup for us.

As volume starts to pick up Bar #4 creates a BREAKOUT to NEW HIGHS.

Both price action (3 bar break) and increasing volume are exactly what we need.

We looked around and there were plenty of stocks with a similar pattern to trade.

Along with $DIA $CREE stood out as a LONG trade to us with a nice pattern and defined risk.

$CREE - Intraday Swing Trading

Again the price action was good and volume was increasing.

The overall market (and $CREE) continued higher but then stalled out bit.

As an Intraday Swing Trader you have to nimble and and react quickly when the market shows signs of changing gears.

This type stalling action we see after a GAP DOWN is a flashing caution sign for us.

At this pivotal point of change you also need to scan the market to locate potential trading opportunities.

When the market "stalled" we began looking for stocks that were weaker than the overall market (relative weakness) and found $PCAR and $PPO.

$PCAR - Intraday Swing Trading $PPO - Intraday Swing Trading

Both stocks GAPPED DOWN with the overall market but never rallied to new highs when the market did.

Both stocks also created a very nice "lower higher" setups after an orderly retrace from their initial low of the day.

As the market begin to fall apart the selling volume started to accelerate in $PPO and $PCAR triggering trades in both stocks.

Our LONG trades were not looking good but we actually got out of $CREE with a profit.

Once the market broke to down to NEW LOWS we were now in SHORT mode.

Both $PPO and $PCAR pushed lower as well before showing signs of a retrace.

$PCAR $PPO

A few bars later and after a retrace off of the lows the $DIA was setting up for a move lower.

$DIA

$CREE eventually sold off with the market pushing down to a new low for the day.

$CREE was also now setting up nicely for a good SHORT trade.

The "lower high" was established and we were now able to draw our DOWN TREND lines to create a nice channel for context.

This is classic PVT trading!

$CREE - Intraday Swing Trading

$CREE followed through nicely to the down side and created a "lower low" as the sellers stepped in.

$CREE - Intraday Swing Trading

$CREE pushed through the bottom of the channel expanding it a bit before showing signs of a retrace.

The price and volume action on the last bar in the chart below shows tell tale signs of the move coming to an end.

$CREE - Intraday Swing Trading

Since we only trade the first two and last tow hours of the day we were now "flat" as the market began to retrace just after 11am.

Here is a summary for our morning.

We went from LONG to SHORT in a few stocks and identified stocks that were weaker than the market.

Once the market "stalled" and began showing signs of breaking down we took trades in these "weaker" stocks.

The market followed through to the down side and these weak stocks sold off nicely.

After making new lows the market setup for another move lower which allowed us to enter into several new trades that worked out as well.

Hopefully this walk through gives you some insight into how we swing trade intraday.

Intraday Swing Trading Strategies

Wednesday, August 25th, 2010

After receiving numerous inquires about the day trading techniques we use to "Swing Trade" on an Intraday chart we thought we would post a few examples from today's trading session.

Although "Swing Trading" in generally used to define an overnight strategy you can view this article to understand how we define "Swing Trading" for day traders.

Although the overall market (DJIA) finished up a mere 19 points today the intraday price swings and volatility offered plenty of opportunity for "Swing Trading" on the 5 minute chart.

Here is the 5 minute chart of the Diamonds (DIA)

DIA 5 minute

You can see from the chart above that the overall market GAPPED DOWN a bit and rolled over into the 10am number.

After the number came out the market attempted to push lower but ended up putting in a higher low just after 1030am.

After this higher low we rallied to NEW HIGHS for the day only to stall around lunch time.

Just after 2pm we again pushed to NEW HIGHS for the day and then had nice afternoon rally until the last 10 minutes of trading when we saw a the market retrace into the close.

So now that you see how we viewed the price action and chart patterns for the overall market let's take a look at some of the individual stocks and ETF's.

Since the SHORT TERM trend in the overall market was DOWN and we GAPPED DOWN we were looking to the SHORT SIDE as we rolled over on bar 3 (9:40-9:45am).

As always though we are constantly scanning the market to see which stocks are showing relative strength and which are showing weakness.

The first trade we put on this morning was in St. Jude (STJ)…

STJ - 5 Minute

Due to the daily chart and recent news in this sector we had STJ on our Watch List this morning.

