Slow Trader

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  • Progressing as a profitable day trader requires an honest, easily referable trade record.

    A detailed record of each trade, in some form or another, is vitally important in trading, particularly in day trading.

    That may include a written journal or a video recording. Whichever works best for us. But I think it has to be detailed, brutally honest and easily referable.

    It is important to be able to match a relative chart to a written description too. One picture and a thousand words and all that!

    Not only that, but extrapolating necessary data to provide trends is vital. For example, knowing that most winners come from trades with breaking news, or within a certain stock price range, or with a certain setup would be well worth knowing.

    Previously, I have used a data software known as Tradervue. It is excellent and well supported. However, I’m now looking for very specific historical data comparisons which I can only achieve with a purpose-built system. Fortunately, I know someone who can do that for me.

    I would also like to match a 10-second timeframe chart with my trade; current paid software will only support as low as a one-minute timeframe.

    Also, I like a handwritten (unusual these days, I know) record of my trade rather than a typed one. I prefer written over a video simply for the ability to rapidly review the trade lessons, a video review being ponderously slower.

    For anyone interested, I have attached below a (typed!) record of the trades I took over part of last month as I reported them, warts and all. I don’t use a template at the moment; however, each trade will start with a sector and record of the stock’s float and session volume at the time of the trade entry.

    All trades are buy-only with a cash account, no leverage.

    I don’t provide the stock’s ticker, as that didn’t transfer over easily and I don’t think it is relevant to the lessons learnt.

    How to detail one’s lessons is very much an individual thing, and mine is always a work in progress. Even over the few trades detailed, I have refined my trading technique.

    The trade descriptions below are most recent to oldest.

    Bioprint. Float 5M, volume 16M. Breaking news.

    Setup: Momentum above the 200SMA; waited for a mini PB below $3 and entered as the price went through the same level again.

    However, price did not hold.

    Held too long. As price went below VWAP, my stop of $2.20 (as I’d failed to exit at a more acceptable level) was the level I couldn’t let price go below, so I sold.

    As soon as I exited, price gradually climbed back to my entry level of $3.

    Overall, the entry was extremely weak, and I had no clear volume (and therefore momentum) showing on the tape.

    AI technology. Float: 1M, volume: 21.3M.

    No breaking news was showing to me at the time.

    Price rose quickly and exceeded VWAP at $3.50.

    High today was $4. My entry would be a break above the $4 level, with a mini PB, entering on the rise.

    I got that with a fill at $4.19.

    Previous day highs provided possible resistance up to $6, and thereafter the 50 SMA at $26.

    However, price stalled at entry with minor PBs and retries.

    I exited at $4.11 for an 8-cent-per-share loss.

    After ten minutes, price went to $4.5 then $5, but without a convincing setup.

    A reasonably managed trade.

    My comment is that I spent too much time observing the chart rather than the tape.

    Medical devices. Float 2.2M, volume 12.9M.

    No breaking news. Chart volume is good.

    At $0.89, the stock is below my usual level. $2-$7 is ideal. (The at-or-below-the-dollar level is usually too volatile, but this stock seemed very steady.)

    The price was above the 50 SMA, and I had a target of the 200 SMA at $1.69. Another resistance was yesterday’s prior high of $1.27.

    The tape stayed favourable throughout the trade, moving through the $1 buffer and pushing up to $1.14, with $1.10 forming a lower-timeframe resistance.

    The tape suggested the $1.10 level would not hold, so I sold, achieving a fill at $1.09.

    Price then moved back to VWAP at $1.01 before gently climbing again to $1.20 and the high of the day.

    (Overall, I took 20 cents per share as a reasonable outcome—the shares were so cheap that I was able to buy more than I would otherwise do with a higher priced stock. However, at or near the $1 level can come with extreme volatility, so it is not a stock I would normally buy).

    Biotech. Float: 1M, volume: 2.3M.

    Setup: No breaking news at the time. Momentum breaks from $2.3 to above $3 in less than 2 minutes.

    A 10-sec PB and a continuation above the VWAP.

    Volume was reasonable. A possible target was $4 and the 50 SMA.

    Got filled at $3.03; however, the price stalled and started to decrease as more support for the offers emerged.

    I took my exit at $2.87. A late exit, influenced by having committed my shares for the day and hoping for a resurgence.

    The exit at $2.84 was in no man’s land with no clear stop. Therefore, not holding $3 would have been a better, less costly outcome.

    After a few minutes, price attacked the $3 level again, then fell back to $2.40 and on much reduced volume.

    Skincare. Float 5.6M, volume 6M. Bought at $1.36

    Minutes-old news of a merger.

    Setup: Mini PB to just below VWAP. Entered on a break above the mini pullback trendline and as price touched VWAP.

    Potential target was the 50 SMA at $1.82. However, as the price progressed, it climbed to $1.42 on the Offer within about a minute, then hesitated.

    My new considered exit was $1.50, slightly above the recent high.

