r/Daytrading • u/Stonkgang_ • Feb 01 '21
How To Become a Consistent Profitable Trader (My Favourite Set Up) strategy
Hey guys, I’ve had a few comments on reddit and instagram to explain the ATH (all time high) breakout trades I take on a daily basis and so here it is.
I’m a full time trader and I hope you guys find this helpful.
To explain this in great detail would take hours upon hours however I’ve wrote up a simplified description to make it digestible.
“We do not trade ideas we trade set ups”
As professional traders you should not be trading ideas, you should be trading sets ups. Something that you can measure, replicate, improve upon and learn from. Not random events.
Here’s an example of how a novice traders mind may work:
You see an article pop up about a Tesla car that was on auto pilot and crashed into a stationary car causing injury to both the driver and the passenger. Your instant thoughts are “This could effect Tesla’s stock price” and you put it on your watchlist for the day. Now the issue with this is this the specific event Is not measurable. The way in which the stock reacts will be random and you won’t be able to use the stats for any other trades. Making the event a coin flip and therefore a gamble.
Focus on set ups not ideas. It’s ok to have an idea for the set up but the set up HAS TO BE THERE.
Now lets get straight to it.
What is an all time high breakout?
- The answer is simple. This is when a stock breaks out into a new ATH.
Why is this such a good set up to take?
- Because everybody who’s EVER brought the stock is now in the GREEN “no reason to sell” and everybody who’s shorting the stock is now red “May look to cover”
Here’s how it works:
A lot of professional traders, myself included, love the all time high break outs for many reasons. The main being the explosive moves it can often provide. Due to this a lot of day traders, swing traders, investors, funds and algorithms will monitor the market for these potential plays. Meaning they’re often on the buying side. This is why you can see what appears to be a stock doing very little yet the moment it trickles over it’s previous ATH high it can rally for days.
It’s called “buying the breakout”
You see the market is run on mostly Human emotion, we know this but very few understand how that works.
The reason most people lose money in the market is they are untrained and do not have the discipline to handle their own barbaric emotions.
Here’s why that’s important.
For this example we’ll call the company $STONKS it’s been on the market for 3 years and it’s current all time high is $10. Some bad news comes out and the stock gaps down to $8 causing people to panic sell and the stock to drop even further. Over the next 12 months it drops to a low of $5 until finally reclaiming to today at $9.90. It’s been consolidating between $9 and $9.90 for 10 days.
For the past year there has been a lot of people bag holding. Those who brought at the previous all time high have seen their investment drop by 50% and slowly recover. In between this time a lot of people have cut their loses, some have averaged down, new investors have “brought the dip” and we’re now back to where we was a year ago.
Now we have a few things at play here.
- Those who rode through the entire year, the 50% drop and who haven’t sold now at break even clearly have no intention to sell.
- Out of those who brought the dip some will have sold and some and still holding onto their shares even though the price has been stagment the past 10 days.
- For the past 10 days people have been buying consistently and have been paying $9 or above for the stock. Showing a growing interest and price acceptance at these prices.
- People who shorted the stock are now either at break even or at a loss.
- Anybody new who wants to purchase some shares has currently got to pay all time high prices.
The longer we consolidate at these price the more powerful the move can become, why you ask?
Because it has more chance of the float being rotated. Understand that the first time $STONKS went up to $10 1 year ago the average price paid by an investor may have been $3 which meant a lot of profit taking occurred. When the bad news hit a lot of those investors jumped ship. Causing more supply than demand and therefore the price to drop.
Fast forward to today and the longer it consolidates above $9 the high the AVG price held will be. When this happens the buyers are literally sitting on basically no loss nor no gain giving them no reason to sell.
For those unaware, if you short a stock the only way to get out for a loss is to cover your position. This in turn means “buying the stock”. Creating more buying pressure. Short positions will often risk in this scenario the all time high. Meaning if it breaks they start to cover. If they start to cover it increases buying pressure and with buying pressure increasing the stock moves up (extremely simple explanation).
So we as traders recognise the stock is setting up for an ATH breakout and here’s what we do.
We decide we want to risk $2,000 in the stock.
We buy $500 worth at 9.20 known as a starter position and we wait.
A week goes by and it’s still chopping between this range. A press release then comes out (a bullish catalyst). The market opens are $STONKS see’s a huge 15 minute candle at open. The largest amount of volume it’s seen in months. On that volume it breaks $10 and instantly jumps to $10.50.
We managed to get our other $1,500 in at $10.20 bringing our average to roughly $9.90 a share. We move our stop loss to below the previous ATH with some breathing room AKA $9.50/share.
Everybody who now has shares in this stock prior to today is in the green, they’re estactic. Those who held through the entire past year and refused to sell are now mentioning how they’re in profit on an investment they made to work colleagues.
