Running a scan and finding a worthy setup

Night Scan

Finviz.com is what I use for scanning stocks for the next day. Their service is free and you can even create an account to save your scanner filters so you don't have to manually change them every time. I use 6 filters, which you can see in yellow in the pic below. But the two main things I'm looking at are circled in red and those are:

Stocks making a new 52 week-high
-These are of interest because the stocks are hitting the highest price they've hit all year. Meaning that no one who bought this in the past 365 days, and is still holding it, is down money on it. So one of two things will most likely happen here. The stock is guna  keep going higher because new buyers are guna step in and people who already own shares wont have an incentive to sell since they're already in the green. Or there is guna be profit taking causing a sell off and price is guna fade. Simple supply and demand rules. As a trader, I'm not trying to predict exactly which way price is headed. My job is to make a plan for all possible scenarios that could take place and then react to price action.

Stocks with relative volume over 1
-Relative volume over 1 means that they are trading an amount of shares that is at least as much as their average daily volume. These are stocks that are "in play" and that have a more than the usual amount of transactions taking place. The more volume usually means the more volatile a stock will be, giving you better opportunities for a trade.

After running the above scan on Wednesday night 10/28, I came up with a few results. The ticker $NHTC caught my attention the most because of its low float of 7 million shares (meaning a low amount of shares available for trading. Lower float = takes less volume to move its price) and because of its long term resistance at $45, which you can see in the daily chart below.

After liking the daily chart, I pulled up the intraday chart from Wednesday. $45 acted as resistance on this time frame as well, tapping it twice throughout the day, but never breaking through it. Its also important to note that on Wednesday the stock opened at around $38 and even after it ran all the way to $45 and faded off that point a little bit, it still had a pretty strong close at around $44 right at the VWAP. So knowing that it still had strength after  bouncing off that key level of resistance twice made me think that maybe there isn't going be a sell off and that the stock could def go higher. So I went into the next day a little bullish biased. but still prepared to short the stock off $45 if it happens to be that it cant break through it.

Below is the 5 minute intraday chart for the whole week. After scouting this stock on wednesday night, it setup perfectly on thursday morning. Right at the open you can see the stock is showing strength and blows past that $45 key level of resistance on the first few candles. Once it consolidates for a few minutes and $45 turned into support, it gave me a great low-risk entry opportunity. 

And then finally below is the daily chart after it made the move I was looking for. $NHTC was a perfect example of a clean setup right off the scan. These kind of plays have been the only ones I really feel comfortable trading since all the August/September volatility that happened, so its important I write about them to fully understand how they develop and hopefully become more discipline to sticking strictly to them. 

8/17-8/21 Week Recap

Monday 8/17: Once $AVEO failed to hold premarket levels above 2.50 I started eyeing it for a short. A perfect entry would have been in the 2.40s-2.50s with a stop in the .60s, but I hesitated and got filled at 2.38. Covered all at 2.10 and then another attempt once it made a new LOD, which got stopped  out right away. I should have exited in partials and just let 1/2 run with a stop at breakeven. 

Tuesday 8/18: When $SUNE was showing weakness around $15 I got in short at 14.93 with a hard stop at 15.05. It popped up and stopped me out by a cent which pissed me off, but thats the price you gota pay for setting hard stops. Once I get more robotic and able to cut losses on my own Ill stop using them, but for now, I have let way too many losses get bigger than they should have been. I got short right back in at 14.95 once 15.06 confirmed as resistance. Covered all shares at 14.75. After the washout around 10:45am it bounce up and now 14.50s were acting as resistance, once again trying to use whole and half dollar marks as guides. Shorted 200 shrs at 14.48 and then added 200 more shrs at 14.44. I covered in partials here at 14.19 and 14.12.

 

$OMER was just a pissed poor executed trade. I was looking for the break over the HOD, which ended up coming an hr later. This stock had a wide range so it blew past my .20 cent stop I usually use. I didnt even have time to set the order, and then I accidentally added instead of selling and ended up with 400 shrs that I got rid of quickly in a panic. Should have only thrown 100 shrs at a stock thats moving around so much and should have been looking to buy near support in the 23.30s. I need to work on my longs. I've def feel more comfortable and have more success shorting. 

Wednesday 8/19: $CRBP was a big gapper that just went straight down after the morning move. Once it crossed the VWAP I got in short with 400 shrs at 3.35. I accidentally double clicked the button and sent two orders so I got filled 800 shrs short at 3.35. Covered half at 3.19 and then had too tight of a stop on the rest and got out at 3.20.

