Methods I Use

Just to give you a framework of how I trade, I really use only three methods. One of them is a day trading method that I have married into my swing trading. All three methods I learned from other traders that have their own subscription blogs, for that reason I will not get into the specific criteria of their methods. However, the methods below are what I have in my tackle box:

1. Stockbee Trend Intensity - this method was created by Stockbee (stockbee.biz) and is essentially a momentum based swing trading method. I use both breakout and pullback entry techniques when using this method, although the method is breakout-based. It is only used in bullish market conditions as determined by Market Monitor, a breadth based market timing model developed by Stockbee. This method works great in bull markets, including the recent bull market.

2. Earnings EP Pullbacks - This is a PEAD (Post Earnings Announcement Drift) and earnings/catalyst based method...it is based on the Episodic Pivots method from Stockbee. This is really a subset of that method in that it looks for stocks with large up days on their earnings day and a positive surprise, but trades the initial pullback after that price reaction. This method does not enter on the day of the episode but takes the next train. The watchlists I use are from Bluefin (patientfisherman.blogspot.com) that track stocks making big moves on earnings day and stocks with good earnings surprises. I prefer to use this going into and during earnings season periods.

3. The T - This is a day trading method I learned from a guy named "Tumbler" that I met on the Stockbee site. He's the most consistent day trader I know, and has a really straight forward way of doing it. See his site for the best description (www.followtumblertrades.com). I also use this as a method of entering swing trades in the right conditions. I like to take the trade to the next time frame when possible and get bang for the buck. I prefer to use this in volatile times and when other methods are not in play. If I had to pick one method to trade and I had the intraday availability, this is the one I would trade. Otherwise it would be the earnings pullbacks.

So that is the general description of the methods I use. The details are spawn from my experience, my schedule, and my style. The foundations I learned from the sites I mentioned. This site is a way to document my own journey through this market ocean, and to learn some things along the way.

Wheelhouse View of the Market

This is the start of what I hope to be a weekly feature just looking at the weekly state of the market. This week I will look just at the SP500, COMPQ, and the VIX daily charts. Nothing highly technical...

Essentially we have broken down and gotten into a tightening volatile range after the decline. The market truly could go either way here, but without significant evidence to the contrary I have to assume the range will result in continuation of either the range or the decline. It looks like it wants to try the bottoms again before making its move, but expectations don't always materialize.

As far as methods, day trading is the best way right now, but I have been so busy with other work that I have not been able to do much of that since early August. Until breadth improves, this is the way it is.