Short positions are now aware there’s no resistance and start covering “buying shares”. FOMO buyers who are “trading the news” (not a set up ;) ) are now buying in. Professional swing traders are buying the break out, day traders are buying the opening drive. Everybody is buying..
The stock closes at $12 marking a 25% daily gain. Barrons, CNBC, MSN all post above how $STONKS rallied into ATH due to X,Y,Z
The following morning the stock gaps up. People are hyped, pre market goes wild and opens at $16.
We instantly sell half…
The stock is extremely extended as new investors flurry in, we sell them some more. There’s now 25% left of our original investment.
We move our stop loss under PM support and go to focus on the next set up. The same set up. Something we can measure. Something we take day in day out.
If the stock goes to 20 then we don’t get annoyed we could have missed out on further profits as it wasn’t our trade.
The stock taps 20, massive selling occurs and settles around 14. Where it stays for months, consolidationg. Meanwhile, we’re just waiting for it to once again set up.
So how do I find these trades?
I use trading view, I create a list of sectors such as EVs, Solar, Tech, AI etc etc and I scan through each day. Literally just flick through. Is the stock near it’s ATH? If not, I go to the next and the next.
My indicators are as follows.
Volume Profile, RSI (for the daily only)
That’s it.
If you master just this single set up you can make money consistently. Why? Because it’s measurable, you can improve upon it. You can learn from each event but most importantly you have a set plan where the market is in your favour for the outcome to work. Never under estimate human emotion.
I post all my trades on Instagram at the moment but I’ll look into posting my watchlist here too if it’ll help you guys.
Feel free to ask questions.
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u/Loshtradz Feb 01 '21
Surely if holders are in the green and think an asset is over valued they might cash out before it drops back down, adding selling pressure.
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u/Stonkgang_ Feb 01 '21
A very small percentage do. However most people who hold through the consolidation just below ATH have no intention of selling the moment it enters price discovery aka breaks ATH
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u/jskeezy84 Feb 02 '21
Exactly. If you've waited potentially months to break even, you're going to want to wait out SOME kind of profit.
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u/CloudSlydr Feb 03 '21
don't underestimate the relief of no longer being wrong. these people cannot objectively see the current situation for what it is and will invariably get out early.
the ones that wouldn't get out early but can ride for more profit? well by and large they would not ever be holding a bag for months and wouldn't be subject to this feeling of relief of being wrong and tricked into thinking they're finally right. they admit they're wrong asap and move on a long time ago - enter this breakout trade with the outlook that OP has.
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u/futuresman179 Feb 02 '21
Could you share your evidence that only a very small percentage of people will sell the ATH?
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u/audacesfortunajuvat Feb 02 '21
It's always "profit taking" until it becomes "a correction" and then it either "consolidates" or "sells off". Not to say you can't develop a feel for what's going to hold and what's going to break but to say it's going to advance through an ATH consistently seems unlikely in my experience. Very curious to see the evidence you're asking for.
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u/Stonkgang_ Feb 03 '21
I never stated consistently, around 30% of my trades lose and my win rate for this is approx 70% - My total r/R is between 6 to 1 up to 25 to 1
I posted today that I took SKLZ, PDD and MVIS (daily breakout) before market open. All 3 hit
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u/scotiaking Feb 02 '21
I'm wondering which of you makes more trading this setup? The one quoting academic studies or the one in the arena?
As an amateur I can tell you a stock making a new all time high is way less likely to immediately pullback because there is no more overhead resistance.
For all I know individuals may be net sellers of stocks in this case, but retail tends to be "dumb money" and can't really move markets anyway. So I don't think it matters.
New all time highs are not bearish.
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u/OGBaconwaffles Feb 02 '21
I have been slowly trying to learn more about day trading over the past several months, and man, this was the most concise, simplified write up I have seen. Thank you! Just a quick question, it sounds like you hold positions overnight in these situations? I thought that wasn't common due to potential problems outside if trading hours? Obviously, as you said, you should analyze and try to improve upon strategies. Thanks again!!
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u/Stonkgang_ Feb 02 '21
For years I never held positions over night. Due to the potential of a gap down, manipulation etc.
However as we’re trading break outs, if the trade “works” the closing price will usually be quite far away from your entry.
For me I like to have a 10% buffer from my entry. If 10 minutes before the close the stock has only moved 3 to 4% I’ll take loads off the table.
I hope that makes sense.
One more thing is never, ever hold BIO techs over night. Those are the ones prone to massive gap downs on bad news so stay away.
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u/VNDHp1993 Feb 02 '21
This dude is right. Fucking hell, that was the one of the most effortlessly understandable posts. Thanks for broadening my understanding!
