Special triangle strategy with 21% gain CNAT

So why CNAT? Well, as you can see there was pre-market action which got my attention first. The triangle started to form.  Not every triangle is built the same way.  This one got my attention because the VWAP(pink), 8EMA(blue), and 20EMA(red) is right at the make or break point with low Risk and Reward. What happens if the stock moves above the VWAP?

Red to Green strategy

You will hear the red to green strategy but how do you know where the bottom is?  I will show you how I find the bottom and maybe it will help someone.  On the daily and 5 minute, I usually draw some support and resistance lines. I believe support and resistance is miss understood.  Support and resistance is not a buying point always.  It can be but there is more into it.  So on this stock, I will just use it for places to keep an eye on. Below, is the 5 minute chart.

VWAP is pink, 8 EMA is blue, 20 EMA is orange, and 50 EMA is gray. 

Market Behavior During the Day

Day schedule of the stock market

(Time zone EDT)

Opening Bell-8:30 am to 9:50 am
(Time zone EDT)

When the opening bell rings, this is the most volatile part of the day.  Some traders take profit from holding overnight and others enter base off overnight and/or pre-market news.  There are traders that use this time to take quick profit due to the volatile and volume is commonly to be high at this time. Myself, I used to trade during this time, but the more I learn about myself, I tend to stay away from this time. 

How to use Basic Economic and Finance classes in Trading

In college, I was taught supply and demand, standard deviations, and mean. I would ask my Economic teacher and my Finance teacher on what they invest in.  Most of them would say they do not invest because they tried, and lost money. So, I am sitting here and thinking how are you going to teach this class and test me correctly. School makes everything harder than it is. The clear fact is they do not know how to apply the tools they teach. Let first look at Economics. We learned the supply and demand curve, and we want to have the equilibrium price to be efficient.

Scanning

I get the question asked all the time on how I find momentum stocks.  I feel people’s pain because I remember when I first started to trade I could only find one good idea here and there.  Remember, I am mostly a momentum trader. But, I do have other scanners I use and strategies. For this post, I am trying to help you find momentum stocks.  Let’s think about this.  What is a momentum stock?  A momentum stock has traffic and/or catalyst. 

“A Basic Look into Day Trading”

 When I first got into trading, I thought it was looking through financial statements all day. There are some types of traders that do, but I am mostly a day trader. Day traders mostly look for catalyst and/or momentum and/or stocks that may lose momentum to short, but we rarely go through financials in depth. We do pay attention to the environment of the market for example the VIX, SPY, and sectors etc.  I am going to tell you a secret.  A company can be a great company but if there’s no buyers, is their stock really worth anything?  It is like saying, your house is worth 200k but no one’s willing buy it, is your house really worth 200k? The share price is only worth as much as someone is willing to pay for it, PERIOD.  Therefore, the name of the game is what are people

Welcome to my blog.  I will be posting my life as a day trader the good and bad. I get tired of BS sales traders, and maybe this will help someone. I  will just tell you what I know.  Learning is a key for me.  Lets beat the market together.