Thomas Gith Day Trader

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1 Thomas Gith Day Trader

2 Distinctions A Day Trader opens and closes a trade in the markets during the course of the trading day 3 to 5 Trades per Day No Scalping A Position Trader keeps a trade open overnight up to some days An Investor enters a position for the long term

3 Day Trading Pros and Cons PROS Clear cut / Results are known based on Stopp Loss protection Drawdown only Risk that can not be managed No Overnight Risk Limited Margin Requirements More reliable forecasting regarding price patterns Usually sufficient intraday Market Volatility CON Profit potential is limited Risk of Over Trading Tendency of tight Stop Loss Protection

4 Day Trading Trading Styles Discretionary Trading Evaluation of potential trades based on defined trading plan criteria Case by case decision after criteria are met Fresh assessment of all available information However: Impact of emotional trading Computer based Trading Trades based on technical inputs defined by trader No decision by trader required for trade execution However: Difficult to know all potential situations / events

5 Day Trading Money Management First objective is to protect Account Balance Money at risk 1% to 3% Annount 1% Risk = 1000 DAX Future Long Trade Stopp Loss 20 Points below Entry price 1 Point DAX Future = 25 / 1 Contract 2 Contract Position with 20 Points SL and at Risk Return / Risk Profile Theory: Min 2 3 Reality > 1,5 6 % / Month Rule

6 Day Trading My Approach Discretionary trading 70% - 80 % pure Day Trades (XETRA Trading Hours) 3 to 5 trades per day with the last two trades usually in the afternoon session after US opening Money at Risk 2% For trades with sufficient intraday profits, partial roll-over to post-trading period in Germany depending on product to US close at 22:00 depending on product to next trading day (or longer) to benefit from trend development Mainly Trading of Stocks German Market and some US companies Also: DAX Future or BUND Future

7 Daily Schedule 7:00 8:00 9:00 13:00 14:00 15:30 17:30 20:00 22:00 22:30 Asian Market GERMAN Market Futures Trading Pre-Market Trading Phase Post-Trading US Market US electronic Futures Trading Pre- Market Trading Phase Post- Trading T i m e 10 % 90 % Trade Execution / Risk Management / Money Management News Research - Analysis

8 Daily Schedule End of Asian Trading 7:00 8:00 9:00 14:00 15:30 17:30 20:00 22:00 Asian Market Review of overnight activity during Asian trading session Economic data Company data (particularly special interest industries) Newspapers / TV (Bloomberg, CNBC) Assessing overall market situation Impact US and Asian trading on German / European Market Mid and long term Chart Analysis based on chart patterns Review of daily events Economic Data releases Today WTO Decision US Steel Tarifs US PCE Price Index Sep; Personal Income, Personal Consumtion Quarterly Reporting Political events

9 Daily Schedule Pre-Market Germany 7:00 8:00 9:00 13:00 14:00 15:30 17:30 20:00 22:00 22:30 GERMAN Market Futures Trading Pre-Market Trading Phase Post-Trading Defining watchlist for trading: Stocks with a fundamental catalyst (i.e., ad hoc news, quarterly reporting) Stocks with a gap up/down during pre-market Tradesignal Online Terminal Opening Gap Scanner (Data: Frankfurt Stock Exchange) Stocks with significant volume during pre-market Stocks with significant daily volume Stocks with sufficient daily movement (High/Low) Up-date or set-up of Charts for selected products (i.e., Stocks, Indices, other);

10 Daily Schedule - Trading Phase Germany 7:00 8:00 9:00 13:00 14:00 15:30 17:30 20:00 22:00 22:30 GERMAN Market Futures Trading Pre-Market Trading Phase Post-Trading Assessment of opening phase for stocks Price movements: Opening Gap Scanner (Data: XETRA) Volume and Order Book review 30 Min Range Definition Identification of potential trades based on selected trading criteria, Trade Size based on Money Management and Risk Management Approach Permanent: News Feed Review, Bloomberg / CNBC Breaking News; Company Reports;

11 Daily Schedule US Market 7:00 8:00 9:00 13:00 14:00 15:30 17:30 20:00 22:00 22:30 US Market US electronic Futures Trading Pre- Market Trading Phase Post- Trading Impact Twitter mania (starting around 12:00/12:30) Pre-Market Quarterly Results US Companies Economic Data review Economic Events (e.g., ECB or FED Press Conference) Political News during afternoon Post-Trading Quarterly Results and impact on price

12 Chart Analysis Typs of Price Charts Trend Analysis Analysis of Pattern Line Chart Candlesticks Bar Chart Point & Figure Chart Renko Kagi Trend line Trend Channel Trend Pattern Price Pattern Common Gap Breakaway Gap Exhaustion Gap Reversal Pattern Head&Shoulder Double Top Double Bottom Island Reversasl Continuation Pattern Triangles Symmetrical Ascending Descending Flaggs Rectangle

13 Chart Analysis Big Picture DAX PERFORMANCE-INDEX Täglich 11200,62-106,50-0,94% Left Shoulder Head Right Shoulder XXP 13500, , ,00 Neck Line , , , , , , , , , Apr Jul Okt 2016 Apr Jul Okt 2017 Apr Jul Okt 2018 Apr Jul Okt

14 Allianz: Candlestick Chart ALLIANZ SE NA O.N. Täglich 179,26-3,88-2,12% 200,00 195,00 190,00 185,00 Daily Chart 180,00 175,00 170,00 Apr Mai Jun Jul Aug Sep Okt Nov

15 Allianz Descending Triangle ALLIANZ SE NA O.N. Täglich 179,26-3,88-2,12% 200,00 195,00 190,00 184,38 185, ,00 175,00 170,00 Apr Mai Jun Jul Aug Sep Okt Nov

