Rule NO 1. Back yourself up always in every single trade

1. Simple rules

a) For stocks use stop loss or hedge with options, prefer to use stop loss or buy out of money options both are good.

b) for  Options use a straddle at least during the initial big position during consolidation phase of 6 days. Of course invest money when there is a trend. But trends can also be uncertain. Future is always uncertain even in best trends. So back yourself up always.

Implied volatility has a big or singular role in options. Only buy options during consolidation phase of trend when the volatility is low and option price is low.

stop loss does not work in options because by the time you open the computer next day the option is down 50 percent if the underlying is down 10 dollar for example.

So stop loss is stupid in options only way to do it is to hedge it with opposite option at same strike price.

ORS speculative stock

• QUOTE
  • SUMMARY
  • OPTIONS
  • HISTORICAL PRICES
• FUNDAMENTALS
• EARNINGS
• ANALYSIS
• FINANCIALS
• OWNERSHIP

1d 5d 10d 1m 3m 6m YTD 1yr 3yr 5yr 10yr Max	Print chart
It opened with 25 percent plus. Closing now with 5 percent plus. these are kind of dangerous stocks to buy and hold. It crossed the MA at 6.50. Already opened really high compared to previous day close.

1d 5d 10d 1m 3m 6m YTD 1yr 3yr 5yr 10yr Max

Print chart

The previous day the stock had those consolidation phases with each rise. And it was always above the MA. This is important to notice. stocks like these even if one enters one should enter with low number of shares and keep buying upwards at each consolidation phase. If the stock is not moving as hoped then one has to get out when the stock price crosses the MA and taking a small loss.  Rule::: Stocks that open 10-25 percent above previous close are kind of dangerous. One has to be very careful in buying them. As 5 day graph shows it opens very high from previous close  and started sliding down and down. May be they are good for shorting after they cross the MA but not for buying.  I lost some money today on this stock.

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.

Day trading Time rules

1d 5d 10d 1m 3m 6m YTD 1yr 3yr 5yr 10yr Max	Print chart

ARUN27.69-5.00-15.30%

This is example of down stock. 

KNXA32.62+4.63+16.54%

1d 5d 10d 1m 3m 6m YTD 1yr 3yr 5yr 10yr Max	Print chart

1d

5d

10d

1m

3m

6m

YTD

1yr

3yr

5yr

10yr

Max

Print chart

From observation of these graphs some conclusions about day trading stocks that are up or down 5-8 percent at opening half hour. If a stock is going to reach around 14 percent by 9 am pacific time, then it has to move up or down with high volume. 

So the safe way to deal with this situation is to wait till 7.30 am. See if the stock is consolidating on the moving average. 

1. If the stock crosses the Moving average that means the trend is changing. Then one has to get out of the stock

2. For stocks moving down the moving average, NEVER EVER BUY THEM. From these graph it is evident that they do not recover for the rest of the day and one can be locked in a bad position and loss situation. 

3. For stocks moving up the moving average, NEVER EVER SHORT THEM. The graph above shows how when a stock goes up it will not come down for the rest of the day. 

It is only is some rare instances that something unusual can happen but otherwise this is normal behavior. 

Moving averages not shown in these graph from Msn.com but available when graphed on google.

4. The first One and half hours is when the most action happens for these stocks. From 6.30 am pacific time to 8 am. This is a similar pattern for all the graphs.