    However, over a few seconds, it became reasonably obvious that the price would pull back from the $1.42 level, with a high number on the offer side relative to the Bid.

    I immediately sold and got filled at $1.41 for a 5-cent-per-share gain.

    Correct decision, as the price pulled back to $1.25. The price then rose to $1.50 as expected, then sold off.

    Overall, very happy with the decisions surrounding this trade. The only ignored part of this trade was the volume before I entered; on each of my timeframes, it indicated higher negative volume (red rather than green volume bars), which proved accurate in what subsequently happened.

    Technology security. Float: 1.1M, volume: 3.3M. Relevant 2-minute-old news.

    After a fast climb to $3.5, the stock had a sharp pullback to $3.00. A positive showing, then, at VWAP around $3.20.

    I took the trade and got filled at $3.20.

    A rapid increase in share price to $4. I sold and got filled at $3.78 as the price was fluctuating quite quickly.

    More than a 50-cent profit, but my reason for an exit was weak.

    The tape did not have anything unusual on the Offer, and no red was showing on the 10-second chart.

    My exit was not backed up by anything other than some emotion.

    Entry was 10 out of 10. It met all the criteria, with a difficult PA chart when the chart is in auto, with rapidly increasing volume.

    Exit was a 3 out of ten. Three is awarded because the profit was reasonable, but where I gained 50 cents per share, $2.5 was comfortably possible.

    Lessons: If nothing on the Offer and the chart is still good, stay in the trade.

    (Side note: the chart perspective is improved in the 10-sec Heiken Ashi if I stop automatically fitting the data to the screen and set the price scale, sometimes nearly double the current price.)

    AI-driven real estate. Float: 11M; volume: 61M.

    Breaking news, excellent volume and nicely above VWAP.

    No setup other than a break of the high at $1.50. Probably buying at a top.

    Bought at $1.49, with potential to go to $5.

    My mental stop was $1.25 (The low stop is a function of buying high on a push).

    However, I revised the stop to not be below $1.53, which is the low of a small consolidation.

    I sold as the $1.53 level was likely to break. The PB was only $1.50 ($1.48 on the chart), then zoomed higher without me.

    Lesson: I was too quick to lock in a higher stop. The consolidation was too light to justify the decision.

    Selling at $1.90 would have worked, and looking for a reentry after the next PB would have been ideal.

    AI event platform for creators. Recent news. Float 14.5M, volume 17M, climbing rapidly.

    Price is hovering just below the 50 SMA, but above VWAP. Recent history of price spiking through the 200 SMA, currently at $3.86.

    Entry was an unsatisfactory break. A later break was better, and price then achieved the recent high of $2.80 in quick succession.

    Needed a better setup and a willingness to hold through a certain amount of PB. (I won’t hold through a PB. I need a better setup.)

    Medical devices. Float 2.3M, volume 54M.

    Issue with the 200 SMA at $1.74, which it had already hit today.

    However, I thought it would hit it again soon. I was correct; unfortunately, I’d already sold for a small loss.

    I had gone back to the 10-sec chart, and that is what got me out.

    From the 5-minute chart, I probably would not have taken the entry.

    The one-minute chart—maybe.

    Same lesson as yesterday, reinforced. The 10-second chart is excellent in debrief but a hindrance during the actual trade.

    Better to assess the higher timeframes, such as the 5-minute chart and maybe the 0ne minute, but no lower. That gives me time to take in the tape better.

    Medical technology. Float 3M, volume 70M.

    Ownership good. Recent breaking news. (Traded—unusually—after the open).

    Potential was priced at $3.50.

    The setup was a break above $3.00, which it did very quickly, reaching $3.20. Micro PB and an entry on an active signal. (i.e price increasing above the PB high).

    Got filled at $3.21.

    Price stayed in a micro range, then zoomed to $3.44. It started to PB, and I got my sell fill at $3.36.

    After my exit, the price pulled back to $3.06. At which point it created another buy signal at about $3.29, then consolidated in a tight range around $3.50.

    Price gradually pulled back to below VWAP at $3.00.

    Overall, a reasonable trade and a couple of learnt adjustments:

    1. The follow-on trades were clearly visible on the 10-second chart, but the one-minute chart was clear enough and also provided better context.
    2. Keep the highest-timeframe chart at 1 minute.
    3. The ten-second chart distracts from the tape.
    4. The main reference is the 5-minute chart, with the one-minute as a confirmation only.
    5. I found that using the 5-minute as the main focus gets me onto the tape early and forces me to follow the tape reaction better.

    America’s Car-Mart. Float 7.3M, volume 17M.

    Setup was a break of a 10-sec trend line (TL). The TL also showed, although not as well, on the one-minute chart.

    The break was also through $4.50, which, along with whole dollar levels, is a resistance level in itself.

    Bought at $4.42, and the price moved quickly to $4.63. After which, I wasn’t seeing follow-through on the tape, and a PB seemed likely.

    Not wanting to risk going negative, I sold (filled at $4.44).

    After a minute, the price fell below the entry TL and, over the next couple of minutes, continued to £3.25.

