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How to stop being a headless chicken and build your own trading method

Posted on 1/24/2019
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If you want to make lots of money trading in 2019, then you need to stop being a headless chicken and develop expertise in trading a setup or couple of setups.

Once you master a setup you will develop an edge. Then you can either increase number of trades or risk per trade to make more money.

How can you develop an expertise in trading a setup?


First step is to find things that work in market and are structural in nature and build your trading methods around them to exploit that market tendency.

For example all my setups are based on momentum. Momentum is one of the most enduring structural tendency in stock market.If you base your methods on structural tendency of the market then you are likely to be profitable.

Finding structural tendency is just the beginning. After that you need a daily process to extract money using that phenomenon.

What makes some of this process difficult is that you have to figure out everything for yourself. There are many resources you can tap but ultimately the responsibility of making it work is your own. Not everyone can do it and that is why there are many unsuccessful and bitter traders.

You have to design your own method, devise your own rules and have enough confidence to trust your own method. Every successful trader goes through that.

This process is time consuming and costs money. If you stay in this game long ultimately you will figure out a way to profit from the market.

There is an alternative which is less painful and less time consuming. You build your trading , process, and method around someone else's trading . This can allow you to substantially reduce the time curve and reduce your risk.

Look for successful traders and in the beginning faithfully copy their method. Once you have success with it , then build over it and add your own nuances.












Key to making profit in the market is to understand momentum.

Posted on 1/23/2019
Key to making profit in the market is to understand momentum.

Intricate understanding of momentum will help you find different kind of trades. Once you understand momentum it is lifelong learning and you will never go hungry.







Easiest way to do this is to study everyday stocks up 20% plus in a week and 25 stocks up most on one year , six month, quarter and month basis.

A study like that will improve your trading more than any book, blog , guide , or paid service. 

RETA example of good anticipation setup

Posted on 1/18/2019
RETA was recommended anticipation setup in last night Stockbee Members Newsletter. T


This kind of setup gives you very low risk entry and if it works very good risk to reward.


Anticipation is the simplest of the setups I trade. All the work involved in finding good anticipation setup is done in night. After that it is just execution. 

Key to understanding anticipation setup


Understand volatility and range cycles...
Momentum burst leads to Volatility expansion. During this phase stock quickly makes a 8% to 40% move in matter of days.
Consolidation or volatility contraction follows some of these breakouts, while some momentum burst fade and reverse.
Fading momentum burst move is what mean reversion traders build their setups and trading around.
When stock instead of fading after momentum burst forms orderly consolidation or in other word has volatility contraction , it gives us good anticipation setup.
Such orderly volatility contraction periods have high probability of following through in direction of momentum.
In anticipation setup our scans try and identify such consolidation or volatility contraction periods. We put orders in anticipation of breakout or enter as soon as stock starts to breakout.
You want to find the consolidation or volatility contraction phase and enter at an interface between contraction and expansion. Not too early or too late.
When a momentum burst is followed by such contraction you get a good risk reward trade. If momentum fails to show up you get stopped out for small loss or break even.
In a strong trend move or longer duration trend move , momentum bursts followed by Volatility contraction followed by momentum burst happen several times.
You want to find the consolidation or volatility contraction phase and enter at an interface between contraction and expansion. Not too early or too late.
Range Expansion, range contraction, Range Expansion, range contraction. that is the cycle. If you understand that you will be able to find anticipation setups.
The more you do it better you will become at it. There are some tactics and nuances to make this cycle work.
Selecting a stock with ultra high momentum is one as against a slow moving stock. We want to trade for magnitude and not momentum. That way you get most bang for your bucks as the trade quickly moves in your favor and also makes more explosive move in short period of time compared to slow trend.
Lot of success in this setup is also function of trading tactics like pre planned entries, types of orders, stops placement , moving stops aggressively, profit harvesting and so on.
It takes time to develop and fine tune to the tactics and execution part of the equation. But once you do it you can find hundreds of profitable trades in a year.

Manage what is under your control

Posted on 1/07/2019
Manage what is under your control. If we do damn good job of that rest is easy.
What is under your control in a trade.


Which stock to buy

is it under your control?

How much to buy

is it under your control?

Where to buy

is it under your control?

Where to put stop

is it under your control?