Thursday 8/20: $CLTX. My first entry on this was a result of having no patience. I should have waited for the pop towards 3.20s and used 3.40 as a stop. My second entry wasn't bad, but for some reason I put in a stop order only .05 cents behind my entry which caused me to be stopped out almost immediately. Finally got it right on the third try and got .75 cents /share profit. I was patient and waited for a exit signal which came around 1pm with a big volume spike and lots of buyers around that level so I covered 300 shrs at 2.20. By 2pm the stock was already reversing (not on the chart) and by 3pm it was already above 3.50 and headed towards 4 so turns out I nailed the exit on this one. 

Friday 8/21: I'm embarrassed even putting this up. With the markets tanking and having the worst day in 4 years I should have known to just take off. I only had one profitable trade out of five and I think they were all horrible. The stock wasnt even down trending, notice how the first low at 4.16 was never broken, and even after 11am it stayed above that level so I should have stayed away. I need to stick to what I'm familiar with and quit wasting time, money, and effort trying to force trades.   

8/7/15

I have the greatest luck. My first day of vacation with the family back home in Destin and we get one of these "easy layups" I've been waiting for. These are the kind of plays that build small accounts (or destroy them if caught on the wrong side). But of course I didnt have my computer and couldnt get in on any of the action. I checked stockmarketwatch.com on my phone this morning just to see what the gappers looked like and sure enough $AQXP was the first ticker on there. By 10:30am the stock was already up over 100% and by 12pm it was up over 500%!!! It opened at $2.45 and hit a high of $11.68. Crazy move. Like I've mentioned before in previous posts, if the stock is still trending up by 11am, then theres a good chance it will continue. In this case, it continued for another 400%. This is what a low float stock, combined with a news catalyst, combined with a short squeeze can do. I'm pissed as hell I missed this, but all I can do now is enjoy my vacay with the family and get back to the grind once I go back home. 

(pardon the shitty intraday chart lol but no access to my DAS platform)

8/4/15

$LXRX was up on news yesterday and the stock seemed very strong all day. Today not so much. When the morning move failed to break above yesterday highs of 13.80s I started eyeing it for a short. The plan was to wait for the EMA to cross down over the VWAP and look for lower highs. 13.35 was a key point of interest because it was support for the morning move, so I knew that if that couldn't hold then there was potential for bigger down move. Once it broke below it I entered a small position of 250 shares at 13.30 and set a hard stop at 13.40. I covered at 13.07 for a .23 profit. I should have covered half and let the rest run, but like I said I had a small position so I didnt want to waste commission. Either way I need to focus on trading well and not on profits. When I look at my PnL I tend to get a little anxious and usually get out of my position too early for fear of having it turn against me.

Some important things I need to keep in mind moving foward:

 -Pay attention to where stock is trading at 10-11am, this is usually a good indication of which direction it will continue the rest of the day.
-Pay attention to where the VWAP is at. Be more long biased if trading above/more short biased if trading below.
-Setting hard stops and moving them up as I scale out.
-Pay attention to whether its "day 1" of the move or not, and dont short if it is.

7/23/15

$ITEK is a perfect example of what I blogged about yesterday. This stock had a HUGE move today after the 9EMA(blue line) crosssed over the VWAP(red line). So far, its up pretty much 100% since the crossover. I'm still not back to trading, but if I had been at my desk this morning I would have considered a long position over the premarket high of 8.84 and seeing the EMA and VWAP crossover would have been a good confirmation of the move. 

7/22/15

Recently I've been adding the 9-day EMA (exponential moving average) study to my charts, which is the blue line, and using it in combination with the VWAP (volume weighted average price), which is the red line. I've noticed that in a lot of charts there is usually a strong move up after the 9EMA crosses over the VWAP. However, this does not mean that I should rely on a single indicator to determine an entry. I will use this along with other technical info in conjunction to give me the best chance at a successful trade. 

This stock $EXEL had lighter volume today, I was actually first watching it to short near 6, but one of the rules I try to follow is dont short a stock thats still grinding up above VWAP after 11 am and this is a good example of why. I was too short biased and failed to see the opp for a long position here, first when it dipped near 5.85 and then when it based around 6 again. 

    

6/17/15

Should have had a $200+ day today, but I made some rookie mistakes. I started out trying to short $SGYP and I was too early. I should of been more patient with it and let it break the 6.05 low and then make a new lower high from there, which didnt happen. So the setup wasnt there and I should have stayed away completely since Im only trying to focus on short plays for now. 

Had a nice little gain on $AMCN. I kind of chased this, but lucked out and exited with a decent profit.

