Monday, June 13, 2011

New rules for day trading and holding stocks in rally

1. Day trade on the stock when stock is on uptrend and you missed the opportunity to buy the stock near its 30 day MA.
2. If you bought the stock at 30 MA, then just hold it till the rally is over, at least some portion of the portfolio should be held without day trading and hold it till the rally is over.
3. The reverse rules apply for shorting. Short stock falling from 30 MA in stage 4 on a rising day. Hold it till the downward rally nears. At least some part should be held without day trading so that one does not miss the opportunity of lost in mistiming the day trading.
4. Remember that when stock moves in uptrend, there are 1 to max 4 days of uptrend and 1-2 day of down trend. And when in down trend, there will be 1-4 day of down then 1-2 day of up. That's how stocks move.
When on the 3 or 4 th  day of any kind of rally down or up and if you are day trading do not hold till the next day. Cash out.

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