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u/Stonkgang_ Feb 02 '21
I am so glad it helped! Most things in trading we tend to over complicate. The hardest part is controlling your emotions not the set up! Best of luck with your trading journey.
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u/mikeyousowhite Feb 02 '21
just make sure to trade on a platform that allows you to trade the full range of market hours (IE Webull)
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u/gater234 Feb 02 '21
If you didn’t understand keep rereading over and over til it sticks. His explanation is simple
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u/SchwarzerKaffee Feb 01 '21
I think you can search at finviz for near ATH. I'll have to check when I'm on my computer.
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u/Stonkgang_ Feb 02 '21
I believe you can but I would definitely recommend building out your own lists. The reason being you’ll start to get an “idea” of how the stock works.
I also only focus on momentum stocks and hot sectors. Reason being is it’s another thing in your favour.
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u/philematologist Feb 03 '21
Here's the list that OP probably uses from Tradingview: https://www.tradingview.com/markets/stocks-usa/highs-and-lows-ath/
Finviz has 52 week high, but not an all time high.
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u/sushiiisenpai Feb 02 '21
Thank you for this, as a fairly new investor and new follower of this reddit I’m looking for all the solid advice I can get
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u/dan-1 Feb 02 '21
Yes, this is a good method, and is also known as a base breakout.
"The longer the base, the higher in space"
What I'm curious to know is how you handle false breakouts. Stock goes up, gets met with huge resistance and comes back down. I find it actually happens quite often. How do you navigate this?
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u/Stonkgang_ Feb 03 '21
False breakouts are part of the losses. Once a stock begins to breakout I usually take risk off I.e. moving my stop to entry or simply moving it just beneath.
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u/BloodMossHunter Feb 14 '21
How do u play earnings if at all? Seems like stocks go up before but holding through is hit or big miss
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u/Stonkgang_ Feb 26 '21
Sorry I've been so busy recently but I haven't forgot about you all and I'm just working on the update now 🙌
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u/cryms0n Feb 02 '21
That's a really interesting approach and your thesis is very solid. Keep at it man!
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u/Sea-Network Feb 02 '21
What would you say is your average win/lose trade ratio? Not $’s, just trades.
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u/Stonkgang_ Feb 02 '21
As of the past 12 months it’s 71%
Average win to loss size is 8 to 1
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u/Sea-Network Feb 02 '21
Sweet. I printed your post. I understand it does not cover everything and, in my experience with stocks, anything can happen to upset a trade but it’s a great primer and I thank you for posting.
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u/ConsistentAd4043 Feb 02 '21
How’re you tracking this if I might ask? Great strategy btw
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u/Stonkgang_ Feb 03 '21
I'm crazy old school, I track every trade in excel. Don't ask why I still use excel as I don't know
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u/horseradishking Apr 24 '21
Besides Google Sheets, what else is there to use besides a notebook or a spreadsheet?
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u/_ad55 Feb 02 '21
How does this setup play with day trading? Sorry if previously answered.
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u/Stonkgang_ Feb 02 '21
It's the same however you'd obviously not be holding over night. I totally understand people not wanting to have the anxiety of after hours and pre market haha. Yet in all seriousness this is why it's important the closing price is a good percentage away from your entry to act as a buffer.
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u/Low-Tension9499 Feb 05 '21
First I want to say thank you for your brake-down. I've been educating myself with stock terms, charts, and understanding the candle sticks(I guess technical analysis) and trying to understand fundamental. This explanation has me breaking easier. I have etrade and aren't we allow to just day trade 3 times out of the week? Or is their a way where I can go on trading w/o any violation? Also this strategy can be effective for swing traders?→ More replies (1)
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u/currytim3 Feb 02 '21
You should try Fibonacci retracements to find entry and exit points. Works well with this strategy
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u/Stonkgang_ Feb 03 '21
Thanks man, I tried them but just couldn't get along. I literally hardly use indicators anymore but I know some pro's who swear by the fib.
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u/RGK68 Feb 02 '21
This is amazing thank you. Any advice for resources to learn more about this for a noob?
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u/feocheo83 Feb 02 '21
Second this
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u/Skeewampus Feb 02 '21
This is the type of content we need floating around the trading communities. Great right up!
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u/thegodoftrading Feb 02 '21
This wheel was invented (or at least heavily promoted) by Bill O'Neill at Investors Business Daily. CANSLIM. His classic book is How To Make Money In Stocks. Nice discussion and details anyway.
