Using Intra-Day Trading Tactics to Harness the Power of Today’s Volatile Markets
Dr. Thomas K. Car’s books title really surprised me. When the volatility in 2008 got really wild and the Dow Jones Industrial Average was swinging hundreds of points each day along with big cap banks trading like they were penny stocks, I became a day trader. I went from thinking day trading was ridiculous to believing in it. I traded the daily trend of the volatility to make back the $10,000 I had lost in my brokerage account at the beginning of 2008. I had quite a bit of success with this and even started day trading triple leveraged ETFs when they were introduced.
Đang xem: Micro trend trading for daily income pdf
I was doing so well I even thought I would quit my day job and trade full time. I could write a book called “Micro-Trend Trading” I thought, because that’s what I was doing and winning consistently. I took the principles of Trend Trading and Nicolas Darvas and put them on the level of a day’s time frame with much success in the volatile markets of 2008-2009.
So I was shocked when I saw the title of this book. I thought I had made that name up. I was also surprised to see he suggested using some of the same triple leveraged ETFs that I had used. Unfortunately much of the volatility left the market and my systems quit working except sporadically.
However the author proposes eight micro-trend trading systems that he has back tested by hand and also traded that out perform the market.
The bread and butter system: 20/50 SMA, stochastic, & bullish candleThe five-minute trend trade systemThe VIX reversal systemThe lunchtime scalp systemThe afternoon reversal systemMultiday micro trend systems:The overnight trading systemThe Snap back BBand systemThe Turn of the month system
All these systems are interesting in their principles, but I define many of them as micro-counter trend not micro-trend systems. The snap back is buying at the bottom or shorting at the top of a Bollinger band that is like the reverse of a breakout and is not a trend trade in my definition of following a trend.
The Overnight system sounds excellent because you are just following a trend into the morning and taking profits as it hopefully gaps and before it reverses.
The Turn of the month system is historically proven due to capital inflows into the market from mutual fund managers. I had heard about this before from the Stock Traders Almanac, but was the first time I saw a dollar amount of wins attached to it. The systems do have a lot of merit and could even inspire you to tweak them for your own trading philosophy. I like that the author recommends Dave Ramsey to traders to get their finances in order so they are not stretching in their trading to pay for excessive bills or debt. He also uses some of my favorite risk adjusted equities, in the SSO/SDS and BGU/BGZ pair you get 2X and 3X leverage but they have slow steady moving underlying indexes.
Trading them is like the best of both worlds. I really thought the last chapter on examining the dangers of traders becoming like gamblers was really needed in this industry. You have to treat it like a business not like a casino, many people are not built to deal with the losses or equity draw downs and these people should not be trading.
Overall I really liked the book and think it would add value to any trader’s library.
Stephen Burns a trend follower and break out trader that specializes in the Darvas System. To learn more about him and his trading style you can pick up his recent book at Amazon.com