8/2/2023 Wednesday: Back to Basics #2
- Most successful traders I've studied are very organized. It starts with watchlists
- Where do you start?
👇👇👇
- Most successful traders I've studied are very organized. It starts with watchlists
- Where do you start?
👇👇👇
Overarching goal 🧠
- EP, mean reversion & Bull flags go hand in hand
- Each mark a stestagep in price cycle of momentum stock
- The point of WL is to track the stocks in stages of cycle (vs collecting many long lists)
- Organised lists are key for mind clarity
- EP, mean reversion & Bull flags go hand in hand
- Each mark a stestagep in price cycle of momentum stock
- The point of WL is to track the stocks in stages of cycle (vs collecting many long lists)
- Organised lists are key for mind clarity
The Price Cycle 🧠
- An EP sparks the move (1st sign of momentum stock)
- MR is the natural pullback after the stock gets extended from an EP (then bounces when it corrects too far)
- The stock bounces back & fourth before supply drys. Everyone rushes to buy at the breakout
- An EP sparks the move (1st sign of momentum stock)
- MR is the natural pullback after the stock gets extended from an EP (then bounces when it corrects too far)
- The stock bounces back & fourth before supply drys. Everyone rushes to buy at the breakout
WL #1 Backwatchlists 🗒️
- Objective is to track these EPs & Breakouts which can lead to MR or more breakouts
- Tactics are less important here (eg, did it hold ORH entry etc)
- Exclude stocks that dont make 15-20% moves or aren't in your tradable universe, these confuse you
- Objective is to track these EPs & Breakouts which can lead to MR or more breakouts
- Tactics are less important here (eg, did it hold ORH entry etc)
- Exclude stocks that dont make 15-20% moves or aren't in your tradable universe, these confuse you
- For 2 weeks, keep failed BOs so you get a feel for:
1. # of BOs
2. followthrough (15-20%? 3-5 day bursts?)
3. Which tactics/setups working (ORH, short base, small cap etc)
- Over time, clear weak stocks so that only strongest leaders remain
- Great idea source for new setups
1. # of BOs
2. followthrough (15-20%? 3-5 day bursts?)
3. Which tactics/setups working (ORH, short base, small cap etc)
- Over time, clear weak stocks so that only strongest leaders remain
- Great idea source for new setups
WL #2 Sector/Theme WL 🗒️
- Best leading indicator for moves is setup prolifteration in sector
- When you see big EP candles in a sector during scans, start making list of tradable stocks
- Best leading indicator for moves is setup prolifteration in sector
- When you see big EP candles in a sector during scans, start making list of tradable stocks
- When hot, check sector WL often for:
1. New setup proliferation
2. Signs of Relative-sterngth/weakness
- When the group starts breaking down, you can delete WL or archive until they show up in scans again
1. New setup proliferation
2. Signs of Relative-sterngth/weakness
- When the group starts breaking down, you can delete WL or archive until they show up in scans again
Me:
- I've deviated from this & started collecting sector watchlists like a psychopath
- Truly, all I need is to have 2 very organised watchlists to do very well
- I've deviated from this & started collecting sector watchlists like a psychopath
- Truly, all I need is to have 2 very organised watchlists to do very well
- Daily process loop should be
1. Archive daily focus list and add any BO/EP to back watchlist
2. Scans and add any BO/EP to back WL, add setups to focus list
3. Review Back watchist and previous focus list for leaders re-setting up
3. Repeat
4. Win
1. Archive daily focus list and add any BO/EP to back watchlist
2. Scans and add any BO/EP to back WL, add setups to focus list
3. Review Back watchist and previous focus list for leaders re-setting up
3. Repeat
4. Win
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