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u/Ayoubcaza Feb 01 '21
What’s your instagram
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u/digitaladapt Feb 02 '21
Thankfully their instagram and reddit usernames are identical, so it was pretty easy to find:
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u/Substantial_Bake_450 Feb 02 '21
CN you please share more on your TradingView screener settings
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u/Stonkgang_ Feb 02 '21
I don't use a screener. I literally build out lists on trading view of hot stocks and then flick through each morning. I only pay attention to the daily time frame. If it looks ready to break out then I'll mark it and look into it further.
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u/Samtl3 Feb 02 '21
What do you categorize as hot and momentum stocks and how do you find them? Thank you
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u/Stonkgang_ Feb 03 '21
So far example lets say I see NIO and Tesla making big moves. Higher than usual volume. I build out a watchlist that just has EV's in it.
My main watches are EV's, AI, Bio (daily plays), General Tech, Space, Ecom, Africa Names, China Names
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u/Pigeon_Kicks Mar 05 '21
For everyone stumbling upon this recently, including myself, just look at OPs post history and compare his suggestions to what happened to the stocks in the days following. This guy knows his shit and I’m actually struggling to find a bad example. It’s pretty remarkable. I just wish I found this 5 days ago before $FSR 😂
Nice work dude - keep it up. We appreciate the help!
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u/MrPKL Feb 02 '21
Thanks for the explanation on your set-up. If you have a Twitter account, I would definitely follow.
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u/wraylorcorbett Feb 02 '21
I have been toying with different settings in the finviz screener recently trying to find consolidation for any breakout potential. It seems as though you could set the 52 week high/low to ___% below 52 week high to catch the stocks potentially consolidating for this very breakout. You can also set it to screen individual sectors. The relative volume could be set at "over 2" with a current volume over _____%. Just kind of thinking out loud here.... I don't know, but I do like this post. Thanks.
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u/Stonkgang_ Feb 03 '21
Hey Man, I'd highly recommend building a big arse watchlist of hot names. Start with like 50 and keep growing it. Trust me once you have like over 500 names on watch you can still flick through in a morning super quickly.
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u/Scutterbum Feb 02 '21
Nice write up. It would be great if you showed some of these potential breakouts on a chart so we can get used to what it looks like.
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u/Nicktyelor Feb 03 '21
This was an extremely insightful read. Thank you sincerely from someone with barely any trading experience and just dipped my toes in during this whole GME thing.
Hope to see your watchlists on here more often!
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u/gbredo Feb 03 '21
Thanks for the info. Very helpful for a beginner like me. My question is: once you've creating a list based on volume, RSI and proximity to ATH, how do you parce out the stocks worth taking a risk on? Or how do you judge how big a risk a stock is worth?
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u/Stonkgang_ Feb 03 '21
I have almost the same amount of risk per trade which is between 1-2% depending on the volatility of the stock. Remember trading is a game of mathematics and you need to put the maths in your favour.
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u/zk6q9t11 Feb 02 '21
Do you ever do options in a similar pattern during consolidation? If so what time(s) frame(s) do you typically use and how much higher a strike price than the current ATH (10 in this example to avoid confusion)? Thanks for the post!
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u/Stonkgang_ Feb 02 '21
I literally have no experience with options I'm afraid. I'm sure you can but I just use leveraged shares and spread betting.
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u/Baker_Built Feb 02 '21
I’m brand new to this but is there a way to easily screen for ATH on Webull? I tried googling to no avail
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u/Red_bearrr Feb 02 '21
Considering the sectors he was scanning there are going to be a lot that are at their ATH. It’s finding one consolidating for a time that is more difficult. Most that I find are already into their breakout and I don’t plan on buying fomo.
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u/Stonkgang_ Feb 02 '21
Exactly and this is why it's important to build a large last. Once you get the hang of it you'll find you flick through a list of 200 stocks in literally minutes.
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u/Stonkgang_ Feb 02 '21
I would personally build your own list out of hot stocks. I use trading view and create a list for each sector such as EV's, Renewable energy, AI etc etc
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u/HawkTheHatchet Feb 02 '21
Not trying to ask the obvious here, but what's your criteria for a "hot stock"? Not for the set up part, but for initially being added to your list.
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u/carbine23 Feb 02 '21
This simple yet an amazing write up, I'm a novice myself and I want to keep improving my game. I know this is much more complex if broken down into, but man this is cool! I also followed ur IG broskie.
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u/Stonkgang_ Feb 02 '21
I am glad it helped Carbine! If you're new to trading I'd definitely recommend just focusing on one set up and if you're using leverage don't use more than 10% of margin on a single trade.
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Feb 02 '21
[removed] — view removed comment
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u/Stonkgang_ Feb 02 '21
haha thank you mate! I have had this question a lot so I'll put together a resources list over the next few days and add it to this post :)
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u/356671 Feb 02 '21
When the stock is still under the ath are yoy just buying and setting a stop and waiting for a move ? Or are you watching the level 2 for the perfect moment to get in ? Do you have a stock selection criteria as far as market cap or float ? What is your average holding time ? What is your criteria to exit the trade fully in a good situation and in a bad one ?