    My only reservations about the trade were the company’s purpose, the float size being slightly large relative to volume, and the lack of breaking news.

    Overall, a good entry with a positive exit when it was reasonable to assume the trade was not going to work as desired.

    Biotech. Float 4.6M, volume 9.2M.

    A DIC trade and a loss. (DIC is short for predictive).

    Tried to front run a possible short squeeze.

    Went against PA, and nothing is sure on the tape either.

    These are not suitable trades for me. DIC or front running.

    Entered at $4.59 with a possibility of getting to $6.

    Out at $4.43 and $4.55 should have been my exit.

    Hospitality trust. Float 2.9M, volume 8M.

    Weak ownership but recent news release.

    Entry was a PB above VWAP, with a high number on the Offer (or was it the Bid?).

    Price progresses steadily through $2.30.

    I was too quick to take a sell. Nothing drastic on the tape or the chart. Was using a 5-minute chart, now trying a 2-minute instead.

    Biotech company. Float 16.6M, volume 3M.

    The float is too high, and the volume is relatively low.

    However, after a recent big sell-off and news, it got my interest.

    A change in charts now has me using only the 8-hour, 4-hour, one-hour, and five-minute charts.

    The change forces me to study the tape more closely rather than be distracted by particularly low-time-frame charts.

    It worked in this instance, and also in my watch of recent stocks—definitely more time with the tape.

    I anticipated a sell price of $4 with an entry of $3. Actual entry was $3.12.

    Resistance at a very recent high of $3.50 had me reconsider, and I took the opportunity when it soon presented itself.

    It was correct: a high of £3.70 occurred, but then it pulled back to VWAP and below my entry price.

    Better to take the profit and wait for another entry opportunity if it comes.

    See previous (below) trade for details.

    Second entry.

    Setup: Break of resistance, a prior high from my earlier trade at $1.70.

    Filled at $1.75. The tape showed the break, with a minor PB, and price reestablished upward.

    Of note, a lower fill, say near $1.70, would have been possible, but that would then have been a DIC (preDICtive) trade.

    Again, price stalled, and I sold on a PB to the $1.70 level. Price pushed again to $1.80, then pulled back to below resistance.

    A deeper stop-level would, in this case, have worked okay, as the price continued to see small, uncertain rallies.

    However, I was satisfied with the management.

    That is my second and final attempt at this stock for today.

    Payroll group. Float 1.4M, volume 9.6M. One-minute volume and MACD are good.

    No apparent news, but the price is rising quickly.

    After a VWAP break and a micro PB, I bought.

    Got a slightly high entry at $2.35; the price rapidly went to $2.49 (my exit would have been $2.50).

    A small PB, and I expected a pushback to, and maybe above, $2.5.

    However, as the price pulled back further, I took the sell without hesitating. I got out at $2.41, providing a small profit.

    Overall, a well-executed and managed trade. The PB was last seen at $1.50, which took only a few minutes after my exit.

    Footnote: the 200 SMA was at $2.74 and a recent previous rejection level; hence, my only ambition was to achieve a sell at about or slightly above $2.50. I looked at getting in at $2.30 ($2.35 was the buy, as the price was moving so quickly at the time), with an exit at better than $2.50, providing at least a 20-cent target profit or an 8% to 10% profit on the trade. The 20 cents does not sound like a lot, but convert that to a nearly ten per cent gain in a few seconds, then it’s acceptable.

    Digital holding company. Float 5.4K, volume 32.5M.

    Setup was an extended 10-second PB break.

    Price stalled and then dropped around the $14 level.

    My exit was at $13.65 as I held to see if I could get more.

    Need to work more closely with the tape, particularly when in.

    Overall, however, a reasonably well-executed and managed trade.

    AI drone warfare integration: Float 22M, volume 1.5M.

    The float-to-volume should have been a red flag. I missed it.

    Setup. Too sharp a PB below VWAP and a single non-engulfing 10-second bar back to VWAP; I entered before the close.

    A small profit and an exit due to the tape hesitating. Exit was a good call, but the setup and the float-to-volume were poor to no trade.

    Lesson. Watch out for getting too glued to the 10-sec chart before the entry decision.

    Social media holding company. Float 2.6M, volume 42M.

    Three setups have already been seen since 12 o’clock.

    I took the fourth setup, probably a ‘B’ entry, as below the previous low.

    As such, the price stalled to climb away. Took my exit at a loss, which was correct, even though the price soon zoomed to nearly $5.

    Biotech. Float 1M, volume 1M.

    Share split active.

    The price is rising quickly from $3 to $4.

    I bought it for $4.21. The 10-sec chart then showed a PB to $3.8, followed by a rise to just below $4.5. I looked to exit at $4.5 but only managed $4.30.

    A mini PB (viewed on the ‘tape’ and not the 10-sec chart) would have provided an acceptable setup; however, the result would have been similar.

    Volume dropped, and price weakened.

    Technology. Float 6.6M, volume 2M.

