Day Trading

Timing a day trade is very crucial. For the past two weeks I have missed to big drops in the indices and I just cannot get over it. Knowing how fragile the market is right now I came really close to scoring big but due to bad timing in trades I missed out on most of the downward drops. On August 10 I was unable to participate on the short side of the SPX due to going all in on a PCLN short. I made a decent profit and will leave it at that. Just two days ago I went short the NDX via purchase of put spreads but sold them on the same day of purchase because I did not want to lose a four figure profit. Of course if I had held them all to the end of today I would have raked in 7 times the four figure profit I took. Man it almost hurts as much as losing money in a trade.

My touch on the markets' moves are getting better. However I should be very cautious now considering I have been unscaved the past two weeks. I guess preseving capital is much better than winning big in the market. Although if the market is ready for a third drop in the next week I hope I will be in it shorting.

From stocktwits commentors and my own technical analysis the market seems to be ready to fall again. The sentiment on Wall Street seems to be very pessemistic which is why I do not want to just go short the market. Yet if I have to put a number in I would expect the SPX to drop to 1060 before a bounce. I hope tomorrow we have an up day so I can plan on shorting it but if we hit 1060 first I have missed the next big drop. 1050 and 1020 are other support lines but I need to do a little more research before diving in with shorts. Pun intended.

To help myself become a better day trader I have linked a stocktwitter by the name of blackmart. I have been reading through blackmarkt's blog and found his entries on day trading very insightful. He lists all his trades at the end of the day and shows his gains and losses. Furthermore he talks about the periods of trading during the day that I think every type of trader should read. It talks about the 9:30 to 4:00 period of day trading.

http://blackmarkt.blogspot.com/2010/03/daytrading-time-zones.html