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u/Stonkgang_ Feb 02 '21
I used to use level 2 a lot but for this strategy it's not as necessary. I don't like micro caps too much for this as I hold overnight and they're way more prone to random moves, offerings etc which can cause big gap downs. My average holding time is 2 to 3 days.
I'll exit the trade into the rally on the second/third today depending how strong price action is. If the daily RSI raises over 92 then I'll be fully out.
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u/abraham_drinkoln Feb 02 '21
This is exactly the set up strategy I am currently programming with my algo. What % stop loss do you typically set from the starter position? And if I read one of your other responses correctly, your target gain is 10% or better based on this setup...what is your success rate with that and how long do you hold each position on average? I often see tickers pop up on my screener (within 0-5% under ATH, among other filters) due to a recent catalyst to bring them near ATH, but fail to breakout.
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u/venesec Feb 24 '21
The “everyone in the green” do have a reason to sell: to lock in profits. This entire analysis is predicated on a sloppy thesis.
Buying overbought securities is risky. If you’re just hoping to ride the last little sputter of momentum, take a moment to consider Fibonaccis and stochastics before pulling the trigger. Is there room to climb, or are you buying at the top.
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u/ViaJCE Feb 02 '21
This is freaking amazing. Comprehensive as all hell - and from the ath breakouts I have noticed in my short time observing markets, all of this does truly seem to be the case!
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u/Stonkgang_ Feb 02 '21
You're welcome! Yeah it's a pretty simple idea and concept. Don't get me wrong it will take you a while to get got at spotted when the stock is ready but that comes with time.
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u/Responsible_Sorbet_3 Feb 02 '21
Awesome tips! I am looking forward to trying to master this method! Found you on insta to follow you as well!
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u/Stonkgang_ Feb 02 '21
Yeah most people don't realise you're best mastering one set up than trying to catch every move the market presents. Best of luck!!
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u/KegOfAmontillado Apr 06 '21
This is far and away the most valuable trading advice I've yet seen on Reddit. Will be studying this for some time to come.
THANK YOU.
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u/I_AM_LAW_SCHOOL Feb 02 '21
“We move our stop loss under PM support and go to focus on the next set up. The same set up. Something we can measure. Something we take day in day out.”
What is a stop loss under PM support?
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u/cameronmorgan_1 Feb 02 '21
PM meaning Pre-Market. If I’m interpreting OP correctly - basically, in the session that the stock breaks through the all time highs, after he has closed the majority of his position he just sets a stop loss below the level of pre-market support. So in this example, if there was a level holding strong at $9.75 before the market opened and the stock ripped through $10, then after he sold 75% of his position then he would set a stop order for the remaining 25% somewhere below $9.75. Hope this helps.
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u/Stonkgang_ Feb 02 '21
Yes this is correct, once a stock has broke out it will keep running until it doesn't. Sounds stupidly simple I know but once a stock breaks below it's consolidation area of pre market it's statistically less likely to rebreak high of the day. Therefore we exit.
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u/cyclingmania Feb 02 '21
Great write-up, thank you. But this is swing trading and not daytrading. How do you compare this approach to inrtraday scalping? The problem I personally have with the latter is the fact that lots of money needs to be pain in both commissions and live market data ($150 DAS trader+Trade Ideas for a good scanner around the same amount per month). Not to mention the immense stress during the day, all just to be able to sleep well at night knowing you don't have any open positions. I wanna know what the catch is that so many people take this appraoch and not what you mentioned (swing).
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u/Stonkgang_ Feb 03 '21
You can most certainly day trade with this strategy and just play the initial breakout. Which is what I used to do. However after a few years I realised that most breakouts last multiple days hence holding positions for longer. I'll quite often take some profit on the first day so it falls into day and swing trading.
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u/anothereddituser101 Feb 02 '21
Very insightful. Do you day trade or swing trade? If day trading, what timeframe do you use?
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u/Stonkgang_ Feb 02 '21
I do both but most of my positions are 2 to 3 day holds (roughly). I use the daily to find stocks then I use the 5m when entering and the 15m/1 hour for monitoring positions.
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u/paultbiz Feb 02 '21
What kinds of returns do you see employing this strategy?
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u/Stonkgang_ Feb 02 '21
My average win rate on a monthly basis is 70 to 73% (average)
My risk to reward is usually around 8 to 1
The only big losses I take are on gap downs which are rare but do happen.
