Daytrading AAPL

[Soverus Khan]

AAPL 5 min 8 Jan.png

Step by step of a high probability trade setup with high r/r. For those of you looking to daytrade (intra-day scalps)...follow along.

This is AAPL 5 minute for 8 Jan 08 (today). Stock close 7 Jan at 177.64 (not plotted on chart)

Gapped up to open at 180.14.

A few scalps on the 1 minute chart, but a cautious day for the markets as indecision reigns.

AAPL did not present many early opportunities (for my style and trade parameters).

Stock began rising around noon, but volume was lowering on the price rise. Still a few scalps on the 1 minute. As the markets began turning south around 1420, AAPL began sliding. Still no high probability setup. Good slide, but tricky trade.

As it began to approach the LOD (178.00) , begin looking at the setup on the 1 (there was a couple trades at 180.90 and another at 179.50 on the 1)..... It will either bounce from the LOD or break it. Note the increasing volume on the way down. Strong signal it would break but still a 50/50 risk.

Confirmation: (S&P stumbling on the 5 and 1 as well).

Note the break of 178 and then it moved backed up through 178. Typical action and a great fake out for unfortunate longs. It dipped and then closed below 178....first short entry of a small amount at 177.88.

Next bar screamed downward under heavy selling....2 more short buy-ins on the way down at 177 and 176.50 (market orders filled) and position is now max'd.

Buyers came in after the bottom at around 173. Note the placement of the fib line 0% from the previous swing high. As the buyers drove the price up, all positions exited between 173.60 and 173.90. The action was forecasted by the massive influx of buyers....you could feel the change.

All positions now closed. Next trade setup is the fib bounce.

Note the 38.2. It could not hold it and buying volume on the 5 slowed.

As it opened the next bar at the 23.6 it spiked a bit on the 1 and blew right back down.

Another larger short entry at 175. Larger because the markets were all selling, AAPL volume began increasing and the fib line could not hold.

added final short to max position as it broke the fib base line (173).

Covered all positions 171.80 and 172 (market orders).

Same price action occurs daily on many stocks. This (AAPL) is one I am very comfortable and familiar with.

The only indicators are price bars and volume. Plot a quick fib to get your bearings, but use only as a confirmation and not a "signal".

Charts actively running are 1 minute, 5 minute, 15 minute, and S&P 5 minute. T&S is running and only occasionally level II (too distracting).

Sorry about the chart quality....it's the only chart platform I have that will fit the size limiations of the forum.

As I've posted here and on other forums, if you intend to intra-day trade, pick a high volume stock (I prefer NASDAQ) watch it day in and out and see how it reacts to support and resistance levels. Sit on your hands (literally) if needed and watch. Watch the action and correlation of the S&P or NAZ Comp. Watch a few timeframes.

Hope that helps a fella. Looks and feels easy, but the education can be expensive. Discipline and mental attitude are partners in the quest.

Happy Trading.


Khan (Jackbooted Thug, he, he).

[breakout]

This is a great example of a high probability intraday setup. there's a lot to learn here.

do you do this on NYSE stocks as well? is S&P 5 minute all you watch for overall market direction?

thanks!

[Soverus Khan]

Originally Posted by breakout

This is a great example of a high probability intraday setup. there's a lot to learn here.

do you do this on NYSE stocks as well? is S&P 5 minute all you watch for overall market direction?

thanks!

I don't usually trade NYSE. I watch support and resistance on the S&P. That includes intra-day s/r and and significant s/r line. For example...the head and shoulders neckline a few days back at 1406. That was significant. I plotted the line at that level on the 5 minute chart for an easy visual reference.

[Soverus Khan]

Another massive, multi-short intra-trading day. The tests and failures of support throughout the day provided significant opportunities with large r/r. Fib retraces held up as well. I'll try to free some time to annotate a chart later tonight.

[rookie]

Originally Posted by Soverus Khan

Another massive, multi-short intra-trading day. The tests and failures of support throughout the day provided significant opportunities with large r/r. Fib retraces held up as well. I'll try to free some time to annotate a chart later tonight.

thanks. please do that. I'm learning quite a bit from this AAPL thread as well as aiki's.

[Soverus Khan]

Originally Posted by rookie

thanks. please do that. I'm learning quite a bit from this AAPL thread as well as aiki's.

Rookie, watch aapl on a 1 and 5 today.

I encourage you to plot what you see as support or resistance on the 5 and then explain "why". Also, determine how you would manage money and the trade. Try it and I'll add a critique or valuse to your post.

Not my baby on anything longer than intra-day. Fndy, news, hype, yadayada....

I'm bullish overall, but I use it as a daily income tool.

[rookie]

support and resistance levels were 160-165. it mostly traded in a range between these two numbers. So I would buy at 160 and sell at 165 back and forth. I would set the stop loss below/above those levels, where exactly I don't know as I don't see any other major support/resistance level near those two besides the usual round numbers

[BoneFishGA]

Originally Posted by Soverus Khan

Attachment 100

All positions now closed. Next trade setup is the fib bounce.

Note the 38.2. It could not hold it and buying volume on the 5 slowed.

As it opened the next bar at the 23.6 it spiked a bit on the 1 and blew right back down.

Another larger short entry at 175. Larger because the markets were all selling, AAPL volume began increasing and the fib line could not hold.

Khan (Jackbooted Thug, he, he).

Nice break down Kahn.
I'm with you until the 38.2 and the 23.6 number. I assume it has to do with the fib, which is an indicator I haven't used. I'll have to look into it.
Thanks

[Soverus Khan]

Originally Posted by BoneFishGA

Nice break down Kahn.
I'm with you until the 38.2 and the 23.6 number. I assume it has to do with the fib, which is an indicator I haven't used. I'll have to look into it.
Thanks

Fib retrace should be a part of your platform or trading software. Use the retrace lines from the swing high to the swing low. It takes a bit of feel sometimes. The software should automatically draw the levels.

Caution on Fibs.....I do not trust them enough to use as a trigger for a trade, but they can provide a good visual confirmation and add support to your thought process. Watch price action around those levels until you are comfortable with them.

Pull up todays 1 and 5 on AAPL and check the breaks of support and resistance. Draw a couple fib lines to see how it reacted.

Great volatility means great opportunity!

[Soverus Khan]

Lost the "note to self" to post this last night.

Note AAPL 5 minute chart for 19 Feb 08. Notice how it is almost identical to the set-up I posted in the OP.

An I-phone in every stocking with AAPL trades.

Lather, rinse, repeat.