As the market moves higher on BAR 1 you can see how STJ reverses intrabar and closes near its low on the same bar.

On BAR 2 the market moves to NEW HIGHS temporarily only to rollover and close near its low and STJ creates a small "inside bar" and hardly ticks ups at all.

A good sign of relative weakness (for now).

As the overall market continues to rollover to NEW LOWS on BAR 3 we had a nice SHORT setup in STJ.

For this 3 bar chart pattern we set our INITIAL STOP .01 above the high of BAR 2 at $35.

Our entry price was a few cents below the low of BAR 2 at $34.90.

We set our profit target at $34.70 and we were able to cover our position as STJ pushed lower just prior to the morning number.

STJ

Another stock that showed some obvious relative weakness this morning for us was Mosaic (MOS)…

MOS - 5 minute

MOS rolls over with the overall market right into the 10am number.

After 10am MOS and the overall market put in a 2 bar retrace until the 10:10am bar.

We are still looking for SHORT trades at this point since the market has pushed to NEW LOWS for the day and has now retraced.

As the market stalls and trades sideways MOS starts to head lower.

This is a classic INTRADAY SWING TRADE!

The text book lower high in MOS offered us a nice opportunity to get SHORT in an attempt to profit from the next DOWN SWING in price.

MOS

Our INITIAL STOP placed .01 above the lower high at $56.28.

Our ENTRY was just below the LOW of the bar that created the lower high at $56.02.

This set our initial risk at .26/share for this day trade.

We covered our SHORT at $55.36 (for a little over 2.5/1 reward/risk ratio) as the overall market confirmed its higher low on the 10:35-10:40am bar.

MOS

As the market confirmed it's higher low we had several strong stocks that we were watching.

Notice how the price action of these stocks differ from the weak stocks above.

The first stock on our LONG list was Research in Motion (RIMM)…

RIMM

Notice first how RIMM GAPS UP on the open as the overall market is GAPPING DOWN.

Also unlike the overall market RIMM heads straight up until the 10am number while the market is headed straight down.

A good sign of strength wouldn't you say?

At 10:40am as the market is confirming its higher low RIMM has retraced off of the high and is now set to possibly head to higher highs.

RIMM gave us a nice setup on the 10:55am bar as the market took out the 10am high and started to head up.

RIMM

Our INITIAL STOP LOSS was placed  .02 below the LOW of the 10:50am at $47.70

Our ENTRY PRICE was .02 above the HIGH of the same bar at $47.84 for an initial risk of .14/share.

We were able to EXIT our trade at $48.24 (2.85/1 R/r) as the overall market and RIMM began to retrace.

This is another classic example of day trading the INTRADAY PRICE SWINGS in the market!

And for our last example let's take a look at the chart of Harman Intl (HAR)…

HAR

Notice the relative strength in HAR this morning as it never traded to new daily lows as the market rolled over on BAR 3 this morning.

The first LONG opportunity in HAR came during the bar at 10am.

As the market began to retrace at 10am HAR created a bullish engulfing bar and traded to a NEW HIGH for the day.

If a stock moves to NEW HIGHS for the day prior to the market doing so it is a sure sign of strength and a stock to watch if the market continues to push higher.

The second opportunity to get LONG in HAR was the 10:40am – 10:55am bars on the chart.

This chart clearly defines an intraday UP trending stock.

Relative strength right from the open and then a series of price swings that create HIGHER HIGHS and HIGHER LOWS.

Here is the chart with the Swing Highs and Swing Lows marked.

HAR

When the market cooperates strong trending stocks like this often give you additional trade setups when the afternoon session rolls around.

The breakout at 2pm and getting LONG just after the 3pm pullback were two more opportunities to profit in this stock.

The afternoon also offered up several more LONG trade setups for us as the market headed to new highs.

Some of the other stocks we traded after 2pm were CREE, LNC, WMT, ANF, AKAM, CLF and WYN.

We hope this post provides you with some insight of how we "Swing Trade" on an INTRADAY price chart.

If you have any questions or feedback please leave us a comment below and as always…Good Trading to YOU!

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