    The float and volume are the wrong way round. However, immediate quarterly results and a rapid push to the 50 SMA.

    As yesterday, I saw a large number of offers on the tape, but it was slow to sell. Two or three seconds later, the price dropped.

    I then—rabbit in the headlights—held a bit too long, hoping for a bounce that was not going to come. I exited a moment later.

    The difficulty was the 50 SMA. I have to question whether, given the 50 SMA, this was a trade for me.

    Medical. Float 6M, volume 1M.

    The float/volume is a red flag.

    Overly influenced by weak news and a rising price. No setup worth noting.

    I saw the high Offer on the tape and didn’t immediately exit.

    Paid the price (actually 10 cents).

    Overall, poor and not what I’ve been doing.

    Manufactures infrared-sensor systems: Float 830K, volume 3M.

    Set up a minor trend break at VWAP.

    No reported news on TV.

    Chart volume and MACD are fine.

    Higher-priced entry due to insufficient funds to enter on touch keys and late on standard order entry.

    Initially, it looked good, but a rapid PB to the VWAP and at the entry trend line would have justified an exit.

    However, I held my breath, and the price zoomed a whole dollar from $9 to $10.

    Because of the rapid PB that briefly put me in the negative, I took a reasonable exit at the half-dollar with a small profit.

    Okay, in hindsight, holding to $10 was better, but the result and trading sense were sound.

    Price rose to $10.5 before gradually falling, with volume declining and the MACD crossing into negative territory, dropping back to $9.

    Diagnostic tests. Float 1M, volume 33M. Chart volume is reducing; MACD is weak but okay.

    Recent high at $8.5; therefore, a possible target.

    Entered at $6.18 with a minor trend break and a PB to VWAP.

    Chart volume was my only concern, but that could build rapidly.

    It started reasonably well, with minor resistance at $6.33.

    However, chart volume stayed low, and the ‘tape’ was light.

    My exit (recent lesson) would have been a negative break of the minor entry trend.

    It got close but rebounded long back to the entry price. Chart volume remained weak, so I sold at BE.

    A weak entry due to chart volume; however, the trade plan was sound and resulted in an acceptable result.

    (Of note, price continued its slow descent but did not fall below the entry trend line. At market open, the price moved to nearly $7 when last observed).

    Early-stage cancer therapy. Float 16M, volume 32M. No news. Entry was $2.81 with an exit at $2.61.

    Chart volume is low; MACD is early green and has crossed.

    No adequate setup other than price rising.

    After entry went positive for a brief moment, before a PB and below what should have been my exit.

    Holding too long because I only had the one trade available to me. (Not a recipe for successful, consistent trading).

    However, the price at $2.31 reversed, broke a minor trend at $2.6, and showed tentative positivity.

    Lesson. Wait for a setup!

    Construction, float 740K, volume 13.5M.

    Missed the first buy signal at $9. Left the next at just over $11 due to the high price for me and how far above VWAP it was.

    The next signal came at the break of a minor trend line at $10.50. Looking for a 50-cent gain.

    Got the entry at the exact price and held for a few minutes while it hesitated.

    Things I’d missed:

    MACD remained unfavourable, and volume was down.

    I had not extended the trend line to provide a better sell signal if the price descended below.

    I just picked a selling price that would result in a 20-cent loss. The exit ended up being 25 cents below.

    Price then quickly went to my imagined exit of over $11.

    Good lessons from this trade. It was a suitable setup, but had negative entry indications.

    Exit lesson. If I ignore the negative indicators for a moment, the exit on a break of the entry setup is better going forward. It can result in the occasional larger loss, but it helps prevent repeated small losses and exit guesses.

    Holding company, Hong Kong; news not evident; float 320K; volume 6M.

    Strong buying from about $3 up to $8 in a few minutes.

    Good opportunity on minor PB to enter during the £3 to £8 climb.

    I held off on entry because the profile, particularly ownership, was heavily weighted toward closely held shares.

    However, a PB from $8 to VWAP at about $6 had a break of a minor trend line and a good entry opportunity, at least for a 50-cent gain.

    I took the entry (in as price went through $6.50, with an actual entry at $6.63) and took the exit without hesitation at $7 (actual exit $7.09).

    Price made $7.50, which matched weak PA on the 10-sec chart. However, it was fleeting, and if I’d held for that, I might not have filled.

    Price immediately rejected and descended to $5.

    Overall, a well-executed and weighted trade amid difficult but lively price movement.

  • The new PDT rules mean more trades

    Lightspeed will implement updated Pattern Day Trading (PDT) rules on 4 June.

    For me, it is not so much the 4x leverage, but the intraday rather than next-day share renewal that makes a significant difference for day traders.

    Lightspeed is offering 4x leverage on accounts with an initial balance of at least $5,000, which they call margin 2. However, not all stocks are suitable for full leverage; suitability depends on their risk and volatility.

    Many low float stocks fall into this category and are often not available with full or even partial leverage.