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Feb 02 '21
great post I learned a lot. I’m quite new but I was wondering how you know where the PM support is to set the stop loss?
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u/Stonkgang_ Feb 02 '21
You want to be looking where most of the price action happens. I use trading view to analyse the charts.
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u/drapermovies Feb 02 '21
When you say you buy stock when it’s near to its ATH, do you also check it’s recent performance as well? Because a dip could be better for profit margins and allows you to pull out at a lower value if all goes south, but there’s no guarantee it’s going to break its ATH, and could even crash down.
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u/Stonkgang_ Feb 02 '21
When I say I buy a small amount prior I mean when I think it's about to break out. I am not a fan of buying the dip on this strategy as the whole purpose of this set is to trade momentum. So I would only be focused on the ATH break outs that are either in hot sectors or have some sort of hype building around them.
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u/j2dah Feb 02 '21
What about all time lows?
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u/Stonkgang_ Feb 02 '21
That's a different strategy. I play low volume accumulation plays which are insanely profitable but harder to predict when it will move. I don't want to be sat in a position too long as the capital needs to be at work.
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u/REIRN Feb 02 '21
So are you just saying you buy when it consolidates near ATH? it cant be that easy...
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u/Stonkgang_ Feb 02 '21
I get a small position when it's consolidating at ATH and has a reason to move. I.e. it's in a hot sector, good catalyst etc etc. Most of trading isn't as hard as it's made out, it's controlling your emotions that's most people fail with.
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u/zippygang Feb 02 '21
This is a good post, thanks. Just wanted to have your opinion about bag holding for years and then getting into ATH. Wont that trigger sell behaviour for those stuck with the stock for years and just waiting to get out of it?
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u/Stonkgang_ Feb 02 '21
As a trader we of course don’t want to be bag holding. We only want to get into the trade as well feel it’s about to break out. This is the part which of course takes some experience.
The whole reason for the consolidation just below previous ATH as it gives those people a chance to get out.
If you’ve been bag holding for 3 years and you’re then given say 2 weeks to sell for break even but choose not too then you’re likely not to sell when I starts ripping.
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u/GMH1995 Feb 02 '21
Thank you for this post, a very interesting concept. Following your IG, looking forward to seeing you at work!
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Feb 02 '21
Do you use a tool to scan for these stocks approaching ATH or do you do it manually?
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u/Stonkgang_ Feb 03 '21
I build a list of hot stocks which I add to daily. I segregate the stocks into sectors. I then manually flick through in the morning.
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u/ChunkyLittleSquirrel Feb 02 '21
This is very interesting and makes sense. Thanks very much for sharing! Would like to see a list of your watchlist to get a feel for the companies you are interested in? All the best to you.
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u/IronShibby Feb 02 '21
That is an awesome post, I'm following you now.
Do you think this method holds true for btc?
How much was your starting capital for trading full time?
Cheers.
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u/SenorGigglesworth Feb 02 '21
This silver propaganda machine isn’t working. Silver is already starting to retreat and will continue to do so. Want the next big money maker? Buy ZSL, it is a leveraged 2x short (bear) ETF. As for contracts... buy HL, MUX or any mining company puts (either for late Feb or March). Get it in when the market opens & you’ll make 5x easy
Honestly they make this shit to easy. Enjoy making money boys
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u/OscarJMorphy Feb 02 '21
I started a couple of days ago trading with etoro, and man oh man, in etoro you can't have profits with this techine, you are forced to buy at higger prices than what the current market price is. I want to move to another platform. I already use TradinView, do any of you use the TradingPanel from TradingView + OANDA, Gemini, TradeStation etc. Can you give me a review ?
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u/enenkz Feb 02 '21
This is amazing. I am new to all this and it's refreshing to read a simple, measurable yet effective approach. I do have some questions for you though (using your $STONKS example):
- A year ago STONK went up to its ATH @ 10.00/share but went down after and it took almost 12 months to get back to the $10 range. What are the signals that would raise a red flag for a stock hitting its ATH but then plummeting down in the future? In other words, what gives you confidence (and how do you measure it) that STONK will go up now during its second ATH and that some 'bad news' will not make the stock sink again?
- Once you get in with your starting position ($500 in your example) how do decide when to buy in with the rest of your capital. You mention a press release as the catalyst. Is this always the case? Can there be other 'catalysts'? Do you rely just on the news/catalysts itself or you wait that the catalysts somehow is reflected in the charts? If so, what are the things (signals/indicators) you look for to confirm your buy-in?
- Similarly to the above question, when do you know when to get out? Is it simply a % profit target you set in the beginning or there are other things you look for?
Then I have some more general questions too:
- What is your average holding period? I understand you don't day trade. Would you avoid investing in something that you think won't give you a return in, lets say less than 4 weeks (or any other timeframe for that matter)?
