I had an interesting chat with Anmol Singh, an Indian born trader who spent some time in the UK and is now based in the US.
Anmol is a hard core technical trader, trading stocks and futures with a focus on the morning sessions or swing trading. His simple setups and exit strategies leave us with plenty to ponder about how we may be approaching the markets.
Anmol currently runs LiveTraders.com where he reveals everything in his live trading room along with several other professional traders with specialties in everything from Forex to Options.
In the show Anmol reveals:
- His market open trading strategy
- Why he doesn’t trade Tuesdays
- His simple formula for setting Take Profit and Stop Loss levels
- Why tracking your trades is so important
Your Episode Sponsor:
Behind the Curtain: Trading Secrets Exposed, by Anmol, Jared and Jay
- Anmol’s Trading Strategy Video:
- Anmol day trades on a 1 minute chart from 9:30am (when the US market opens) until about 11:30am because that’s where most of the momentum is.
- Typical reward to risk ratio is 2:1 to 3:1
- He only needs a 40% win rate due to the high reward to risk ratio, but generates 47-60% winning accuracy on average. He’ll get 60-65% on a good month.
- He takes 2-5 day trades per day which last anywhere from 10 seconds to an hour. An average time hold would be 20 minutes.
- He has 2-3, sometime 4 open positions at the same time.
- If he loses 3 trades in a row, he stops trading that day. He recommends this for everyone, i.e. to have a maximum loss limit.
- From 8:30am-9:30am Eastern Time he prepares his watch list looking for stocks that are gaping up or down for the day, or if there is any news out. So, anything that’s active pre-market. He then filters those stocks from a list of about 50 at 9am to 20, and from 9-9:30am EST, he aims to cut those stocks down to a list of 10. Then he determines what his top 4 are.
- Most of his trades are executed about 9:33am
- Everyone should know their statistics, ie. what there average win rate, what time of the day am I good at etc. Eliminate what you aren’t good at or where you lose the most.
- Educate yourself on price action, but not candlestick patterns like Hammer/Engulfing because they don’t work that well, the way the are taught is incorrect and it’s really old knowledge. Instead look for failure patterns, e.g. reversing or going against what people have learnt, e.g. if people see and engulfing bearish candle so they think the stocks going down, but instead of taking a sell trade, wait for another candle to take out the bearish bar so that people who played that candlestick pattern are stopping out, so playing it the opposite way. Here’s an example:
- Educate yourself on Volume Weighted Average Price (VWAP) especially if you’re day trading.
- The opening range breakout is Anmol’s “bread and butter” trade
- Look for a Gap Up that is not into Resistance on a Daily Chart, and the Gap isn’t too big (e.g. a 1% or 2% gap)
- From 9:30-9:40 or 9:45am it’s kind of going in a range, e.g. it opens at $10, goes down to $9.90, comes back to $10 then back down to $9.85, then comes back to $10 and then back to $9.90 – fluctuating in that range
- Then he buys when it makes a new high, e.g. when it breaks $10 he’ll put a buy trade on
- Anmol puts a stop loss on whatever the low of the day has been
- He’ll target 2:1 or 3:1
Here’s what it could look like on the DAX index. Note the Gap Up to start the day, so we’d be looking for Buy opportunities:
Have a question for Anmol?
You can reach him on LiveTraders.com. You can also follow him on twitter, stocktwits, snapchat, periscope and facebook: @DeltaNinety
Or, leave a comment below… I’ll make sure it gets to him.