Guide to Day Trading Strategies

Sector Extremes
There are times when an entire sector is very extended to the upside or the downside. Stocks 
that show up on our reversal scanner will meet the technical requirements for a reversal, but 
may not always be appropriate for trading. During a day when an entire sector is weak, we have 
to be careful taking reversal trades. However, if the overall sector begins to reverse, any of the 
stocks on the reversal scanner can be traded because out of the hundreds of stocks in the sector, 
those stocks met our requirements the best. Often times I will pick several stocks in the same 
sector on the scanner, and try to catch a sector wide reversal across several different stocks. 
Even though the sector is reversing, some stocks will reverse with more strength than others.
Reversal Entry Requirements
1. 3+ Consecutive 
À
ve minute candles
2. Candles are riding the bollinger bands or outside the bollinger bands
3. Stock is at High of Day or Low of Day
4. RSI is above 80 or below 20

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R O S S C A M E R O N
100
5. Float is typically not an issue here, but is worth noting before entering a position
6. Ideally, the 
À
nal candle is one of our preferred reversal candles
7. Ideally, we are bouncing off daily resistance
8. Ideally, the overall market supports our decision
9. I must be able to reasonably achieve a 2:1 pro
À
t loss ratio
10. There must be at least 30 cents to the 9 EMA on the 
À
ve minute chart
Entering a Reversal Trade
When I am preparing to enter a reversal trade, I pull up the Level2 and look at the spreads (the 
distance between the Bid and the Ask), and review the level of volume. If the stock meets all my 
entry requirements, I will take a position and immediately put out either a 20 cent stop or a stop 
at the high or low of day. I typically start a reversal trade with quarter or half size positions. Like 
parabolic trades, I may have the right idea, but the wrong timing. By starting with smaller size I 
can allow a little bit more room for the stock to move before stopping me out at my maximum 
loss. If a stock does break to a new high or new low I will exit, but as long as the price is between 
my entry and the stop, I will hold on.