Note; Not all of the Upscale Investors coaches and members use the same trading styles and methods.
Trading Method Q+A
Q: Do you only trade with the trend or do you also counter-trend trade?
Always know the overall trend of the market. If we’re in a strong uptrend on daily time frame, I’m not going to be aggressively shorting intraday. If however, the daily chart has reached a target, then looking for counter trend trades in anticipation of a pullback poses a great opportunity. Trade w/ the larger trend (i.e. If the daily is trending up, 15m is trending up, then trade up.
Q: How do you know when to use the retracement method versus the breakout method?
The answer to this question is determined by what the market state is. Both methods work well in trending or range bound markets, the key is to identify where we are at in the trend or the range. Getting into the trend near the start allows for the most profit to be had, the same can be said in a range bound market, you want to get into the move at the bottom of the range, ride it to the top, exit, and then get in at the top and ride it back down to the bottom of the range (I stay away from trading the middle of range bound markets).
Q: How do you manage trades when there is a news announcement?
I won’t place a new trade within 5-mins of a news announcement. If I’m already in a trade and haven’t taken any profit (or the trade hasn’t gone anywhere yet) I will either close half, or close the entire thing and re-enter after the announcement (this mainly goes for big news announcements like job reports etc.) The other announcement that can make the markets go wacky is the Fed Meeting Announcement on Wednesday afternoons every few months. I typically close out my intraday positions a few hours before the announcement (or don’t even trade on these days). Once the news is announced the markets can go bonkers and it usually takes till the close for things to settle down.
In addition to where to enter and where to exit, as a trader you need to know how you will respond in various situations. How are you going to get out of your losers? How are you going to keep your winners from turning into losers? Never stay in a losing trade because you think it will come back. Cut it, minimize the loss and move on. What is your opportunity cost of being in this position? Are there better opportunities out there?
Please feel free to leave additional questions in the comments