Where to exit

is it under your control?

How many trades to do

is it under your control?


Are you doing a good job of managing these things.

Stockbee momentum 50

Posted on 1/06/2019

This list is published daily for the benefit of swing and position traders. As the saying goes go where the oil is, the momentum leaders are where opportunities for explosive gains are. As a trader you want to be stocks that are moving up or down at fastest speed. The following stocks give you the top stocks by momentum in the market.




Top Ranked stocks by momentum. The list is  updated daily.

You can access all the Top ranked momentum stocks for free by visiting this link.

The link gives you list of stocks on one year , 65 days and 21 days momentum.

That way you can focus on red hot momentum stocks in all three time frames of short, medium and long term.

PHM was anticipation setup


This was one of the highlighted stock as good anticipation setup last night. the advantage of identifying setup like these ahead of time is , it allows you to get very close stop.


As you can see stock is up 4% plus now. My entry was very early and very close to open , as a result risk is very low. My stop is already at break even on this.

A combination of anticipation and breakout setups allows you to lower your risk on breakout. More than that it many times allow you to also capture day one gains on breakout .

Many first day gains on breakouts can be 4 to 20%. Anticipation allows you to capture them.

If you are serious about making money swing trading , master anticipation setup. I have detailed it several times on this site with examples and scans. 

BRZU example of momentum burst setup


BRZU is example of a momentum burst kind of setup. It was up 30% in three days. Up 40% in 5 days.

These are the kind of setups which you can trade as swing trader to make money. These setups are fast velocity moves and can offer you quick profit for holding the stock for 3 to 5 days.

If you are serious about making money in 2019 master this kind of setup. 

How can you improve your trading in 2019


Just do one thing daily without fail.
Study stocks that are up 20% for a week and up 100% for a year
Everything you need to make money you will learn from that.
You need to understand nature of stock moves, how they start. how they progress, how they reverse.
By doing this daily you will have working model of what works in current market.
Then you can start designing the scans to find them.
This study will help you develop "your own understanding " of market moves. Once you have sufficient experience of doing this , you can start discounting lot of conventional wisdom or market speak. Because you can see what the Guru is telling you on Twitter or in book , or in a blog is not in line with what actually happens in market.

How can you do this

Run simple scans in Telechart

Study Bullish 20%

c/c5>=1.2 and minv3.1>100000 and c>=5

Study Bearish 20%

c/c5<.8 and minv3.1>100000 and c>=5


If you are trading low priced stocks you can eliminate last condition of c>=5
Do this daily and you are guaranteed to be a better trader by end of 2019. 

PRQR a momentum burst setup

Posted on 1/03/2019

Trading momentum bursts is one of the ways to make money in the market.

PRQR is an example of that . Stock is up over 16% in just two days. These kind of 8 to 20 percent momentum bursts are very common in market. They are short term impulse moves in market where stock attracts buyers and then other buyers notice and get on board.

These kind of moves are very profitable for skilled swing traders. 

To make lots of money create structure and process flow



Creating structure and process flow in your trading helps you stay focused. In absence of structure mind tend to wander all over the place. Aimlessly flirting with stocks to stocks or trying things for few days and abandoning does not work in trading.

I know this first hand from my trading in first few years. Ever Since I have put together structure and process for my trading , trading is effortless way to extract money from the market.

Typical losing trader or new trader are too excited by any new idea without researching it. Monday they get excited by stocks near 52 week high because they read about it on a blog.  Tuesday they read somewhere it is best to buy 52 week low. Wednesday they like all time high. Thursday they like low priced stock. Friday they like high priced stocks. Every Saturday and Sunday they have some new new insight.

In the process valuable time and effort is lost and not only that you lose capital and confidence.

This kind of behavior is symptom of lack of structural understanding of the market. Unless that is fixed you are unlikely to make money in the markets. Once you put in an effort to understand that you will find making money is easy.

First step to profitability is to understand structural anomalies in the market. Structural phenomenon in market do not change easily.

Stocks move in momentum bursts is structural phenomenon (based on that I trade momentum burst and anticipation setup). Stocks react to surprisingly good or bad earnings is structural phenomenon (earnings breakout setup is based on that). Neglected stock make big moves when catalyst shows up {EP setup is based on that). Stocks move in direction of range expansion (4% and $ breakout setups). Range contraction resolves in range expansion (basis for anticipation).

