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DeletedUser397
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When I started this thread, I was still stuck on the thought the 'event mindset'
Even though I stopped posting in this thread, I kept trading and lost another $7,000 over this past year. It's been a little over a year since my last post, and the reason I'm back is because I've finally figured out how to turn a consistent profit in my trades. I only discovered this in the past few months, but it came with a true shift in my mindset. I knew I was 'event-oriented' before, but nothing I read or whatever was able to change that. It only changed when I looked through my past trades and looked for a pattern.
I realized that all the times I made a profit were small gains. I went through these gains and wrote up a list of 'factors' that were in place. I basically narrowed down the most important factor to day trades that were done while closely watching MM movement on L2. So about a few weeks ago, I started compiling a list of observations/patterns in Market Maker movements, and I am still in a state of disbelief as to how clearly I can read the price movements now. I'm trying not to be too over confident in my trades, but the numbers don't lie. Just about 9/10 of my trades are resulting in a profit.
But here is the mindset shift that allowed this to happen - my goal is no longer to make a huge gain on each trade. My strategy is HFT (High Frequency Trading). I go for many trades with the aim of being profitable on each one, no matter how small. So even if I make $20 profit on the trade, it's still profit. I look at that in terms of what I could actually buy with it. $20 is a shirt. The $700 I made today is the cost of a laptop. I don't knock that. Even if I feel like I sold too early for a smaller profit than what could have been, I don't knock that. And each time I make a profit or loss I make specific notes to learn more and build on my strategy.
My New Trading Strategy (Some Specifics)
To be a bit more specific, I don't care what the company does, what their financials look like, or even what their name is. At the end of a business day I look at the Market Movers list for the Nasdaq, and find the highest volume gainers or losers. I look at their after market activity. Then I get up early the next day and look at their premarket activity to try to get an idea for what the big movers of the day will be. I look at L2 very closely and determine the potential price swings based on the market makers that are on the bid/ask. I get in/out within very short time increments. I hold for no more than 20 minutes. I set limit buys/sells. I only go for stocks with very high dollar volume (not just volume). I don't trade after 8am (Pacific Time).
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I've found that if I stick to these rules (and of course the technical strategies that I've set within the watching of L2), I've profited almost every single time. I'm getting so good I almost think I've cracked some secret formula. My goals now are:
- Make back my losses, one day at a time. It doesn't matter if it takes a year to make back the $12k, if I can make it back with consistently profitable trades, I'm making progress
- Perfect my strategy and improve upon it every day
- Try to trade consistently each day (sometimes I wake up late and miss the market)...I have to wake up before 4am to be on target for premarket activity. This is a big factor, because the major swings in premarket happen at 4am, 5am, and 6am give or take 5min. Those each time spans are the deciding factors, and I need to be awake then.
- Eventually would like to create a program that takes my strategy and builds a stock scanner or L2 scanner that can essentially place trades for me based on my principles, because I do think I have a solid formula that can be programmed
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With those goals written, I'd like to restart this thread. I'm going to attach screenshots of my last week of trade executions from Etrade. I'm also going to sign up for profit.ly since they essentially verify your trading profits/losses. I really think I'm onto something here, and would like to share this journey and have somewhere that I can be held accountable for sticking to my goals.
I'll post an update once per week, after the end of about 5 trading days, with screenshots of my trading executions or just a summary of my trades and gains/losses. I'll also use this to keep various notes about my progress.