Making Intraday Trading Decisions

Oct 21st, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Share on StockTwits


I am frequently amazed at how many people think intraday trading is all about Reading the Tape.  I am more amazed at meeting too many who believe trading is all about reading some pretty charts.  And I am also surprised at how few intraday traders embrace intraday fundamentals.  Well that is a lot to be surprised about.

When I make a trading decision I do not just Read the Tape.  When deciding to buy or sell I do not just consult my charts.  I never make a trading decisions without considering a stock’s intraday fundamentals.  Let me offer an example of combining all three to make the best trading decision.

WFC reported before the Open.  Our genius, ambitious new traders offered 30.20 as an important technical level.  Noted.  WFC opened and there was a whole bunch of nothingness on the tape at 30.20.  So this is a no trade to me.  It was not above or below the technical level and the tape did not offer an edge.  Pass Bella on long 30.21 or short 30.24. or short 30.19.  Pass, pass, pass.

But then 30.40 held the offer on high volume.  The tape gifted us a level.  Now WFC was above the technical level of 30.20.  Check technicals.  Also, the tape showed resistance at 30.40, so above this level presented tape that was bullish.  Check for Reading the Tape.  And WFC had just reported, it was a Stock In Play so check for our intraday fundamentals.

The trade was buy WFC above 30.40 because technically this was a solid trade, the tape confirmed bullish action, and it was a Stock In Play so could run above 30.40.

Best of luck with your trading! Don’t forget to follow us on Twitter!

WFC Open 10-21-09

Tags: , ,

4 comments
Leave a comment »

  1. Lawyer verbage:
    “But then 30.40 held the offer on high volume. The tape gifted us a level. Now WFC was above the technical level of 30.20. Check technicals. Also, the tape showed resistance at 30.40, so above this level presented tape that was bullish. Check for Reading the Tape. And WFC had just reported, it was a Stock In Play so check for our intraday fundamentals.

    The trade was buy WFC above 30.40 because technically this was a solid trade, the tape confirmed bullish action, and it was a Stock In Play so could run above 30.40.”

    Trader verbage:
    “Bought the pullback”

  2. Lawyer verbage:
    “But then 30.40 held the offer on high volume. The tape gifted us a level. Now WFC was above the technical level of 30.20. Check technicals. Also, the tape showed resistance at 30.40, so above this level presented tape that was bullish. Check for Reading the Tape. And WFC had just reported, it was a Stock In Play so check for our intraday fundamentals.

    The trade was buy WFC above 30.40 because technically this was a solid trade, the tape confirmed bullish action, and it was a Stock In Play so could run above 30.40.”

    Trader verbage:
    “Bought the pullback”

  3. Bravo. Very strong explanation of using your tool set at “areas” of interest vs. being tied in to Pavlovian mechanical reactions when the S/R number is hit on your charts. It’s fluid, it’s money, it’s greed and fear negotiating for an edge at a moment in time.

    Mark

  4. Bravo. Very strong explanation of using your tool set at “areas” of interest vs. being tied in to Pavlovian mechanical reactions when the S/R number is hit on your charts. It’s fluid, it’s money, it’s greed and fear negotiating for an edge at a moment in time.

    Mark