    The other, and my preferred option with Lightspeed, using the same account size, is called Margin 1. This option does not provide leverage, but like Margin 2, it allows intraday recycling of shares traded, meaning your buying power is immediately restored after closing a trade, so you can use those funds for additional trades on the same day.

    (With OTC accounts, funds are also returned immediately after closing a position. However, OTC accounts are decentralised and don’t offer reliable market depth or Level 2 information.)

    Equities and futures provide usable Level 2, or “tape,” and depth-of-market displays, respectively.

    I have chosen to day trade low float equities, which are generally low-CAP NYSE-listed shares.

    Before 4 June 2026, the significant disadvantage of trading NYSE equities was the next-day settlement, particularly for a lower-funded account.

    These new PDT rules create significant opportunities for profitable traders, as more trades can be made in a session if opportunities arise.

  • Get in, get green, get out.

    My thought process is: get in, get green, get out.

    Get in:

    The first thing I notice is an appropriate stock coming up on my scanner. A scanner is software that searches for stocks based on predefined momentum criteria, such as relative high volume (number of shares traded), price, and price movement (how quickly and strongly the price is changing).

    Within the scanner, I check the float, which is the total number of shares available for public trading, along with the day’s volume (the number of shares traded so far today).

    If these numbers look good, I check the ‘about’ page (company description). Then I check for any recent news catalyst—a major event or announcement that could significantly affect the stock price.

    I then glance at the ownership section, which shows who owns the company’s shares and their stake size, to see how it is distributed among investors.

    If all looks good, I enter the ticker symbol (the stock’s unique identification code) to open the tape. The tape displays Level 2 (real-time order book with bids and asks) and Time & Sales (a list of every actual trade as it happens).

    Volatility—the degree and speed of price movement—can also be measured from time-and-sales data, which records every completed trade, including price (trade value) and size (number of shares per trade).

    Next, I scan the chart for price action, trading volume, RSI oversold signals, and the price’s position relative to the 50- and 200-day simple moving averages. RSI shows momentum by comparing gains and losses. Moving averages indicate the average closing price over 50 or 200 days.

    I then review the chart’s timeframes—specific periods displayed, such as 1-minute, 5-minute and 4-hour views—to learn about recent and historical price movements. I also mark key resistance levels, which are price points where the stock has had trouble moving higher in the past, before proceeding.

    Get green:

    Around 30 seconds in, if it’s an in-play stock (one with high volume and interest) and IWM sentiment is positive, I start looking for a buy setup (a trade entry opportunity).

    Finding a setup, which means identifying a favourable condition to make a trade depending on what’s happening in the market, may be instant, take an hour, or never come.

    A setup is a trade opportunity identified by analysing both the stock chart and the tape. Once buying starts, my focus shifts mainly to reading the tape to gauge the activity and strength of buyers and sellers.

    Get out:

    While the chart often provides a potential sell price by indicating patterns and key levels, my exit decision is ultimately based on reading the tape—watching real-time trades and orders for signals that the stock price may reverse direction.

  • The Russell 2000 (IWM) is a good gauge of market sentiment

    The Russell 2000 (IWM) is a good gauge of market sentiment for small-cap, low-float stocks. Last month’s post noted that the IWM was below its 200-day average; yesterday, it moved to a new high. Quite a recovery.

    During that same period, a few excellent low float stock opportunities emerged in the pre-market.

    I managed to trade some, missed others entirely, and on a few, only caught a small slice of a bigger move.

    At times, I held off buying for too long because the stock’s price was too close to a moving average or a significant prior high, which ultimately didn’t hold.

    Additionally, there were one or two stocks with ownership structures that made me wary—on one occasion, if I had acted, it would have been the trade of the day.

    Every day, I record specific lessons in my trading journal for each trade, such as whether a setup is reactive, my focus, and whether I’m reacting decisively to breakouts and recognising setups that fit my strategy.  

    Looking back over this period, trading was not as easy as the IWM index chart would suggest.

    Nevertheless, I have incurred only a few small losses during this period, and over the last several days, my trades have been 100% winners—not too big a boast, as our account is still too small to take more than one or two trades per day.

    So, I continue to wait for a setup I can fully commit to—an excellent way to trade. Even so, I have occasionally entered trades too late, which I’m now tracking and working to improve.

    Looking ahead, a change to the Pattern Day Trading (PDT) rules will be a positive development for me and for those who have started small and are self-controlled, profitable traders.

    The rule change is now in transition. With the change, as long as an account is above $2,000 (down from the current $25,000), it could qualify for PDT and would not be subject to a fixed capital trading requirement.

    With this adjustment, small accounts can use margin or leverage to make multiple-day trades. Of course, this is great if the trader is profitable, but not so good if they are not.

    Although already approved, this new PDT rule will likely not take effect with brokers until later in the year.

  • All we can do is show up daily and wait for the right trades.

    Why be a reactive day trader in uncertain times? Because I thrive on it.

    This is when experience as a reactive day trader really shines.

