When I’m not confident with my own picks, I like to trade the stocks that’s on the buy lists of the pros. I subscribe to theinformedtrader which is a great service by the way, unless you’re a die-hard day trader and like actions day in and day out. Its emphasis is capital preservation and “appropriate” trading. It’s a supplement to my own trading and has been my saving grace over the years.
Anyway, so currently the service is long on CNQ. There are reasons why CNQ was picked and why it’s a long entry. So I can simply leverage on the work done by the pros and day trade with the following bias: buy on dip at support.
That’s what I did today:
By midday, CNQ had established a lower high so I drew a DT (down-trend) line. I then made a parallel line (see the first dashed line) and placed it tangent to the LOD (low of day). When the lower DT line was tested successfully, I made a long entry. As a scalp, I took profit on the first resistance — previous day’s low.
I then drew the second lower DT line at previous day’s low. As this line was tested successfully – with a convincing doji, I made another long entry. Since the overall market was quite negative late day after the morning gap, I keep my line very short. I set my limit to set at the first lower DT line and fortunately it got filled right on before tailing off. I didn’t take a snapshot again, but the day ended at 49.02.
Of course, another trader might trade from the short side after the lower high was made, but this is an art and I’m not ready to fade my masters at theinformedtrader.