$JUNO should have been the only ticker I played. Its "lockup" period ended today which means company insiders were no longer restricted from selling their shares so a sell off was expected, but of course I didnt keep an eye on it at the open and missed some good opportunities. It setup nicely with resistance at 54.49, then resistance at 53.03 on the next breakdown, and 52.69 on the last breakdown. I should of been a little more patient with my third round of short shares I had at 53.94 because I got out right before the breakdown of that 53.72 support level and missed the quick washout. The loss from $SGYP really got me in a "play it safe" state of mind so I need to make sure I'm being patient and nailing my first trade of the day because its gunna establish momentum for the rest of the day. 

6/16/15

Nice short day today. Made $170 on $AAVL and left the computer so I wouldnt give any of it back. Once I saw a lower high from that 19.45 level I entered a short position at 19.25 with a stop at 19.36. I covered half at 19 and then the rest at 18.82. Of course by looking at the chart now I just wana kick myself for leaving the computer and missing the short entry on the next pop towards 19.45, it would have been very profitable seeing as how the stock ended up dropping to 17 after that. When I first saw the chart today though I saw how it was down from 40 to 19 in just a couple hours so I didnt think it would go down that much more. Guess I was wrong. Atleast Im not the CEO of this company who ended up losing a little over $24 million today! ouch. 

6/15/15

Frustrating day today. I completely butchered $BLFS. Bought at 2.70 (near top) and instead of getting out quickly in the mid .60s when I saw it wasnt going my way, I held and ended up selling at 2.53 for a bigger loss. I need to use smaller size if Im gunna chase and have a tight stop. Then I made another dumb mistake. I shorted at 2.46 which was near the bottom and then covered at 2.60, which was near the top. I did the complete opposite of what Im supposed to do. This was a revenge short trying to make some of the $$$ back that I lost trying to long it and I realize now that I had no business shorting it there.

$AMCN I actually did pretty decent on this ticker. Sucks I only got 50 shares filled on my first short or I would of had a nice gain on that one. My next short was at 6.16 when I saw lower highs from that 6.28 level. This was a great entry I just need to work on my exits a little bit. After I sold half at 6.07 I should have let the rest run until the 5.80s, but I was already frustrated from the $BLFS trade and I wanted to lock in profits. The next short at 5.92 was a decent attempt. I covered at 6.02 for a .10 cent loss. My last short was at 6.17 once I saw it wasnt breaking over that 6.28 level. Covered at 6.06.

6/11/15

Maybe I'm trying too hard not to over trade, because lately I've only been focusing on one ticker a day. Today it was $CJJD. There were some news in the morning and the stock spiked up to 4.67 then began making its way down. I was about to short it at around the 4.20 level, but I chickened out and decided to wait until it made a new lower high. I ended up missing the first lower high it made around 4 and so I waited for the next one. I started a short position at 3.90 with 500 shares. Once it dipped to 3.68 I sold 300 shares to lock in some profits. The plan then was to put a stop order at 3.85 and let the rest run until I either got stopped out or was satisfied with my gains. I had to leave for work around 3pm and ended up cashing out around 3.68 this time too. Waste of commission, but Im glad I covered there because it came back up towards the 3.80s a couple mins later, which was probably all the shorts covering before the close. 

6/9/15

Only had one scalp today for a small gain on $AXN. It could have been a decent trade, but I was not patient with it at all. The stock hit a high of 3.75 during after market hours yesterday and today during premarket it made its run to 4 then quickly dropped back down. It ended up opening at 3.35. I shorted at 3.10 once I saw it failed to break above the VWAP. This time I used a hard stop at 3.20 because last week I got caught in some plays (like $VLTC) where I didnt respect my stops and ended up losing .20-.30 cents more than I was supposed to. Anyways, I covered half of my position at 3 to lock in some gains and I originally planned to let the rest run but I got impatient and took the rest off at 2.96. Had I stuck to my plan and let the remaining 500 shares run with a stop at 3.20 I would have been able to catch an extra .30-.40 cent move once support at 2.83 was broken, With the 500 share position I had left it equals out to an extra $150-$200 that I missed out on because I was impatient!

