Day Trading Strategy: First 45 Minutes -- with David Moadel
hello and welcome to looking at the markets with david modell first
45 minutes can help you to decide where the direction of the market or a stock
might go so what i'm going to do is tell you a
strategy where you look at the first 45 minutes of price action
and then you gauge from there where things might go and it is not
guaranteed to work this does not work perfectly does not work 100
of the time so make sure you do your own research make your own decisions don't
do something just because somebody in a video said so okay
also make sure that you have a trading or investing plan okay i don't want you
to just start using a strategy without having an overall
plan all right so if you'd like some help putting together
a plan for your trading or investing i do offer coaching
for the coaching my email address is david modell gmail.com let's go over to
tradingview.com for the charts and this is the netflix nflx
netflix stock 15 minute chart each of these candles represents 15
minutes so if you have three of them together that's the first 45 minutes of
the day and let me also say real quickly that i
want you to test this out with virtual or demo
trading do not test this out with real money okay
make sure it works first without using any real money
then if you decide it works for you then only use very small amounts of money
have some sort of stop loss or exit strategy respect your stops
stay safe stay safe at all times all right so
netflix stock let's say we look for the opening of the day okay and
then you don't do anything for the first 15
30 45 minutes these are 15 minutes each so for the first 45 minutes of the
trading day you don't do anything you're just watching
and you're getting ready and you're watching until
after that third 15 minute candle has printed
one two three including the wicks you're not just watching the bodies
you're watching the wicks or shadows as well then you draw your lines you draw
a horizontal line below the lowest wick okay at the bottom of the lowest wick
and that goes a horizontal line okay then you draw another line
and actually i shouldn't even say the lowest wick sometimes it's a body
okay just whatever the lowest point is of the three candles
okay it might be a body might be a wick usually it's going to be a wick of some
sort not always though and then you look for
the highest part which actually in this case the highest point
of these three candles is not this wick it's this body is a little bit higher
than the wick so i'm going to draw a line there
horizontal line there as best as i can might not be perfect
okay but try to make it as good as you can
okay so there you go and then you're going to
wait for a break either above or below
if you want to be a bit more aggressive you just wait for
a wick to peek above or below like there's a tiny i don't know if you can
see there's a little wick peeking above the top here you would get in with a
long position that's a breakout okay if you want to be
a little bit less aggressive then you just wait
for a close you know like the body okay not the wick you wait for the body to
close above or below so i would have gotten in here
if i want to be more aggressive just waiting for the the wick to peek above
it or below it uh if i want to be a little
less aggressive i would have gotten in here
when it closed above or below in this case above
the top line okay then you can get in you can take a long position and ride it
up now this strategy does not tell you where your
profit target is so you want to determine that it does
tell you where a stop loss could be it's up to you but the simplest way is
to make this bottom line the stop loss all right if it reaches at any point uh
touches his bottom line once you got in if it falls down to this line you could
just get out for a relatively small loss it's not a huge loss
uh or shouldn't be well actually it depends because what if the range of the
first three candles is really wide ah then it might be a big loss might you
know you don't want to put your stop loss down too far
either so if there's a huge hue if you're drawing
two lines and they're really far apart from each other and you might want to
make your stop loss tighter than just that bottom line right
so that's not a hard and fast rule where
you just decide oh wherever that bottom line is
once i get in that's my stop loss that might be too
wide of a stop loss you don't want to risk too much as an intraday trader
so you might want to pick another stop-loss strategy but
that is one i suppose you might want to try out with demo trading or
virtual trading don't use real money to try this out once again okay
uh and then you ride it up and wherever your profit target is okay you want to
have some some sort of system for that which i i do teach that
in my coaching all right so that's one example let's erase these
now if it had uh whoops if it if it had broken
below with a wick uh you know after the third candle right
if it broke somewhere below with a wick yeah you could have gone short
okay if you want to be that's aggressive if you want to be a little bit less
aggressive you could have waited until it broke
below that bottom line with the body of the candle now be
careful with short selling because it is uh
it's risky i won't i won't lie to you okay short selling is risky you can
actually lose more money than you have in your
account when you short sell stocks so that's only for advanced traders with
decent sized accounts i would say in most cases
so there are exceptions to everything though okay so that's the beginning of
that day let's go to the next day here we go
we're gonna try it again let's see how this worked out all right
so uh here's the beginning of the day okay first 15 minutes look at that look
at that wick there okay so this is going to be a bigger
range here i could tell already that's the first 15 minutes second 15
minutes third 15 minutes all right so the first 45 minutes are done as soon
as that third candle third 15 minute candle prints you know
as soon as 45 minutes are up in the beginning of the day you
draw your lines there we go draw that top line
at the highest price of those top three candles right
might be a wick might be a body in this case usually going to be a wick
not always though in this case it was a wick and then you draw
another line horizontal line at the lowest
point of those three in this case it's the bottom of this wick gonna draw
right here two parallel horizontal lines there we go
bam right okay you might have to draw them further
out in time than that and also i didn't draw it very straight did i
you hopefully have good artistic skills which i don't always have
okay uh will it break above or below uh be patient be patient be patient you
might have to extend your lines i'm going to do that right now
okay try to make it as horizontal as possible all right
got to be patient you wait you wait 15 minutes 15 minutes 15 minutes
candle candle candle broke below it both the wick and the body
okay and you can take a short position or buy a put option however you go short
be careful though that's risky all right going long is generally less risky
because you have a limited loss as opposed to unlimited losses
potentially for going short but if you did that then you
would have done quite well it went down down down didn't it
okay this does not always work out so well all right not a guaranteed
uh strategy here okay and then if you wanted to put your stop loss
uh over here okay if it goes up to that line you can get out
but again what if the two lines are really far apart
uh then do you really want your stop-loss to be that upper line not
necessarily okay because that's too much of a
of a stop loss right too wide so you may want to use another stop loss
besides that all right but in these two i know this is only two examples
they both worked out well it doesn't always work like that it's just an
interesting strategy to try out okay with not with real money all right
with with virtual trading uh yeah try it see if you like it if you
do try it with small amounts of money then
if you're ready only if you're ready and if you have if you have enough money
in your account to do so okay i'm just you know throwing ideas
at you for your consideration you take it and do
what you will with it all right but again you gotta have a plan all right
i don't want you to just use a strategy like that and nothing else and not have
a plan so you can email me for the coaching david modell
gmail.com for the coaching and i want to thank you
for watching and listening and i will talk to you again
soon
left to please