Need Help With Trading Strategy

J

jhatch

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Hi all,

To make this quick, I have only been trading live now for about 2 months. At first I had wild success (with a good amount of luck) and ended up tripling my money the first month. Soon after I had a big red week and ever since then my trading has been off balance.
Over the past few days I've realized I have had a lot of hesitation when it comes to pulling the trigger and I believe that may be caused by what time frames / indicators I am using.

Time frames used: 1min & 3min
indicators used: EMA's (9, 20, 50) / RSI / MACD / TTM Squeeze

I appreciate yall's time and any help yall can provide. Thanks
 
BenTen

BenTen

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It would help if you can tell us how you're using the indicators you have listed. Provide some charts of potential entry and exit points, as well. That way, we understand your trading strategy and help you improve it.
 
J

jhatch

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Sure no problem,

In theory, a long entry point on a shorter term chart (1-3Min) would be when the price action begins to clear the 9 EMA with strength and the exit point being when the price action begins to fall through the 9 EMA. Of course the criteria for going short would be flipped. On a 3min chart theoretically I would hold a long position if it continues to stay above the 20EMA.

As far as RSI, I look to see if the stock is either overbought or oversold and if it is heavily in one or the other 9 times out of 10 I won't take a position. i.e. will not go long if the price is overbought.

For MACD / TTM squeeze I use these to see if the current momentum trend is weakening/reversing.
Links
https://tos.mx/jCdOar5
http://tos.mx/e0n4ukW

When I look through charts from past times my strategy seems effective during the first half hour or so of the market. The problem I'm having is catching the move when it starts to happen and buying either calls or puts at an effective fill price simultaneously and still having profit left on the table.
 
BenTen

BenTen

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@jhatch Thanks for that. You said you tripled your money in the first month of trading. I assume that's mostly due to luck, like you mentioned above? Can you show us what worked and what didn't work for you? Where exactly do you need help with?

Show us some chart examples where you had hesitation in entering. Why did you hesitate? Personally, I learn best by analyzing my trades (winners and losers).
 
J

jhatch

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@BenTen
I would say some luck, I overall just had a real simple approach I guess. Such as if a stock tanked with no negative catalyst and hit heavily oversold I would buy a call and most of the time the stock went back up by a good amount. Additionally during the first month I had very few trades, so thats also a factor.

Today I had some good success on SHOP and ROKU getting a 40% return. I found that using a larger time frame helped keep me confident throughout the trade and I also found the "Market Mover" indicator useful today, the one with the 5 SMA on the RSI chart. A problem I continue to have that seems somewhat rudimentary is finding critical levels of support/resistance for various stocks, when I have had certain levels it made trading much easier. The main struggle with this is I simply do not know what time frame is best to find these levels.

On the market mover indicator, it is my understanding that there is one that I can purchase? If so, I would like to do that if you could provide how to do so. The only complaint I have with the 5 SMA version is that if I move around the graph the "entry / exit" points change. So hopefully the paid version is more consistent.

I'll have to dig some charts up where I lost. Most recent loss was today with a Put option on NFLX I bought yesterday afternoon, I listened to someone I shouldn't but I was able to cut losses quick.

In summary, my problems are: what time frame to find critical support/Resistance / knowing when to let a trade keep running (not panic selling) / and possibly some input on a few indicators that would help me and on which time frames they are effective.

I appreciate you taking the time.
 
BenTen

BenTen

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@jhatch Glad you're learning from your trades.

Support/Resistance: Just know the higher the timeframe the bigger the move. I draw my support and resistance, starting on the hourly chart to the 5m chart. I would start with the hourly chart first. It gives you the bigger picture (you can even start with the daily). I would also recommend drawing trend lines and S/R on the 5m chart. It helps to identify entry and exit points.

Market mover: The paid version is not available at the moment (I'm working on a major update for it). For now, you can use this one, which solves the scaling issue.
 
H

horserider

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@jhatch Look at Ultimate RSI. Short term setting will match the Market Mover and without the MM scaling problems.


Also can consider MTF RSI also. https://usethinkscript.com/threads/multiple-time-frame-rsi-indicator-for-thinkorswim.616/

Support/resistance, https://usethinkscript.com/threads/support-resistance-zones-for-thinkorswim.572/
 
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horserider

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Another alternative to MM would be Ultimate MACD
 
J

jhatch

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@BenTen
Oh wow that is much better thank you very much!

Ok will do. As far as choosing points, I have read in a couple of places for a level to be support or resistance the stock must respect that level on the given time frame at least twice? Is this valid or just nonsense?
 
J

jhatch

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@horserider
Awesome thank you for sending those my way I will definitely take a look. Could you elaborate a tad more on how to use that support/resistance indicator?

Thank you for your time
 
BenTen

BenTen

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@jhatch It depends on the trader. Some waits for the second touch while others will wait for the third one. There are several videos on S/R on YouTube. Highly recommend you watch some of the videos on their regarding this topic.
 
H

horserider

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@jhatch Just will mark s/r highs and lows and put an ATR multiple around those points. A higher n input will look back farther and find stronger areas of s/r
 
J

jhatch

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@horserider

Wow ok so I just put the Supp/Res Indicator you provided on my SHOP chart and using that I could've played the upside and downside of SHOP today for huge gains!

@BenTen
Yea as bad as it sounds, I pretty much self taught myself on trading through youtube for 3 or so months before live trading. The only problem with some of those videos is that make it seems so clear cut and simple compared to when I pull up a chart and its often difficult for me to find those critical levels. However, I will keep trying to get better no doubt!
 

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