Welcome to Daytrading University's Tactical Notes - a step-by-step overview of guidelines for those of you who are trying out our pro Live Training Room. Try them out for yourself. Screen captures coming soon for illustrated examples.

First, take a look at my current 6-monitor setup here (scroll right to see all of it).

These are the indicators and overall process I use continuously to scan the market for daytrading opportunities, in descending order of importance (top indicators most important). Think of it as a process flowchart for daytrading decision-making (I'll add more chart details to it in time).

Note that many new daytraders fail because they only look at the bottom indicators, eg specific stock chart patterns, and get whipsawed and/or make late entries. The market is a system and you need to read it top-down, rapidly, to scan for profitable trading opportunities. Welcome to precision day trading:

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If narrow range day then we trade less or not at all. Intrarange trades are most often fibonacci bounces vs. breakout trades.

If wide range day then look for cup pattern breakout 2-day highs for entries.

 

 

 

 

If TRINQ > 1.0 and trending up, then we look for weak sectors, as the broad market is falling and we look for breakdown shorts.

IfTRINQ < 1.0 and falling (or chopping) then we look for breakout longs and/or reversal bounce longs following selloff.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If we see a 2-day high breakout in a tier one stock in a strong sector then we look to our core trading stocks for breakout longs in the direction of the stock that's making the move.

If the tier one stocks are just chopping around in each sector then we don't trade much unless a specific stock is having a wide range day with a tradable chart pattern.

If we see one or two sectors that are over 2% after 10am etc either red or green then we look for the "outlier stocks" in these sectors for continuations and/or reversal plays.

If we see a strong trend from 9:40 til 10:15 or so, eg changes from 1.1% green to 1.8% etc, then we look for continuation plays in the direction of the sector.

How would you route a sell order if you were long 400 KLAC here? I'd do an ISLD sell 31.48. MMs unlikely to provide enough liquidity to sell into, I'm likely to get an ISLD fill here, I wouldn't tempt fate by jumping into the soes queue with only 11 size over the .50 here.
How would you route a sell order if you were long 500 VRSN here? Two options, soes limit 41.88 (best, if you're fast and the mms are dropping their bids quickly) or ISLD 41.80 (the 'safe exit', but potentially more costly since going out of market to sell). Depends on the tape.

Ok traders, that's the nuts and bolts of the basic scanning strategy I use for daytrading Nasdaq stocks. I hope the information is useful to you. Take a screencap of it and keep the graphic file for future reference.

To see MORE INFORMATION about our live professional training room, click here.

Best wishes for successful trading!

 

Questions? Email me