16 Allianz: Short Position Close below Support Level ALLIANZ SE NA O.N. 30 Minuten 179,26 +0,74 +0,41% 190,00 184,44 185, ,00 175,42 VOL VOL

17 Chart Analysis FDAX Opening GAP Reversal FDAX 12/ Minuten o 11196,00 h 11196,00 l 11196,00 c 11196,00 +6,00 +0,05% Price Volume Profile [38, 23, Ja, 25, 100] Opening GAP (Partial) Short 30 Min Closing < Perv Day High SL = Current Day High Day Trade P-Max Position Trade P-Max 11669, , , , , , , , , , ,

18 Chart Analysis Continental Big Picture (1) CONTINENTAL AG O.N. Monatlich 134,00-15,95-10,64% BBD [20, 2] 201,20 254,99 147, ,00 200,00 150,00 113,02 100,00 50,00 0,

19 Chart Analysis Continental Big Picture (2) CONTINENTAL AG O.N. Täglich 134,20-4,30-3,10% BBD [20, 2] 140,24 152,98 127,49 EMA [200] 186,67 EMA(2) [50] 152, ,00 220,00 210,00 200,00 190,00 180,00 170,00 160,00 145,11 150,00 140,00 130,00 120,00 Apr Mai Jun Jul Aug Sep Okt Nov

20 Continental 30 Min Break Out Trade (1) CONTINENTAL AG O.N. 30 Minuten 134,10-1,30-0,96% 142,00 140,00 137,75 138,00 136,00 134,00 132,00 129, Min Break-Out 130,00 128,

21 Continental 30 Min Break Out Trade (2) CONTINENTAL AG O.N. 5 Minuten 134,10-0,05-0,04% SMA [10] 134,43 SMA(2) [8] 133,88 Target: 137,8 (GAP Close) Potential Profit: 7,80 Potential Loss: 2,10 P/L Ratio = 3,7 OCO -Order: SL = 127,9 Limit = 137,8 137,8 140,00 138,00 136,00 134,00 132,00 Limit Stopp Buy ,9 130,00 Limit Stopp Sell - 127, :35: :45: ,00 MOM [28] -4,80 SMA(3) [28] -1,24 {MOM} MOM 0,00 ADXMA [14] 52,31 ADXMA 50, :00 11:00 12:00 13:00 14:00 15:00 16:00 17: :00 11:00

22 Examples of differend Trading Indicators Trend Following Define the direction of a trend (up, down, sideways Momentum Oscillators Measure the amount that a security s price has changed over a period of time. They oscillate around Zero or 100 Trend Definition Identifying trends and defining the strength of a trend and how sustainable the trend can be Volatility Indicators Used to define the intensity of the fluctuation Moving Average MA Channels MACD (moving average, convergence / divergence) VIDIA Point of Balance Polarized Fractal Efficiency Momentum RSI Stochastik Chaikin Oscillator CMO Projection Oscillator ADX Bands Envelopes DMI RAV RWI Standard Deviation Average True Range Bollinger Bands Chaikins Volatility Dynamic Momentum Index

23 My primary Trading Approach using Trading Indicators Moving Average Channel (i.e., trend following!): 1. MA = 10 Period HIGH Prices 2. MA = 8 Period LOW Prices 5 Minutes Period Buy trigger: After two Closing Prices above 10 Period MA with the opening price of the third period (or close to) Sell trigger: similar to the down side However only if confirmation of the direction with additional indicator: Momentum and MA-Momentum Indicator (i.e., Oscillator) For intraday trading 28 period Momentum Indicator combined with 28 period MA Momentum above MA = confirmation trigger for Buy Momentum below MA = confirmation for Sell trigger

24 NVIDIA Moving Average Channel Long Trade NVIDIA Corporation 5 Minuten 207,8400-0,0500-0,0241% SMA [10] 208, Target -Resistance Sell 50% Targe 2 SMA(2) [8] 207, Sell 50% Targe 1 Target - former Resistance 208, $ 205,0000 Buy $ 198 OCO Order SL 198/Limit 204; 208 SL 2 = Entry ,0000 Stopp Loss :00: :30:00 194,6 195,0000 MOM [28] 3,2100 SMA(3) [28] MOM ADXMA [14] 35,6402 ADXMA ATR [14] 0,6626 ATR 16:30 17:00 17:30 18:00 18:30 19:00 19:30 20:00 20:30 21:00 21:30 26

25 NVIDIA Money Management of Trade Basis: Account Balance 2% Risk assigned to trade = Entry Price 198 $ / SL 194,6 $ Risk = 3,4 $ / 3,4 = 580 Shares Trade Management with OCO Order (50% of Position) SL part at 194,4 Sell Limit at 204 (former Support Level, now Resistance Level) Trade Profit 1,740 (290 x 6) Trade Management second 50% Initial SL 194,4 Second SL = Entry Price (after close first part of position)/oco Order Limit Order 208,77 (next Resistance Level) Trade Profit: 3.123,3 (290 x 10,77)

26 Relevant Readings Andrew Aziz, Ph.D.; Advanced Techniques in Day Trading Perry J. Kaufman; Smarter Trading Perry J. Kaufman; New Trading Systems and Methods (4th Edition) John F. Carter; Mastering the Trade Larry Williams; Long-Term Secrets to Short-Term Trading Steve Nison; Japanese Candlestick Charting Techniques John L. Person; Candlestick and Pivot Point Trading Triggers

Technical Stock Market and Stock Analysis UCLA Extension

Technical Stock Market and Stock Analysis UCLA Extension Date: February 4, 2012 Duration: Instructor: 9:00 AM - 4:00 PM Andrew Lais Investment Executive and General Principal Course Topics and Aim: This