Structural phenomenon like these do not change. They have persisted for hundreds of years and will persist throughout your life time. When you own up one of these structural phenomenon and build trading method and process around it you will find better success and less stress. That is if you are really serious about making money trading.


You can be a discretionary trader and still have a very systematic thinking process to arrive at decision. You do not have to be mechanical trader to have structure and process. You can set daily or hourly process. You can create checklists. You can have stock selection criteria.

In absence of processes and structure your mind gets occupied by whatever is readily available. It becomes susceptible to improvise on the fly. It gets influenced by success or failure  of a trade. It flirts from ideas to ideas. In the process there is no growth of your capital.


Put a process and methodical framework around your  trading. It helps you  stay focused and helps you stay within self imposed boundaries. There is some sacrifice involved in this. You do not need to trade all structural phenomenon. You need to make conscious decision about time frame you want to trade and the structural edge you want to focus on.

I know many things in trading that work. I talk to many successful traders. Many very well known and successful traders are members of Stockbee site. They trade differently from me but all have structure and process in place.

In trading there are so many temptation, there is environmental noise , there is constantly changing market and complexity. The complexity kills many budding traders. That is where structured, formatted and regimented approach is what is needed. If you want to make money in 2019 , put structure and process around your trading. 

For example I have a very regimented approach for after hours analysis and it stays same for days, same thing for pre market analysis. Similarly during the trading day there is a set regimented routine. Lot of thinking has gone in to designing that regiment and I do not make changes to it for the sake of changes.

If you want to make millions trading  start by putting a process and structure around your trading.

RARX example of momentum burst setup

Posted on 1/02/2019

This year there will be around 2000 setups in market like RARX . The momentum burst is most common phenomenon in the market. 

Stocks move in 3 to 5 days bursts of 8% to 20% . These moves can be very profitable if you have structured method to find and exploit them.

If you are serious about making money trading this year learn this setup and master it. 

Being in tune with market phase is important

One of the critical skills traders need to develop is to align their trading with market phase. 

Being aware of situation and likely scenario helps you focus on right kind of setups and control risk. 

On a day to day basis if you can anticipate the market moves then you can decide whether bullish setups or bearish setups are likely to work. You can within that decide whether buying breakouts is going to work or buying pullbacks is going to work. 

For example in current market conditions buying a breakout on momentum stock would have lead to frustration and getting hit with stops, but buying an overextended stock for a bounce or stock near low for a bounce was winning strategy. 

BMA is an example of Bottom Bounce kind of setups that worked in last one week.


Situational Awareness skills will help you take your trading game to next level. If you want to make millions trading develop a habit of writing Actionable Situational Awareness daily.

Actionable Situational Awareness will have actionable actions like "focus on Bottoming setups because market is overextended to bearish side", or "Focus on fading stocks that bounced in last 5 to 7 days as overall market is likely to fade the bounce", " Tighten stops on existing positions because market is vulnerable to correction" or "sell into strength today" and o on and on. 

Making your Situational Awareness or market analysis "actionable" is key. Just analysing things and not working on them is not going to help much. 

Once you develop Situational awareness you will be able to avoid risky periods in market by being proactive. Look around so many traders this year lost money or gave up good gains because they did not do good job of assessing the situation once market started to turn. 

Situational Awareness will help you identify periods where your setup is likely to work well and then in that period you can do more trades or step on gas pedal and do more size. 

Situational Awareness will help you adjust your tactics .  This can be for example letting your swing trade run longer because it is start of a new bull move in market and that is likely to last 12 to 18 months or quickly taking profit because market is extended and vulnerable to correction . Having this kind of dynamic approach helps you to be nimble and avoid market traps.

If you want to be in the trading game for long tem and make millions then work on developing your Situational Awareness skills. 

In order to develop this key Situational Awareness skill you need to have some underlying market structure basis to base  your assessment on.  I develop my Situational Awareness daily based on underlying trends in breadth, daily analysis of large moves in markets and historical analysis of moves.

Do your own Situational Analysis for your kind of trading daily  and write just 4 to 5 lines everyday.

