Just moved my February from red to green, and I’m stoked! Earlier in the month (See prior reviews) I had made several day trades that ended bad, and then ran out of day trades in Robinhood and thus wasn’t able to get out of a stock when it started to move directions. My strategy for this week has been simple:
- Focus on 3% a day, not huge gains
- Sell fast and take profit
- Just play overnight momentum stock
- No ETFs, no day trading
I need to do a post on my 3% strategy, but basically my problem in the past has been wanting to take huge amounts of profits on every trade… even if that wasn’t my strategy initially, or my stated strategy on the stock. What happens is I would get in a stock that was moving up, and I already knew where resistance was on the stock, and I would hold through known resistance levels watching it go up hoping it would keep doing it. Inevitably, the stock would bounce hard off a resistance line and violently shoot down before I could capture much if any profit.
Then I did some math, and put paper to my goals. I’ll write them out fully in a post soon but essentially I just need 3% of gains per day, not including weekends, to be financially free in six months starting with a $1000 account. So it’s a six month plan, and after seeing what can happen by just getting 3% total per day (and reinvesting my gains) has changed my attitude about each stock, and made me just happy with a 2-5% gain. It doesn’t have the wow or excitement that 12% or 20% does, but in the end it is better.
That doesn’t mean I robotic-like set my sell at 3% gain in a stock and that’s that. I thought about that. But knowing the stock’s resistance levels, I’m out fast. If it bounces off resistance I’m done, sold. Usually, that’s just the first entry point for many day traders so I know there will be buyers there. They buy the first pull back and sell into the second. But I’m not waiting for the bullish pullback signs and buying into the move up, I’m selling where everyone else is buying. This does two things, 1) it allows me to sell fast (I’ve sold most my stocks this week in the first five minutes of market open) and 2) it increases my odds of having a winning trade. A stock can very quickly go down, if it’s moving down in the first five minutes I sell. It might go up later, I’m just increasing my odds by selling fast. The stock may go way up after I sell (and some have) but no one actually knows that, so I just increase my odds if I sell into the first pop when everyone else is trying to buy it.
Plus, I have to work for a living, so it puts my total trade time in the morning at about ten minutes and ten minutes in the afternoon. Not bad.
The stocks I’m playing are overnight momentum plays. What that means is the stock is already up for the day and it’s also ending the day strong. So it has a lot of momentum going into the 4 o’clock close. I buy in the last 5-10 minutes before close, watching the volume to see which has the most momentum. The idea is that momentum will continue into open the next day. Even if the stock is down the next day, these plays usually open green in the first five minutes when I’m selling. And so far this week, they all have… so that’s a whole week of green!
I put these stocks in my watchlist in TC2000 which is updated live on the right side of this blog, by the way, in case you ever want to see them. I do not post which ones I am taking position in.
Right now I have two accounts: one in Robinhood, and the other in Ustocktrade. Ustocktrade is where I have moved my main trading to and is the account that is the $1000 account I will grow. Basically, that has started this week so this is my first full week with my $1000 trading account in Ustocktrade (even though Monday the markets were closed and Tuesday I only traded with $750 since the other $250 wasn’t transferred yet). So I’ll try and start making daily posts on my $1000 account challenge… that kind of has a nice ring to it… My Robinhood account is money that I am saving for something so it won’t be in there forever. Oddly enough, I’m being the most careful with it (because I will have to pay it out soon) and I’ve gotten the highest return on that money. That is partly because some of the stocks I wanted to buy I couldn’t get in on Ustocktrade so I could only trade them in Robinhood (like AKER).
Here’s my trades this week:
The net profit amount is for the overall month of February, and it started out at -$245.99 for the week and I’m including my fee for TC2000 in my net profit. So to now be $98.93 in the green, means I’m up $390.90 for the week with only four days of trading!
In my $1000 challenge account I’m up $152.90 for the week, or 15.3%. That puts me over my 3% a day goal, so I’m on track! I had about the same percentage gains in my Robinhood account despite one less trading day.
Think about it… If I had $10,000 in my account, that would be $1,529.00 for the week or $79,508 a year and only trading four days a week….
If I reinvest all my earnings for six months, it compounds to over $200,000.
All of the trades above are overnight momentum holds so they’re pretty basic. This tactic has worked 100% of the time for me this week so it is the one I will continue to use. I had several misses with it the week prior but the losses were extremely small since I’m selling so fast, so I don’t expect a win 100% of the time but this was a good week. I won’t day trade stocks until I am more confident about what I’m doing and I have time during the day to do it. And, probably not until I can open an account with someone like Speedtrade or Interactive Brokers so I can use hotkeys. I’m not there yet.
Well that’s a wrap for the week. Did you trade any of the same stocks? Let me know in the comments!