6/8/15

The only ticker I payed attention to today was $CAPR. It gapped up on some news and went from $6 to $7.50 premarket. Right at the bell it shot up and hit a high of 8.30, It tested it twice on the 1 minute chart then slammed back down right under the VWAP. I should have entered a short position at around 7.60ish once it consolidated under the VWAP and failed to break above it. I didnt pull the trigger and missed my entry. The next play on it setup once it based at 6.95. It tested resistance at 7.36-7.41 twice. I had a limit order to short at 7.42 the second time but it only came up to 7.36 and I didnt get filled. I could have quickly changed my order to make sure I was in, but I didnt like a dummy and by the time I realized it wasnt coming back up it had already broke support and I didnt want to chase. I was frustrated now I had missed two entry opportunities. By the time the next play setup with support at 6.58 my daughter had already woken up and it was time for dad duties. The stock ended up fading the rest of the day went green to red closing at 5.75. Im pretty upset I missed this, it would have been a very profitable trade. If I would of gotten filled on my 1k shares short at 7.42 and held until the close it would have been +$1600 gain. Should of, would of, could of. I guess theres no crying in trading you just learn your lesson and move on to the next one. I gota remind myself that even though I didnt make a trade here, sometimes its good to watch the price action, and get a feel for the flow of the market. 

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6/3/15

Ended up pretty much flat for the day. I was down some after the first trade on $BLFS and then made it all back on the next two trades. I need to work on being more patient with the first trade of the day and using smaller size which will allow me to get in the rhythm of things first without risking much $$. I also need to take the first small loss when a trade isnt going my way instead of compounding it by trying to average down. 

Trade logs

I figure I should fill up some space on this blog since I just started it so here are some reviews from some trades I've made since I've opened my Suretrader account. I always go over my trades and try to see what I missed or what I should of done better. Since Im still a new trader I need dissect my every move and thought in order to get to where I want to be. Learning from your mistakes is a HUGE part of this game. If your interested in learning technical analysis then take a look at www.stockcharts.com theres a link "Chart School" that is full of free educational content about how to read charts.

The Beginning

 The first time I was introduced to the stock market was in my first college class at Florida State University. We had a contest on who could make the most money using paper trading accounts, which simulate live trading without any actual money being involved, but real live stock prices. It was a class of about 500 students and 1st place would get to skip the final. I decided to give it a shot why not right? Everyone was given  like $10 million buying power and I quickly spread my money into blue chip positions like $NFLX $AAPL $UA $NKE $SBUX and a few others. It was in 2012 and  I remember looking at $NFLX before buying it and seeing how it was up like 60% in 3 months. I figured they wouldn't stop going up now just because I was about to put my fake money into them. I got lucky and by the end of the semester I was up like 30% or so on my $10 million paper trading account. I was ecstatic even though I didn't get 1st place. All I could think about was how I could of just invested all my summer savings, which was around $5k and made 30% return just like I had done with the paper account! I was hooked. I got an account with Scottrade right away and quickly did pretty much the same thing I had done with the paper trading account. I started small with only $2k and distributed it into big name stocks once again. By the end of the month of having my first broker account I was bored with it. I wanted action, I wanted more money, and I wanted it now! I started following a bunch of gurus and got introduced to penny stocks. Then something crazy happened. I was at the right place at the right time. The marijuana sector went bananas. Stocks like $MDBX that went from $25 a share to $99 a share in less than a month were everywhere. $MJNA $HEMP $GRNH $MINE $FITX $CANN. It was definitely a nice, welcoming time to the market for new traders. Any bozo with a little knowledge and will power could of made money. 

Although the market was going crazy and stocks were flying left and right, I was very cautious with my money. Like I mentioned earlier, I began following some gurus/trading coaches on social media and this is probably what saved me and my $$$. @timothysykes and @investorslive would preach about how these stocks should be used as trading vehicles not long term investments and how dangerous it was to have your money tied up in OTC stocks. I started doing a little research and realized most of these companies were losing money! Some werent even in the marijuana sector, but changed their ticker symbol to make it seem like they were...sketchy stuff. and yet the hype of legalization blinded investors who poured cash into these penny stocks. Of course once the hype died down, most, if not all, of these stocks crashed right back down. $MDBX went from trading at $99 a share to currently trading at $0.48 cents a share just to give you an idea of how much money one could of lost by holding on to this long term. After the marijuana craze things cooled down and I realized this is something I could scale and make consistent money in. I just had to put the time and effort into learning this craft. I have made it a point since the beginning of my trading journey to be patient, learn as much as I can trading small size, and to not blow up my account.  When OTCs dried up I started focusing more on Nasdaqs. I also opened an account with a new broker, Suretrader, which is based out of the Bahamas so that would allow me to avoid the PDT rule. Ever since then, I been working to improve many aspects of my trading such as becoming more consistent, discipline, keeping emotions on a tight leash, risk management, and just continuing the never ending learning process of this business. This blog will help me stay on track and hopefully someone else besides me can gain something useful from it.