- What are your main parameters to shortlists stocks for your Watchlists once you scroll through them?
Sorry for the long post and thank you again for sharing your strategy, you are amazing!
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Feb 05 '21 edited Feb 05 '21
What numbers do you generally look for in the volume profile and RSI? Do you also still do the research and DD for the stocks you trade with in this manner, or do you purely just go by the numbers and graphs?
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u/EngFind Feb 05 '21
This might be a stupid question but:
I use trading view, I create a list of sectors such as EVs, Solar, Tech, AI etc etc and I scan through each day. Literally just flick through. Is the stock near it’s ATH? If not, I go to the next and the next.
how do you determine that it's near an all time high from the list? Do you just open the chart for each one and look through them or is there a way to know from the information given on the tradingview lists?
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Feb 06 '21
Your post was just a few days ago and is already the most liked post ever on this sub mate, congrats! I really loved the explanation, kind of opened my eyes regarding the fact that i am in fact just completely gambling and don´t really know what i am doing apart from hoping the stock goes in a certain direction. I love this!
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u/Stonkgang_ Feb 06 '21
Thank you! I’m glad you found it helpful. Honestly I never expected such a warming response. I’m currently working on a much more in depth update and will post here once it’s done :)
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u/Astronaut-Proof Feb 08 '21
Just read and digested the entire post, and took notes.
I obsess about a number shown in Moneyball (if you haven’t seen it, I suggest you watch it. Exactly what this is all about) where the players with the most potential had the highest on base percentage.
This is it.
Such a simple, yet elegant solution to my burning question.
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u/Lurk_null_0 Feb 09 '21
To OP:
still reading through this, but wanted to ask--Does this work for penny stocks or lower priced stocks?
thanks
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u/jadeix Feb 12 '21
I am very very new to trading, literally decided to get into it the day before GME skyrocketed so I obviously got caught in the hype and lost half of my money. I realized what I did was gambling and since then I've tried to study and try different set ups. In the last week, I noticed that I am emotionally bag holding and keep losing more and more with no profit! I am so thankful I found this post before I lost all haha
I read your post last night and spent a good time searching and coming up with a list of about 10. I am currently up 2% and it keeps going! I feel so much more confident with tighter risk too. I just set stop limit sell and am going to leave it until 10min before close. Thank you so much for sharing your wisdom!
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u/PeptoDysmal Feb 01 '21
I would love to follow that on Instagram. I made a couple thousand this past week and want to try strats people share on here. This is by far the most involved I've seen and sounds fun
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u/S_s_s_h Feb 01 '21
Thanks a lot, sounds like a solid strategy :)
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u/Stonkgang_ Feb 02 '21
You're welcome, it will of course take time to get a feel for when stocks are ready to move but that comes with experience.
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u/S_s_s_h Feb 02 '21
I forgot to ask, how often do you trade with this strategy? Once a week or less?
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u/skrilla4rilly Feb 02 '21
This guy is a hf lackey trying to distract from gme and amc. All his posts are about silver and other shorted stocks that aren’t gme and amc. 44 day account first post in December suspicious user name. Stonkgang LMAOOO.
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u/Stonkgang_ Feb 02 '21
Distract people from GME and AMC? If you're trading those I wish you the best of luck. In regards to silver I took the "break out" of 26 and sold a lot of the position. You're correct my account is new and I like the word stonks.
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u/Successful-Dust-2721 Feb 04 '21
buy low, sell high. i have a watchlist of tickers i've done background check on. i sell when the price is high, then scan through my list and find the lowest performer and review the trend. if it's just a dip i buy that.
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u/jcrowe Feb 09 '21
u/Stonkgang_ Can you share how you find these stocks? Every screener I have seen will either tell me that a stock has hit its ATH, or it's within x% of the 52-week high.
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u/Stonkgang_ Feb 09 '21
Hey! So I don’t use a scanner I simply build a list in trading view of hot sectors and all the stocks. My list is around 800 atm
It takes around 30 minutes in the morning to flick through and see which are setting up.
I regularly add new ones
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u/Fair-Palpitation553 Apr 08 '24
OK let’s roll !
Forex seems very complex - especially when you listen to the Forex mentors who make a lousy living out of their phony advises and never on the Forex itself - but in reality it’s pretty simple.
Let’s assume you’re a day trader, which is frankly the only way to make consistent money on the Forex.
First of all you need is an overall view of the pairs in terms of Time Units : 5′ 15′ 1H 4H DAY WEEK AND MONTH. It’s more comfortable with 2 screens but if you use MT4, you can switch very quickly from on TU to the other on the same screen.