    Even though my trades last only minutes, understanding the bigger picture is always beneficial.

    To help keep perspective, I recommend Mohamed A. El-Erian’s free Substack for a regular global overview. Each week, he reviews the broader economy and markets.

    Since I trade low float U.S. stocks, I also track major indices like the S&P and monitor IWM in real time, typically on 4-hour and 15-minute charts. IWM covers about 2,000 small-cap U.S. companies.

    I also consider stock fundamentals, such as float size relative to daily volume. But mismatches aren’t always red flags; market context and news matter for interpreting float and volume.

    Ownership structure is a go/no-go. I prefer mostly private shares. If a large institutional or single-name presence exists, I usually avoid the trade.

    For companies with unclear ownership, I only trade after thorough research.

    A company’s work influences me, but this bias isn’t always reliable—I have favourites like biotech, pharma, and AI.

    Still, I assess most opportunities that hit my scanner.

    I consider a company’s location, though I try not to. If I trade a more exotic name, it’s later in the move, with smaller size and shorter hold.

    I now track my location caution in my Tradervue journal to gauge if it’s justified.

    Market sentiment matters. Recently, the IWM hovered near its 200-day moving average, dipped, and retested. For me, that signals scalp-only trades.

    I act reactively: enter as a stock climbs, exit when momentum weakens—before any pullback.

    The market may be bullish, but it is fickle. Few stocks see persistent buying. All we can do is show up daily and wait for the right trades.

  • The reactive trader

    Not really the trading period I was looking for to progress my twelve-month trading challenge. A couple of weeks after my last post, I didn’t record any trades. I turned up every day, but just watched and waited. Such a cold market. No opportunities for me. Probably opportunities for the larger fund, but even those, I suspect, would have been weak and fleeting.

    Some improvement, however, as we entered March. When I say ‘improvement,’ a few stocks in early March showed strong momentum. VCIG, a consultancy firm, was one. There were also a couple of Biotech and Pharma stocks, which remain my preferred low float opportunities. Other than that, Artificial Intelligence stocks moved occasionally. More recently, energy and defence stocks have moved, albeit irregularly.

    Previously, many stocks would have bounced significantly, but at the moment, I’m happy with a few cents of positive movement. This change in my expectations stems from the extended periods of waiting—weeks in February and days in March before a trade opportunity appears.

    These waiting times can leave me open to mistakes. To mitigate this, recording past trades on the tape (level 2, time and sales) for simulation would be highly beneficial. For example, when a trade popped up recently after days without activity, I entered it manually (rather than using hotkeys or hotbuttons). Still, I didn’t update the inside ask price before hitting the buy button.

    The difference was 30 cents higher than the anticipated price. The stock had a particularly low float and a significantly high relative volume. My limit order was executed immediately. Yes, I did manage to get a 70-cent profit. But with better execution, that profit would have been a whole dollar. Multiplied by the shares traded, it’s easy to calculate the difference.

    I primarily trade with hot keys tied to the ask price. I choose the ask over the bid, unlike most traders, due to my reactive style. I avoid predictive setups whenever I can. Though I sometimes slip, I’m improving at staying reactive.

    Let me explain what I understand as a reactive trade. As Lance Breitstein says, “trade on the right side of the V.” For me, that means whichever timeframe we’re using on a chart, the green bars (long) are winning. This is as opposed to red bars (shorts) winning.

    It is always easy to look at a chart in hindsight and, with total confidence, say, “This is the entry.” This perspective often shapes how most YouTube courses and the like sell their methods—it looks so obvious in hindsight. But, in real time, it is not as clear-cut. That’s why it is so important for each of us to find what works for us.

    Whether we are good with rapid change, whether we can read signals—be it price action, indicators, or both—and which combination suits us best and how proficient we are at reading the tape. Personally, to ensure I’m being reactive rather than falling into the predictive trap, I primarily use the tape. I check the fundamentals that matter to me, and once I have a suitable reaction on the tape, I check the chart for a worthwhile trade setup. This step-by-step approach helps me stay reactive.

    Sometimes a trade entry can follow this simple sequence, especially when the stock is moving so quickly: I glance at the necessary fundamentals, see the tape take off, check the chart for structure, refer back to the tape, and, a moment later, I’ve taken the trade. At this stage, most of my attention is now glued to the tape.

    More often than not, the process is slower. In these cases, I mark resistance levels on the chart and examine all necessary timeframes for clues. Then, I wait for the tape. The danger is during this wait, when we try—consciously or subconsciously—to predict price and chart structure.

    The arrow on the chart above shows an entry. Notice how, for me, the level 2 and time and sales dominate the area rather than the chart itself.

  • Why is trading difficult?

    We make trading difficult for ourselves, often by trying too hard. Trading is an odd skill to learn. It’s not like anything we’ve come across before. It really isn’t “The Wolf of Wall Street” stuff. Proper trading—the skills that mark a competent trader and that can generate lots of money come with extended periods of boredom.

