I used to trade stocks based on technical analysis by studying daily and weekly charts. I never trade intraday before. However, lately stock market is having large swing everyday due to corona virus crisis, it is not wise to keep the money in the market overnight or even over weekends. So recently I try to do intraday trading using technical analysis.
Here are my criteria in stock selection:
1) Listed in S&P 500.
2) Must be high volume for better liquidity
3) Target to profit USD100 per trade. Open and close the trade with 100 shares and hopefully candlestick movement above USD1.00.
4) Stock price above USD20 (the stock price might not move up or down enough if price is too low) and below USD80 (based on my account size).
With the above conditions, I have selected AMD as my first daytrading candidate.
On 1-Apr-2020, I started to monitor candlestick movement of AMD. As I did not know which way stock price going, so I will only enter market after first hour of market openning.
11:22am: Long bearish candle with high volume broke previous sideways support. MA5,10 and 20 also started to show downtrend (MA5 < MA10 < MA20). This should be a good entry point but I was hesitated a bit and missed the opportunity.
11:28am: Another long bearish candle with high volume. Sell to open (STO) at USD46.21. Actually this is not the good entry point as the candle did not break the support at USD46.18. I need to wait until full candle formed before entry. Anyway, I used the high of this candle as resistance. Buy to close (BTO) if price went above resistance.
11:29am to 12:38pm: Price continued to go down. Each time I used the high of large volume long bearish candle as resistance. As price kept going down, I moved down the resistance level.
12:39pm: Hammer candlestick with very large volume. This can be strong reversal signal. Prepared to exit anytime.
12:56pm: Candlestick broke resistance. As I prepared to close the position, the next candle looked like gravestone doji (reversal signal) so I waited for another candle. Price went back below the high of hammer candlestick.
1:02pm: Price action was now uptrend after forming a higher high and a higher low. A long bullish candlestick pushed the price above resistance. Buy to close (BTO) the position at USD44.62.
P/L: USD46.21 - USD44.62 = USD1.59 (159.00 for 100 shares).