Opening Focus
Understanding how the initial 30 minutes of trading normally referred to as the Opening Range truly sets the stage for the rest of the day is key. Having the knowledge and confidence to go into the market open and be able to manage big gap open days whether up or down as well as knowing what to look for the rest of the day will bring your trading to a whole new level. If you would like more info please go to the Member Resources tab there is a link under resources Links
I personally trade the #1500 model which you follow as well as my other personal accounts & portfolios. When the opening bell rings at 9:30 my focus is on executing scale outs that are at or near their targets (see targets definition), closing open positions and watching stops if we are gapping down.
As members of NYDOUGH you should be laser focused on the same. 99% of the time I trade within the entries Tgts and stops that I post on twitter and my trade sheet and need to trade accounts myself it is absolutely 100% necessary to manage your own accts accordingly. Occasionally I will make a timely adjustment and post it otherwise use what’s posted and on the sheet.
Trades & Watchlist
I will be posting a Watchlist which will be a combination of Equities, ETF’s & Options.
This list is derived from proprietary scans which scout Daily, Weekly and Monthly time frames for trade setups.
The List will have a Trigger Entry, 2-3 Targets and a Stop (see Trading Resources Tab & Click on Watch List).
The list represents trade ideas for all my portfolios including the model you will follow here on my Private Twitter Feed.
The List lays out executable trades that i may or may not enter if the trigger price is confirmed (see the “entries” definition under Educational Resources Tab to understand what a confirmed trade means). Please note that I may enter some, all or none of the trades on any given day and will always post on twitter the trades executed for the @NYDOUGH-PRO Service. The list is yours to use in addition to the live trades I post and enter.Please feel free to trade as many of these as you like on your own
My scans for the Watch List work off closing prices and historical data, intraday price action may trigger other trade alerts that are not on the Watch List so, expect instances during the trading day that alert of a trade which will obviously not have been on the list. Some of these trades may come near the close of the market so be alert near the last 10 minutes of the close.
I will post a #watch hashtag for intraday trade ideas not on the Watch List or from any Intra Day alerts I get not already on the list.
Trade Execution; Its almost impossible to expect to get an exact price I get on any trade regardless of the underlying security. Once an entry price triggers and confirms I place a trade, get my confirmation, type out a tweet to @NYDOUGH_PRO and then you see it. The markets are fast! so in that time frame it would be fair to assume the bid offer price may be different by a small percentage than what I paid. This is especially true on thinly traded securities and the ones with big spreads. Note: I work of the same exact Watch List you get from the site. Every morning i load each symbol, set trigger alerts on each one and am ready for the trade if it signals
Placing a trade; Make note of the spreads! Spreads can be very wide. I do not suggest market orders or placing trades that take out offers on wide spreads. Some spreads can make or break a trade use your discretion.
Entries
How to make a proper entry on a 1 min chart. Once my entry trigger price is achieved that initial candle must close over the trigger price. That initial candle close over the trigger counts as the first 1 min count. The next candle also has to close above the trigger price and then the next. Once 3 candles close over the trigger price wait until the next 4th candle opens! if it opens over the trigger the entry is confirmed and you can enter your trade.
Here’s a catch please pay attention on this: If you have a close under the trigger anytime in-between the 1st and 4th candle count, the count starts all over there can be no break in the 3 min confirmation sequence. Its a #DOUGH thing 😉 it usually means no conviction at that price.
All my entries triggers are a Giant smoothie of everything you typically would look at on an individual basis. I don’t look at independent Price Volume RSI MACD BOLLIS FIBS etc. My entries are the result of blending & smoothing them all into one price. #DOUGHMATH
Live Trade Tweet Format
GOOGL 180302C1140
GOOGL needs 1127.40 with 3 min confirm
- #openingtrade this is the start of an opening trade which can be a half or full position
GOOGL 180302C1140
2 @ 3.40
GOOGL 180302C1140
tgt2 1127.21 is massive its a breakout trigger with nothing in its way til 1147.60 watch how explosive this gets thru 1119.21!!
- #scaleout this means scale out. I scale out of part of the trade at or above targets or if market action dictates a sale.
GOOGL 180223C1140
out 2 @6.30 leaves 1
- #closingtrade this is the closing trade means I’m closing out the whole trade
GOOGL 180223C1130
Out 1 @ 7.30 leaves
Targets
The Tgts I post are precise calculations. They are specific #s calculated over multiple time frames using proprietary blends of Momentum indicators and Oscillators.
- Momentum indicators are: Moving Avg’s and MACD.
- Oscillators are: Stochastics, RSI, Ultimate Oscillator (UO) calculations and a CCI Commodity Channel Index.
These calculations are used as markers and areas to scale out, however they are somewhat flexible. It is important to watch closely whenever price approaches any tgt. I pay close attention to price and volume to see if momentum is there as price approaches each tgt.
