AGAIG: Supplemental Income Strategy Using One Trade Per Day With Charts For ThinkOrSwim

[csricksdds]

AGAIG: Supplemental Income Using One Trade Per Day​

mod note:

discussion continued from: https://usethinkscript.com/threads/agaig-tutorial-supplemental-income-using-one-trade-per-day.22356/

So, let’s discuss this type of trading. First of all, if a person has a cash account they can place this type of trade for less than $1,000 (a smaller account). They can also start trading one contract and then move up in contract number as success allows? I would point out, however, that we recommend any new (inexperienced) trader use only paper trades until they are comfortable with making trades.

Some traders are trying to manage multiple trades with frequently five, or more, trades in place at one time. Using only one trade per day is much easier to manage? Another issue frequently experienced is the phenomenon of making a profit in the morning and giving it away in the afternoon (I know that process very well)!

Consistently placing one trade each day (preferably a morning trade that is closed before noon) is easier to learn how to defend and manage risk, if necessary to do so. If, and when, a single trade starts to move against me I will frequently turn it into a spread to help contain the erosion and give more time for it to work itself out.

As pointed out previously, I am using my AGAIG Charting to place these trades. My charts are geared to help me visually determine direction and entry points. As with all trades getting DIRECTION right is very important and this is where my indicators come into play. I like to have at least two indicators in agreement suggesting a change in direction. For these trades I will usually place a trade when I get both a SHORT BUBBLE and RED VERTICAL HISTOGRAM, or a LONG BUBBLE and GREEN VERTICAL HISTOGRAM indicating a potential change in direction before placing a trade.

My suggestion is to start with two contracts if you have a small brokerage account, keep your profit expectations reasonable, and maybe use a GTC for closing the positions. I place my trades ATM (At-The-Money) and look for movement based on what the stock usually moves intraday. I find that most of the stocks I use will move 1-2 points, or more, once a new direction has taken place.

My suggestion is to start with a $2,500 account, trade two contracts for each trade, move to three contracts when you get above $3,000, four when above $4,000, and so forth up the line. Be careful and manage trades to stay above your $2,000 trading level.

When analyzing my chart these are some of the things I look at:

• Is current price above or below the VWAP and will a change in direction move it back towards that Volume Weighted Average Price?
• How did the stock and market open? Did it immediately move up in price? If so, are there wicks extending above where Bulls have tried to raise price higher but were unsuccessful and where it still needs to establish an Opening Range Lower Price?
• What is the overall market doing? Is the overall trend moving up, down, or sideways. Is there a Doji Candle showing “indecision” (a small candle body with wicks protruding both ways).
• Are we moving above, within, or below the ORB.
• Have my Murrey Math Pivots been established? Is movement taking place above/below or at the 20 EMA line.
• What does movement on the lower True Momentum Oscillator suggest for direction?
• What are my TREND LABELS and CAUTION LIGHT suggesting.
• Looking at the labels above how is this stock acting in relation to the MAG 7, QQQ and SPY.

These are questions easily available VISUALLY on my charts, and trades can be placed when you feel comfortable with what you see. You should get to the place where you have an overall impression of what is taking place with little more than a glance?

You will notice that I have two trend Labels on the lower left and lower right of the chart. They are not always in agreement as they are looking at trend from different perspectives. When both suggest the same trend is worth noting.

I am posting one of my dual charts for you to view and use if you so choose. For these one-per-day trades I am using a five-minute chart, but a ten-minute (or other) will work as well. In this chart I am using COIN and MSTR which are two of my favorite Day-Trading stocks. I always trade them using at least 2-3 days until expiration and later in the week will use next week’s expirations.

You might want to give this lower stress type of trading a try?

Dual Chart Link: http://tos.mx/!wJOxPxVj

Chart Look:

https://imgur.com/a/yaxrM9f

Feedback is always appreciated.

Happy trading!