    In cold markets, such as most recently, we can sit for nearly a week without a setup to take. But then, one comes along—it’s not perfect, but maybe good enough—and we have to go with it—trade it, let it move, take profit, and enter again and again if the stock has room to run.

    When suitable trades are not available, and we have the presence of mind to sit on the sidelines, watching and waiting for the best part of a week, it is, I think, quite a mature accomplishment. Something I have not managed previously until this week.

    A justified wait, too. When I reviewed each trading period, I was correct to hold; there had been no trades for me. Yes, some weak opportunities showed themselves, and others might have been available for the bigger account. But for me, looking for low float moves with some catalyst, there was nothing of note. Not just stubbornly waiting for “A” grade trades, but “B” grade or, at a pinch, a “C+”.

    The trade that became available at the end of the week was a “B”. At best, a “B” to my eyes, as the stock price already stood at nearly $9. Blue sky above, no resistance of note once price steadied above $9, all the way to $12.50. I gained a few cents on the trade up to the $9 level. Another setup appeared above $9, and a full-dollar trade was taken as the price eventually reached the $12.50 resistance and pulled back quickly.

    Why was it a “B” trade? At nearly $9, the price was a little high for my small account. Between $2 and $5 is ideal. The float was particularly small. A share float of less than 10 million but more than 1 million is about right—this stock had a float of only 500,000 with a wide bid/offer spread. Yes, volume was high, but liquidity was, as expected, reasonably weak. That made the exit a struggle, even as the price shot up.

    So why do we make trading more difficult than it needs to be? Simply because, when the market goes quiet for an extended period, we try to trade something anyway. Inactivity, boredom, and a general feeling that we ought to do something to justify our time. But, of course, when things do move—and it can happen in moments in the low float world—we have to pounce and not hesitate. A difficult balance to learn.

    We make things too difficult because most of us get those two scenarios the wrong way round. We trade when we should be patient, and on the sidelines, and when something does take off, we freeze or over-analyse.

  • Update on My Trading Setup and Strategy

    As we begin the new year, I wanted to provide you with an update on my trading strategy and the adjustments I’ve made to my trading screen, which I believe will enhance our efforts moving forward.

    Recently, I’ve dedicated time to organising my trading screen to improve my workflow. This organisation enables me to better monitor potential stock opportunities and respond to high-priority trades as they arise. Although I’ve been experimenting with various timeframes, setups, and indicators, the objective is to refine my approach to prioritise ‘A’ list trades.

    The adjustments primarily revolve around the Level 2 and tape information, which remain consistent with my previous setup. I have repositioned my information and context charts to the right of the tape, which seems promising. These charts help identify trends across specific timeframes using a single Exponential Moving Average and a Wilder line, enabling a clearer view of market dynamics.

    On the left side of Level 2, my primary entry chart is now a 1-minute or 2-minute timeframe. Data from my Tradervue results indicate that these timeframes yield higher success rates than shorter periods, such as the 10- or 15-second charts, which is encouraging and aligns with my overall strategy.

    Additionally, I’ve incorporated the Relative Strength Indicator (RSI) with key thresholds at 80 (overbought) and 20 (oversold) to better gauge market conditions. I have found valuable insights from Garrett Drimon of SMB Capital that have reinforced my decision to include this indicator.

    To maintain clarity, I keep my charts simple. The entry chart displays only the Average True Range (ATR) and the Volume Weighted Average Price (VWAP) line, avoiding clutter and making decision-making easier.

    In sum, as a short-term momentum trader, these enhancements to my trading setup will provide greater clarity on entry points and reinforce our trading strategy. The depth of trends shown to the right of Level 2, coupled with indicators to the left, will aid in identifying optimal setups. VWAP with session anchoring I’ve always included; however, the ATR dynamic stop-loss management is a new approach.

  • 1st month of the 12 month challenge.

    I am trading US stocks through the Lightspeed platform. Although there are commissions to pay with Lightspeed, it is a solid platform, and trades execute immediately, unlike many commission-free sites. As a day trader, the immediacy of trade execution is essential.

    October was a relatively slow month. Additionally, I had a project to complete: redesigning an area of the business into a guest gym. However, I still managed to trade for at least half of the month, and took trades on only six of those days.

    In my preferred trading range of $2 to $20 per share, movement, apart from one stock that skyrocketed and I missed, has been light.

    As I build the fund, starting with only $2,500, I must be cautious that fees do not significantly exceed the profits; this requires me to consider my trading style carefully.

    Please note that I am buying and selling actual shares, which differs considerably from leveraged derivative trading. Once I enter a trade, even if I hold it for only a few seconds, the full cash commitment is not available again until the following day, regardless of whether the trade is a win or a loss.

    Selectivity in trades is crucial, but so is commitment. Not all trades are equal. Where able, I try to gradually build my commitment to a trade as its suitability becomes clearer—a much more challenging skill than it seems, which is why most of us tend to make a single entry.

    Additionally, I try not to overstay my welcome in a trade. I focus on exiting when the trade weakens, but I always look for a re-entry if the market conditions suggest it—a challenging balance to keep.