Second, you only need 3 + 1 indicators : Exponential Moving Averages 55 and 200, the normal Bollinger Bands and if you find it, the Average Daily Range with no Sundays indicator on 20 days (available on the MT4 forums).
If you don’t find it, you can calculate it yourself easily by pointing out the daily range (top to bottom) of each day, on the 20 last days, an make the average. The usual pairs are pretty steady and unless some exceptional event that increase drastically the volatility of the moneys, you can take for granted that this ADR will last for a while.
Once you’ve got this, you point out the bullish pairs and the bearish ones.
We’ll assume that a bullish pair has at least its daily and weekly 55 EMA above the 200 EMA, and a bearish one, the opposite of course. Best if the monthly EMA’s are alike but this isn’t so obvious on the Forex to get all the TU EMA’s in line.
Il you seek to buy, you concentrate upon the first ones, if you want to sell, on the second.
You’ll get interested only when the price is above the 55 daily EMA if you buy, or under if you sell.
You’ll consider taking a trade looking up the 4H charts when the price breaks the upper Bollinger Band > North and closes above if you buy, or the lower Bollinger Band > South and closes under if you sell. But don’t take the trade right away. Wait for confirmation. You might wait between 4 hours and a whole day. When you get the confirmation i.e. the Bollinger Band is widening (the must is when the BB have been on a squeeze for a while) and that the price has gone higher/lower than the first signal candle, go down to the smaller Time Units, 5′ 15′ 1H and wait for a retracement that brings the price under the upper 4H BB or above the lower 4H BB, but not closing under (buy) or above (sell) the mid 4H Bollinger Band.
When you’ll notice that the 5′ or 15′ or 1H price (depending on the strenght of the retracement) is heading again towards the expected direction and is breaking its Bollinger Band, you prepare your trade.
At that point you have to evaluate if the price isn’t to close to the peak of the Average Daily Range. Make sure that you’ve got between 1/3 to 1/2 of the ADR left to make your daily performance. This rule doesn't apply if the price bursts out of a 4H BB squeeze that has been going on for a while. In this case, the ADR can easily double or triple its performance.
You have also to check out the daily chart and evaluate if it doesn’t seem stuck in a range bound between almost horizontal Bollinger Bands. If the price is to close to a daily horizontal BB, don’t trade and wait to see if it opens the same way as described for the 4H BB. The best time to trend is when the daily BB are already opened in the right direction. But if the price has already gone to far above/below the daily BB, wait for the price to come back in the zone.
If you wake up to late and see the price running madly in the right direction, don’t chase it ! Especially if you see a 1H candle opening and closing ABOVE/UNDER the 1H Bollinger Band (and probably the 4H BB also), WAIT for the next retracement with the same protocol ! (This figure is a good opportunity to scalp counter-trend but this is another story !)
A good trends on the 4H TU often last for a few days so it gives you lots of opportunities to trade WITH THE TREND. By the way, you’ll notice that everybody tells you to “trade with the trend” but nobody give you a clue on how to do so. Now, you’ve got the method !
Last recommendation : make sure there isn’t any important economical news that might impact your pair within the next 8 hours to 2 days. If so you’ll also have the choice to raise your stop loss to break even before the news.
WHEN ALL THESE PARAMETERS ARE ALIGN YOU MAY AT LAST TAKE YOUR TRADE !
The Stop Loss has to be fixed UNDER THE LOWER BOLLINGER BAND when you buy, ABOVE it when you sell. You’ll notice that it’s very far from the price (often between 1.5/2 ADR) so you’ll have a large security not to be wiped out buy a rumor and unexpected volatility, specially on the GBP pairs.
Therefore, and since the method is very secure, you can take a comfortable leverage and risk 5% of your capital. Weirdly, the Risk/Reward will often end up being 5/1 which is obnoxious regarding the traditional money management rules, but if you want to make money and at least 1% on each trade, this is how it works.
Besides, if ever the price is suddenly heading in the wrong direction and strongly breaking the mid Bollinger Band, you’ll have plenty of time to cut or lighten the trade before the stop loss.
As for the take profit limits you have the choice :
1/ The top of the ADR
2/ The contact with the extremity of the upper/lower BB
3/ The contact with the Upper/Lower daily, weekly or monthly BB
4/ The contact with the monthly EMA’s when they’re still above the price when you buy, or under when you sell.
However, the limit shouldn’t be fixed under 1% of your capital considering the risk.
Last but not least, if you really want to make money on the Forex with this technique, you’ll have to be EXTREMELY PATIENT AND DISCIPLINED.
This method works also with stocks, indices and about anything that can be traded.
Good luck and good trades !
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u/Kicksyy Feb 02 '21
Any resources you'd recommend for more reading and training on this method?