If the momentum and price is really strong i will let the trade continue and scale out after the tgt. Once the price has passed the target I now use that tgt as a trailing stop and let the trade continue. However, if it looks like the price is slowing or stalls after the target it just passed don’t let it go back under the tgt without scaling out. This process needs to be actively managed, dont lose the scale out ! If it gets near the tgt and looks like its loosing steam I scale as close to the tgt as i can. If the trade looks like its going to keep running let it run use the tgt as a trailing stop and scale when it looks like it running out of momentum some stocks can run past all targets without scaling out if they are strong. Targets are only markers, I scale near them, at them and after them. Remember scaling is cashing out of part of a position which takes risk off the trade as well as rings the register. There is always another trade ! This goes for all tgts not just tgt1.
All my targets are a Giant smoothie blend of everything you typically would look at on an individual basis. I don’t look at independent Indicators like RSI, MACD, BOLLIS, FIBS, etc. My numbers are the result of blending & smoothing of them all into one price. #DOUGHMATH
Stops
1st thing to understand about stops is that you should never place a stop loss based on a random amount of loss.
A stop loss should be based on a level in the mkt. Price should have to break that that level to prove your trade wrong. I like to see price violated as evidence I am wrong, that comes into play when levels of support or resistance are breached. I personally don’t play the % loss rules book Sorry! it goes against my trade style. Stops however are different for everyone and you must play stops according to your style and level of risk and comfort. No one likes to get stopped out especially if a few pennies later the trade reverses and goes on to be a good trade.
Everyone needs to have a clear picture of the market that you are going to trade. Whether that’s by pre mkt posts, Futures indications, news related sources, macro views of sectors, indices, scans or whatever you may rely on to determine mkt temperature, get all the info you can.
If you are comfortable to use a % of price as a stop/risk model or prefer to use the level a price would have to break through before your reason of entering the trade doesn’t make technical sense any longer, is all up to you.
I have seen all too many trades get stopped only to go on and win because of percentage based stops.
Soft Stop Order
Is a mental price or percentage set by traders where they will place a buy or sell order. A soft stop order is a position set by traders where they should buy or sell a security, however it is “soft” because it can be manipulated or changed depending on market conditions and special circumstances. a regular stop order is an order which has already been placed to buy or sell a security at a certain point, soft stop orders are used as more of a guide for traders to consider buying or selling at a certain point, taking other factors such as market sentiment and momentum into consideration.
Trailing Stop
A trailing stop is a stop order that can be set at a defined percentage away from a security’s current market price. A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor but closes the trade if the price changes direction by a specified percentage or increment. A trailing stop can also specify a dollar amount instead of a percentage.
Some of you have tweeted live with me and witnessed me move a stop .10 cents from my original stop. If I hadn’t moved the stop the trade would have stopped out as opposed to making a small adjustment to save a trade that goes on to be a great trade.
That’s part of live trading and i will post that on the feed if I make adjustments.
In my opinion % Stop loss traders use the 10,20,30% stop loss method because they take on a trade size that is too large & wrong for their R/R profile.
Price & support / resistance based stop losses line up with my entries Tgts & Scale outs.
Stop methods used by some traders are Greeks, some use %, others like myself use support of the underlying equity as well as POC others use % pricing on the option itself.
I can’t and wont tell u what to use. I will supply u with mine.
Things I consider for stops are:
- The type of trade I’m entering.
- Trade type =Scalp/Mini Swing or Position
- R/R at least 1.5:1
- ATR Avg True Range I like high ATR’s and I use this calculation all the time its a key volatility measure that can be used for upside targets as well as stops.
- OR = Opening Range this is another key factor. I see traders jumping into High ATR trades in the first 30 seconds of the open which is insanity! I wait at least a full 5 minutes & as of late wait 30 min.
Placing a correct stop loss is key to a successful trade. Well calculated based off entries, targets and correct position size, will give you better confidence knowing that the trade was crafted with a plan as well as a discipline. Hope this helps all of you !!
Definitions
ATR
A technical analysis volatility indicator. Apart from being a trend strength gauge, ATR serves as an element of position sizing in financial trading it does not provide an indication of price trend, simply the degree of price volatility and is typically measured over a 14 day period The range of a day’s trading is simply high minus low
Point of Control (POC)
The price level for the time period with the highest traded volume.
Soft Stop Order
A mental price or percentage set by traders where they will place a buy or sell order. A soft stop order is a position set by traders where they should buy or sell a security, however it is “soft” because it can be manipulated or changed depending on market conditions and special circumstances. a regular stop order is an order which has already been placed to buy or sell a security at a certain point, soft stop orders are used as more of a guide for traders to consider buying or selling at a certain point, taking other factors such as market sentiment and momentum into consideration.
Trailing Stop
A trailing stop is a stop order that can be set at a defined percentage away from a security’s current market price. A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor but closes the trade if the price changes direction by a specified percentage or increment. A trailing stop can also specify a dollar amount instead of a percentage.