    My results, however, indicate that I tend to exit trades that are likely to maintain momentum too early, which is an area I need to improve.

    To that end, I have recently shifted my focus away from price action trading. As someone who has long advocated for this approach, I found myself prioritising candlestick patterns and price movements over the tape.

    By “tape,” I mean both level 2 data and time and sales information. By eliminating candlestick charts and instead using exponential moving averages, along with a session volume-weighted average price across several timeframes, I could still identify a justifiable entry signal, while entirely focusing on analysing the tape.

    Furthermore, focusing more clearly on the tape has significantly reduced my drawdowns, but it is still early days.

    The profit results from last month are inconsequential, but we are prepared to capitalise on any long-only volatility that may emerge.

    The lower screen shows three Lightspeed level 2 displays and their associated time and sales. The upper screen displays four charts of the same stock over different time frames, absent the usual bar chart.

    Fund at $2,588, a 3.4% increase. It’s a start!

  • Forex trading signal, a high two reversal

    We entered short at the close of bar one which provided a reasonable probability of a measured move. Tuesday 20th February, 9.30 am.

    The close at bar 2 put us in the money and looked right at this stage to reach our target. We only noticed later that the close of bar 2 equalled the support level at 7:30 marked by the red arrow.

    A high 2 was activated (bar 3) closing above the previous three bars. This required an immediate exit of our short for a small loss and a reversal entry long.

    This we did and were rewarded with the big move for the day so far.

    The reversal entry is often hard to do and one that we do reluctantly and only if we are confident of the Forex trading signal.

  • Forex trading and USA holiday

    Good morning Forex day traders, 8 am Monday 19th February 2018.

    Our first trade of the day was missed. From the close of the bear bar at bar 1, an unassuming engulfed bar, I went for my first pot of tea of the day. I missed the second bear bar, bar 2, which provided a probable entry short of 8 pips.

    8 pips are our minimum entry in the GBP/USA currency market.

    The short went 12 pips below our planned exit, down to Friday’s low and to the significant number of 14000. That, of course, means 1.4 dollars to the pound.

    Trades today will in all likelihood be light being a USA holiday. A trading range day is expected, but occasionally on such holidays, a trend can form.

    Our missed entry looks good on paper, but in reality, I would have not made the short. The spread at the time was double, which is typical for a no-news Monday morning. As I don’t pay the entry spread, I always like to achieve a limit entry, the subsequent pullback at the close of bar 2, and at 2 pips spread, would have not worked.

    We wait patiently for the next opportunity.

  • Trade management, a skill

    Trade management is a skill and tricky to achieve, the first thing in the morning! The trade is from 8.15 am 16th February 2018.

    The chart below shows a possible wedge, three pushes down marked by the red arrows. A strong bull-bar, the close of which is characterised by the green box, provided a reasonable probability of an entry-long with a target back up to the previous high.

    We enter (the green box) long. The follow-through, however, is somewhat weak. Until we get the bear bar, the close of which is marked by the red circle. This could have been accepted as a small loss exit position.

    However, we hold. The trade is expected to go back to the low of the day. The risk is a breakout short.

    At the price action long, shown by the green horizontal arrow, we scale-into the trade. Our target is a breakeven on the original bet and a small profit on the scaled-in take.

    To scale-in improves probability but is not for the beginners.

    A screenshot of the trade live.

  • Price action is all well and good, but context counts more

    10.45 am 15th February. After the tight channel long the market went into a narrow trading range for a couple of hours.  The close of bar 3 provided the first opportunity long as the close was slightly above the support line.

    However, we considered that bar 3 was the third push long, an embedded wedge, and therefore not a likely trade. In hindsight, computers saw this as two pushes down with higher highs and higher lows. The market went up after bar 3, without us!

    Our next opportunity was the price action provided by the pin bar marked by the yellow box. The close of the pin is above the support line (and at the 21 EMA) and gave a 60% to 70% chance of a trade long, at least to the top of the previous high and a 15 pip profit; which we are happy to say, it did.

  • Advantage of the scalp over the swing, if we can make the entries

    Good morning Day traders, 15 February 2018. A great start to the day for the early risers. The higher timeframe chart, daily in this case agrees with a possible trend long.  Soon after 7 AM on our 5-minute bars we get a breakout, indicated left to right by the first yellow arrow. We enter here for a scalp long and exit at the lowest red arrow.

    We immediately take another entry near the close of the first exit, from this measurement we also set a pullback entry. We make these entries long for a scalp target shown by the middle red arrow.

    A third entry is achieved, albeit more tentative as we are near the possible top of the push. We trade here with a decreased amount due to our stop being below all the bars shown.

    Again we get the breakout and the pullback entry and take the final scalp at the target shown by the top red arrow.

    Achieving about 70 pips for what was only a 32 pip move overall. That is the advantage of the scalp over the swing, the difficulty is making every entry.

    Yellow arrows are trade entries, red arrows are trade exits.