See if market is acting as per your Situational Analysis. Refine and refine your process over days or months till you are very confident in your own Situational Analysis skills

In few months you will develop confidence in your own judgement and Situational Awareness  will become integral part of your daily market thinking.

When you do that successfully it  will help you to make and keep money.

This Is the kind of higher order skill you need to develop if you are struggling trader or not satisfied with your results. There is more to trading than just picking stocks.

What is your Situational Awareness  for today?



How many trades do well known active traders make in a year

Posted on 1/01/2019

How many trades do well known active traders make in a year

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If you want to be successful trader you need to know answer to this question. That will help you set realistic expectations as to what it takes to be successful and make lots of money. 
Talk to real traders who do his for a living and you will understand true nature of the game. 

Brazilian stocks tend to make big moves

Brazilian Stocks list

Brazilian stocks historically produce some of the biggest winners in a year or in 6 month timeframes. This is a list of Brazilian stocks. I do monitor them separately. And also trade them actively. 
PAGS PBR SID GGB PBRA STNE VIV LND CPL TSU BSBR CZZ BBD BBDO FBR ESTR CIG EBR EBRB VALE ELP ARCE BAK AZUL ABEV ITUB UGP SBS SUZ CBD ERJ BRFS GOL NETS

If you want to make money trading focus on stocks that historically make explosive moves.

Chinese Stocks tend to be big movers

Chinese stocks historically produce some of the biggest winners in a year or in 6 month timeframes. This is a list of Chinese stocks culled . I do monitor them separately and trade them aggressively. 


CCRC HMI WB ATHM TAL OSN ZTO BZUN JOBS FANH MOMO YRD CMCM BIDU SINA NOAH YY HX YUMC ONE HTHT EDU DQ HLG BITA SHI HUYA SNP LEJU JMEI LX TME XYF CTK SSW GHG DL HPJ SOGO SKYS HGSH CNF PTR HOLI ATV JKS TOUR PT WUBA CTRP TAOP PLAG BRQS CIFS SVA SORL WEI TC ATAI XNET KGJI RETO JP VIPS UXIN NCTY REDU SPI BEDU CBPO QD NEWA XIN CGA NTES BSTI DOGZ ZNH CADC SFUN CYOU CHA GSH SEED FFHL ICLK VIOT KNDI HNP PME ZKIN SOHU FTFT IQ QFIN CO COE AMBO CPHI JRJC ACH HEBT JG JMU EVK SMI JT LLIT KANG CLPS TYHT CEA MOXC PPDF LKM WBAI MOGU TANH CBAT CXDC DXF DTSS FAMI UTSI BORN ITP FENG TEDU LYL CLDC YIN ABAC GURE PETZ QTT GDS GLG RYB CCIH NFEC FORK RCON BCAC RENN CJJD CANG NEW NIU FEDU LEDS SOL VNET LFC DSWL XRF BILI AGMH LITB CREG SECO JD CAAS EHIC CCM CNET STG WINS DNJR AIHS TMSR PDD SSLJ YI LOAC ZLAB DELT GSUM CCCL CNTF AMCN LAIX PHCF GLAC NIO

If you want to make money trading stocks , focus on stocks that historically have higher probability of making big moves.

A key component to successful trading is proper money and risk management

A key component to successful trading is proper money and risk management

Traders, in general, spend far too much time and effort trying to find magical systems or methodologies that produce high returns, rather than increasing their understanding of the markets and using astute money management to apply what they learn.
A key decision a trader need to make is frequency of trades and size o trade and stops on those trades.
One way to make money is by using larger stops , smaller position size and longer hold periods (trend following , buy and hold)
Another way is larger stops , larger position size and longer hold period ( shoot for the moon strategy advocated by some traders)
Third way is tight stop , medium to large position size and short holding periods. The momentum burst and anticipation strategy falls in that category. For that you have to be willing to do lot more trades.
I use fixed size of 1000 to 5000 shares based on price of stock. And stops around 400 dollars irrespective of price of stock. I move my stops to breakeven once in profit . And after that trail largely less aggressively in the beginning but very aggressively once I have over 1000 to 4000 dollars profit based on stock price. I do hundreds of trades in a year. 

The number one priority for my approach is to find a setup where stop can be very tight and that works instantly after entries. Magnitude moves is what I am interested in not in duration moves.