I am working hard to let the following conditionals guide my daytrading:
When it comes to going long—
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Basic mechanical framework for deliberate alpha capture (versus acting spontaneously)
1) Market open at least 10mins, with minimum 20mins left in the session
2) No longs if SPY is red by more than one percent
3) Relative volume: run rate minimum 5% greater than SPY.. stocks w/ light volume = no trade
4) Stock is trading up between 1% & 10%
5) Average daily volume no less than 300k
6) No market order until at least 10mins on watch.. avoid impulsivity
7) No limit order until at least 5mins on watch.. never buy tips or scan hits w/ immediacy
8) Stop loss must be determined prior to inserting buy order & is not to be more than 2 tics below 15min 20sma
9) Place stop loss in order book immediately following entry
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Mandatory moving average locations (adherence to which prohibits counter trend trading)
10) Price above daily 8sma
11) Price above hourly 8sma
12) 15min 8sma positioned above 20sma
13) Seek to execute near rising 15min 8sma with stop below 20sma
Overheated indicators (fools rush in)
14) Price must not be near or above daily upper bollinger band = froth, too overbought*
15) Price must not be near or above hourly upper bollinger band = relax, wait for 15min pullback to 8sma*
*exception: allow for entry above upper bollinger bands when they’re contracting, especially after prolonged pinch, or even when they just begin to expand.. but after multiple bars & cycle of volatility, banging on upper bollinger band —avoid setup.. sheep chase / too late
And then conversely, when shorting—
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Basic mechanical framework for deliberate beta capture (versus acting spontaneously)
1) Market open at least 10mins, with no fewer than 20mins remaining in the session
2) No shorts until SPY trades below open for at least 15mins
3) Relative volume: run rate minimum 5% greater than SPY.. stocks w/ light volume = no trade
4) Stock is trading down between one half & 5%
5) Average daily volume no less than 300k
6) No market order until at least 10mins on watch, avoid impulsivity
7) No limit order until at least 5mins on watch, never buy tips or scan hits w/ immediacy
8) Stop loss must be determined prior to inserting short order & shall not be more than 2 tics above 15min 20sma
9) Place stop loss in order book immediately following entry (never more than 1%, lessen size if necessary)
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Mandatory moving average locations (adherence to which prohibits counter trend trading)
10) Price below daily 8sma
11) Price below hourly 8sma
12) 15min 8sma positioned below 20sma
13) Seek to execute near declining 15min 8sma with stop above 20sma
Overheated indicators (fools rush in)
14) Price must not be near or below daily lower bollinger band = blood = too oversold*
15) Price must not be near or below 15min lower bollinger band = relax, wait for relief rally
*exception: allow for entry below lower bollinger bands when they’re contracting, especially after prolonged pinch, or even when they just begin to expand.. but after multiple bars & cycle of volatility, banging on lower bollinger band —avoid setup.. sheep chase / too late
**rules are subject to change, but only after the market has closed
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