July 28th

Very little time to spend in the markets with the day-job being busy. Between appointments, I had a chance to stop at the office and get into the markets for about 15 minutes and took one trade in my live account, a long in SKF. Scalped $25 and scooted out to my next customer.

After completing my regular work day, I started watching the market again about 2:30pm. Then in my paper-trading account, my first trade went quite well, going long near the LOD around 2:35 pm. Indicator of potential reversal was the huge volume spike in the ETF at the 2:30 candle along with the overbought condition of the SPX and QQQQ in the same timeframe. On the five-min chart, I held through the tall 2:40 pm candle and into the 2:45 candle, selling when the 2:45 candle went red (the volume spiked during that 2:40 pm run-up candle). It started to re-trace so I decided I should grab and run with my 15 cent gain. Thereafter it did re-trace to within 4 cents of my entry but never did actually reach it before starting back up on a nice run. It would have been great to stay in but I couldn't pass up taking the winner.

The next two trades were stop outs and basically scratch trades. Both would have given a chance at gains had I stuck with the plan of exiting only on a stop-loss while in the initial candle. The second bail-out trade actually continued another 16 cents. There's a lesson... the problem is, I am still trying to formulate an exit strategy that will ensure long-term success. Call it "Road Under Construction." I should add here that after reading Scott Farnham's most recent post at www.fearand greedtrader.blogspot.com, I moved my QuoteTracker watch-list with its bid/ask quote boxes beside my 5-min chart and moved my 3-min chart out of the way. I was then watching all my stocks including the indices go green and red with the pulse of the market. It was quite fascinating and I felt it may have helped out. Not sure as yet, I have to continue to monitor it. I found myself skipping trades and just watching how the greens, reds, and blacks (stalled areas) behaved at critical points like S&R, and especially at places where changes of direction took place; reversals and pullbacks. An hour of watching it doesn't give me any clear sense of it's value but I am intrigued enough to keep watching. I liked what I saw as it brought some clarity to the movement on the chart. I checked and it appears neither QuoteTracker nor Interactive Brokers has an HOD/LOD list so a true reproduction of what Scott watches is not achievable with my current set-up. I know that ScottTrade has a scrolling HOD/LOD list but does not offer a filtering feature (at least it didn't when I had an account there and was using it last fall). As a side note, this ScottTrade list was a valued trading asset for the moderator and very effective trader at the old GOTS chat room. With Scott Farnham, that makes two successful day-traders who use an HOD/LOD list. I sense a trend... maybe an opportunity to go "long."

In the waning minutes of the session, I took a trade long with the feeling that the market might continue to divert from the mean causing SKF to pop as it reverted to mean (10 day sma). It did although it was sketchy... I held the trade as it touched the stop-out point a couple times before going my way. I sold for a small gain in the last minute of the day as the stock continued to climb beyond my exit. I had gone long at a good spot after the reversal, as it turns out.

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3 for 5 winners, a 60% win rate. Gain of $ 105; $25 in 15 mins of live trading and $80 in 1.5 hours of paper-trading.