How to train your mind and improve your trading

As part of your everyday effort to improve your trading you must look at what is working in the market on your time frame.

As swing trader I am looking for capture part of a 3 to 5 days momentum burst move with 8 to 20% potential or 5 to 20 dollar potential.

In order to understand nature of such moves everyday I look for stocks that have gone up 8% plus in last 5 days.

I study those 8% moves closely to see how the move happens. What was the setup before the start of the move, what triggered the move, what kind of breakout, what kind of volume, how did the move progress, and so on.

A daily effort like this cumulatively builds your understanding of the setup you trade. Because if you want to find 8 to 20% moves in 3 to 5 days, you must know thousands of such moves. So that when a similar setup shows up you can indistinctly react to it.

Studying these setups also shows you subtle variation in setups. There are many variations of the 3 to 5 day momentum bursts you will find if you do this for months. Some are high tight flags, some are double bottoms near top of the range, some are bottoming setups from 52 week low, some are part of range bound action.

But most share some common characters. Moves of 8 to 20% start from some kind of pullback or sideways moves. They most often start with narrow range days. They are not up 3 days in a row before start of the move. Most have low volatility phase prior to breakout. On the first day of start of their 8% plus move they have significant range expansion. Most moves only last 3 to 5 days before having pullback.

If you know this you can anticipate some moves. You can figure out where to enter, where to exit, where to put initial stop, where to move stops and so on.

The best part of doing it is , you will build your own knowledge and base your trading based on your own observation and your own derived rules based on what "actually" happens in a momentum burst of 3 to 5 days.

In order to do this I run 2 scan one bullish and bearish.

Bullish 8% plus in 5 days

c/c5>=1.08 and minv3.1>100000 and c>=5

Bearish 8% plus in 5 days

c/c5<.92 and minv3.1>100000 and c>=5

After running the scan everyday I study these moves. The first thing in the morning is I review these candidates. Similarly I run a 5 dollar plus bullish and 5 dollars plus bearish scan everyday. For longer term moves study I use the Double Trouble scan.

If you are man or women enough to do this daily for 6 months or more you will discover a key to making millions trading momentum bursts of 3 to 5 days.

No efforts no gains. Build your own life long expertise one day at a time.