Guide to Day Trading Strategies

Five Minute Entries
Since I have more con
À
dence in 
À
ve minute patterns I will typically take larger size on my 
À
rst 
order. With 
À
ve minute chart patterns, I am still buying the apex of the pattern, the breaking 
point of the bull 
Á
ag or the top of the 
Á
at top breakout. In the case of Gap and Go trades, the 
only setups I might use on the 
À
ve minute chart would be the 
À
ve minute ORB, the 
À
rst pullback, 
or a Red to Green move. The majority of my Gap and Go trades start on the one minute chart 
with the 
À
rst entry. Midday momentum trades of strong stocks will typically form patterns on the 
À
ve minute chart. Midday is a risky time to trade off the one minute chart because the volume 
is typically a lot lighter than the 
À
rst hour of trading. Unless there is breaking news or extremely 
heavy volume, I typically use the 
À
ve minute chart for momentum trades past 10 AM. When I 
jump in, I immediately set my stop at the low of the pullback, just below the 9 EMA, or just below 
the ascending support line, depending on the setup.

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H O W T O D A Y T R A D E
93
Pro
À
 t Targets
Momentum trades can be extremely quick. I have been in stocks that surged up 50% in a matter 
of minutes and then came all the way back down and ended the day red. This means whenever 
I am up the amount I was risking on the trade, I will sell half my position. On momentum trades 
that have the ideal set of entry requirements, with a good daily chart and a strong catalyst, I may 
hold the position a little bit longer before scaling out. Alternatively, if I enter a momentum trade 
on a one minute setup with the intention of doubling on the 
À
ve minute con
À
rmation, or on the 
high of day break such as on a bull 
Á
ag, I will adjust my stop to breakeven. When I double up, I 
am no longer at risk of losing money on the trade. Anytime I can get in a trade with a breakeven 
stop, I am in the drivers seat. I have a free opportunity for a big winner.
Estimating pro
À
t targets on momentum trades can be dif
À
cult. With reversal trades, we look 
for a bounce back up to the 9 EMA or the VWAP, but with momentum trades, we have to look 
to the the daily chart or look for technical areas of resistance. We typically 
À
nd resistance 
around half dollars and whole dollars ($10.00, $10.50, $11.00, etc). I try to take pro
À
t if I am 
in a momentum trade and it is approaching a logical resistance point. I then adjust my stop 
to breakeven or adjust my stop into the pro
À
t zone. I always want to keep a partial position 
until I get stopped out, so I can know that I traded the stock properly from start to 
À
nish. It is 
always disappointing to sell for a small pro
À
t and then see a stock run without you. I do not 
turn momentum trades into swing trades, because when a stock is up 20-30% intraday, it is 
usually not a good idea to hold overnight. Sometimes they will continue running, but the risk 
is too high to justify the reward.